FinTech Global FS Regulatory Round-up - w/e 4 April 2025

ICYMI

• European Commission adopts revised DORA Subcontracting RTS – a partial retreat on monitoring sub-contractors?

• Cyber security: A month in retrospect (Australia) - March 2025

---

Global

BIS launches project to enhance financial supervision with AI-powered tools

The Bank for International Settlements (BIS) has announced the launch of Project AISE (Artificial Intelligence Supervisory Enhancer) to develop a flexible AI-driven toolkit designed to support financial supervisors in handling the growing complexity of regulatory oversight.

By leveraging AI, Project AISE aims to equip supervisors with technology that enhances their ability to process vast amounts of data, detect emerging risks, and respond swiftly. Additionally, the toolkit will look to facilitate knowledge transfer by embedding best practices from experienced supervisors, facilitating new supervisors to onboard and build upon institutional expertise. [3 Apr 2025]  #AI

BIS: Research paper – The AI supply chain

The Bank for International Settlements (BIS) has published Paper No. 154 – The AI Supply Chain. In relation to five key layers of the AI supply chain (hardware, cloud infrastructure, training data, foundation models and AI applications), the paper examines the market structure of each layer and highlights the economic forces shaping them. These forces are rapid technological change, high fixed costs, economies of scale, network effects and, in some cases, strategic behaviour by dominant firms. It also highlights the expanding influence of big tech companies across the AI supply chain and discusses the challenges for consumer choice, innovation, operational resilience, cyber security and financial stability.

The views expressed are those of the authors and not necessarily the views of the BIS. [31 Mar 2025]  #AI #Cyber #OpRes

---

UK

PSR consults on remedies to improve card scheme and processing fees

The Payment Systems Regulator (PSR) has published Consultation Paper 25/1: Market review of card scheme and processing fees remedies consultation (CP25/1). PS25/1 seeks views on a number of proposed remedies designed to address the problems that were identified in the PSR's final report following its market review into scheme and processing fees.

The proposed remedies include:

• better information for merchants and acquirers by requiring schemes to provide more information on fees so merchants can better understand the fees they are charged and ultimately reduce costs;
• regulatory financial reporting to allow the PSR to effectively monitor and understand the schemes’ financial performance on fees charged in the UK;
• better pricing governance by requiring schemes to improve their processes around pricing decisions and their related processes and record-keeping to enable the PSR to better understand the appropriateness of these fees; and
• publication by schemes of more information to improve accountability and transparency.

Responses are requested by 28 May 2025. [2 Apr 2025]  #Payments

---

Europe

ESAs: Update on risks and vulnerabilities in the EU financial system

The Joint Committee of the ESAs has published its Spring 2025 update on risks and vulnerabilities in the EU financial system. The ESAs warn that growing geopolitical tensions and rising cyber risks present significant challenges to financial stability. These include trade disputes, rapidly shifting policies, ongoing international conflicts and the prospect of economic fragmentation which are reshaping global markets, requiring heightened vigilance and adaptability from supervisors and financial entities alike. Given the uncertainties faced by financial institutions, the ESAs emphasise the need for proactive risk management, stronger cyber resilience and a close monitoring of global financial linkages, as well as international cooperation and regulatory preparedness. [31 Mar 2025]  #Cyber

OJ: Delegated and Implementing Regulations under MiCAR

The following regulations under the Markets in Cryptoassets Regulation (MiCAR) have been published in the OJ:

• Commission Delegated Regulation (EU) 2025/300 supplementing MiCAR with regard to regulatory technical standards (RTS) on information to be exchanged between competent authorities.
• Commission Delegated Regulation (EU) 2025/305 supplementing MiCAR with regard to RTS specifying the information to be included in an application for authorisation as a cryptoasset service provider (CASP).
• Commission Delegated Regulation (EU) 2025/413 supplementing MiCAR with regard to RTS specifying the detailed content of information necessary to carry out the assessment of a proposed acquisition of a qualifying holding in an issuer of an asset-referenced token (ART).
• Commission Delegated Regulation (EU) 2025/414 supplementing MiCAR with regard to RTS specifying the detailed content of information necessary to carry out the assessment of a proposed acquisition of a qualifying holding in a cryptoasset service provider.
• Commission Delegated Regulation (EU) 2025/422 supplementing MiCAR with regard to RTS specifying the content, methodologies and presentation of information in respect of sustainability indicators in relation to adverse impacts on the climate and other environment-related adverse impacts.
• Commission Implementing Regulation (EU) 2025/306 laying down implementing technical standards (ITS) for the application of MiCAR with regard to standard forms, templates and procedures for the information to be included in the application for authorisation as a CASP.

The Regulations enter into force on the twentieth day following that of their publication in the OJ. [31 Mar 2025]  #Crypto #MiCAR

---

Hong Kong

APAC Fighting Financial Crime Conference 2025 held under the theme of fighting financial crime in a more complex world

In a keynote address at the APAC Fighting Financial Crime Conference 2025, Mr Raymond Chan (HKMA's Executive Director (Enforcement and AML)) made a number of comments regarding the work that is being done to fight financial crime, including:

• In September 2024, the HKMA wrote to the industry posing two important questions: (i) Are the technologies which the industry has been using in anti-money laundering (AML) and counter-financing of terrorism (CFT) fit for purpose, and (ii) how is the industry using or considering using artificial intelligence (AI) to make sure its AML/CFT defence remains sufficiently robust?  The HKMA has just received feasibility studies and action plans from the banks and will be working with them and an external consulting firm over the coming months as a core element of its ongoing supervision.
• The HKMA will shortly issue a tender seeking consultancy support to recommend, design and build a solution which will generate insights to combat fraud and other financial crimes by leveraging and analysing the payment data available in the banking system, working with the Police and the industry.  #AI 

SFC restarts publication of Enforcement Reporter, announcing a new AI-empowered market scanning detection model and discussing other enforcement related issues

The SFC has restarted its publication of the Enforcement Reporter. The latest edition introduces a new artificial intelligence (AI)-empowered market scanning detection model to identify governance red flags for early intervention and promote proactive risk management by boards and audit committees. [31 Mar 2025]  #AI

HKMA and BSP hold bilateral meeting in the Philippines to exchange views and strengthen cooperation on various areas of central banking

The HKMA and Bangko Sentral ng Pilipinas (BSP) have held a bilateral meeting in the Philippines, led by the HKMA's Chief Executive, Mr Eddie Yue, and the BSP's Governor, Dr Eli M. Remolona, Jr.

Officials from the HKMA and the BSP discussed and shared insights on capital market development, digital payments and connectivity, digital banking, and sustainable finance.  Issues covered included bond market and ecosystem, multilateral digital payment projects, cybersecurity risk management and consumer protection, digital financial literacy, climate risk stress testing, and other green finance initiatives. [31 Mar 2025]  #Cyber #Payments

 

---

Thailand

BoT: Project Nexus partners incorporate NGP to run cross-border payment scheme

With its partners – the Reserve Bank of India (RBI), the Bank Negara Malaysia (BNM), the Bangko Sentral ng Pilipinas (BSP), and the Monetary Authority of Singapore (MAS) – the Bank of Thailand (BoT) has announced the formal incorporation of Nexus Global Payments (NGP) in Singapore to operationalise and manage a multilateral instant cross-border payments scheme. NGP is commencing a procurement process to appoint a Nexus Technical Operator (NTO) to undertake the technical build and run the day-to-day operations of the Nexus scheme. [3 Apr 2025]  #Payments

 

---

India

IFSCA: Fee structure for PSOs/PSO applicants

The International Financial Services Centres Authority (IFSCA) has published the fee structure for payment system operators (PSOs), and applicants who wish to set up a PSO, in the IFSC. [2 Apr 2025]  #Payments

 

---

Philippines

BSP and HKMA hold bi-lateral meeting

The Bangko Sentral ng Pilipinas (BSP) has announced it has held a bi-lateral meeting with the Hong Kong Monetary Authority (HKMA) to exchange views and strengthen cooperation on various areas of central banking.

Hosted by the BSP, officials from the two institutions discussed and shared insights on capital market development, digital payments and connectivity, digital banking, and sustainable finance.  [31 Mar 2025]  #Payments

 

---

Vietnam

SBV: Cross-border payment connection via QR codes between Vietnam and Singapore

The SBV has announced that, within the framework of the Singaporean Prime Minister Lawrence Wong’s official visit to Vietnam, businesses of the two countries have exchanged different arrangements of cooperation to promote the comprehensive strategic partnership between Vietnam and Singapore. Among these arrangements, the National Payment Corporation of Vietnam (NAPAS) has been working with the Network for Electronic Transfers (Singapore) Pte. Ltd. (NETS) on implementing cross-border payment connection services via QR codes between Vietnam and Singapore. [28 Mar 2025]  #Payments

 

---

US

CFTC staff withdraw advisories on review of risks related to clearing digital assets and on virtual currency derivative product listings

The CFTC's Division of Clearing and Risk (DCR) has withdrawn CFTC Staff Advisory No. 23-07, Review of Risks Associated with Expansion of Derivatives Clearing Organization (DCO) Clearing of Digital Assets. The CFTC release explains that the DCR determined to withdraw the advisory to ensure that it does not suggest that its regulatory treatment of digital asset derivatives will vary from its treatment of other products.

The withdrawal of the clearing advisory is accompanied by the withdrawal by the DMO and DCR of CFTC Staff Advisory No. 18-14, Advisory with Respect to Virtual Currency Derivative Product Listings. The DMO and DCR determined that the advisory is no longer needed given additional staff experience with virtual currency derivative product listings and increasing market growth and maturity.  [28 Mar 2025]  #DigitalAsset

FDIC clarifies process for banks to engage in crypto-related activities

The Federal Deposit Insurance Corporation (FDIC) has issued a Financial Institution Letter (FIL-7-2025) that provides new guidance for FDIC-supervised institutions engaging or seeking to engage in crypto-related activities. The new guidance, which rescinds FIL-16-2022, clarifies that FDIC-supervised institutions may engage in permissible crypto-related activities without receiving prior FDIC approval, provided that they adequately manage the associated risks.

The FDIC will continue to engage with the President’s Working Group on Digital Asset Markets and expects to issue further guidance in the future to provide additional clarity regarding banks’ engagement in particular crypto-related activities. The FDIC will also work with the other banking agencies to replace interagency documents related to crypto-assets with further guidance or regulations.  [28 Mar 2025]  #Crypto

FSOC: Readout of March meeting

The Treasury has published the readout of the March Financial Stability Oversight Council (FSOC).  During the meeting, the Secretary of the Treasury, Scott Bessent, shared his priorities for FSOC. 

FSOC also heard a presentation from staff of Treasury, SEC, and the Office of Financial Research (OFR) on developments in the Treasury market, and received a briefing by staff of the Board of Governors of the Federal Reserve System on the potential financial stability consequences of cyber incidents.  [20 Mar 2025]  #Cyber