FinTech Global FS Regulatory Round-up - w/e 7 March 2025

ICYMI

• What you need to know about AI disputes in Australia
• Cyber security: A month in retrospect (Australia) - February 2025

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UK

SI: The Digital Markets, Competition and Consumers Act 2024 (Commencement No. 2) Regulations 2025

The Digital Markets, Competition and Consumers Act 2024 (Commencement No. 2) Regulations 2025 have been made. This statutory instrument (SI) brings into force certain provisions of the Digital Markets, Competition and Consumers Act 2024 (DMCCA 2024) on 6th April 2025 and brings further provisions, relating to consumer savings, into force on 1st January 2026.

An explanatory note is attached to the SI.  [7 Mar 2025]  #DigitalMarkets

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Europe

ESAs: Opinion on EC rejection of draft RTS on subcontracting under DORA

The European Supervisory Authorities (ESMA , EIOPA and the EBA – the ESAs) have issued an Opinion on the European Commission’s (EC) rejection of the draft Regulatory Technical Standard (RTS) on subcontracting under the Digital Operational Resilience Act (DORA).

The EC rejected the original draft RTS, which specified further elements that financial entities must determine and assess when subcontracting ICT services that support critical or important functions, on the grounds that certain elements exceeded the powers given to the ESAs by DORA. The ESAs accept the EC's assessment, and confirm that they will not recommend further amendments to the RTS over those proposed by the EC. 

The ESAs encourage the EC to finalise the adoption of the RTS without further delay.  [7 Mar 2025]  #DORA #OpRes

ECB note: Digital euro outside the euro area

Among the documents published from the Council of the EU meeting on 19 February was a ECB working document on the digital euro which set out considerations about the impact of wide circulation of the digital euro outside the euro area. The short document sets out some factors to consider when assessing the possible scenario of use or holding of digital euro outside the euro area and the impact of wide use or holding of the digital euro outside the euro area as a medium of exchange and as a store of value. [3 Mar 2025]  #DigitalEuro #CBDC

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Australia

Consumer Data Right expansion to deliver a better deal for consumers

The Assistant Treasurer and Minister for Financial Services, Stephen Jones, has announced that the Government will uplift the Consumer Data Right (CDR) by expanding it to non-bank lending providers; this will commence from mid-2026. In August 2024, the Government announced the CDR reset, to address concerns around high compliance costs and the limited uptake of use cases by consumers. The media announcement stated that the Government:

• has amended the CDR rules to streamline the consent process for consumers;
• is examining changes to the framework that could be made to reduce costs and facilitate high value use case;
• is exploring how the existing data sharing framework can better support high priority use cases such as consumer finance and lending, small business accounting services and energy switching;
• has written to the Data Standards Body setting out the Government’s expectations that future standards changes align with the Government’s direction for CDR; and
• intends to move towards a ban of screen scraping.

Apart from expanding the CDR to non-bank lending providers, other changes include:

• removing the requirement for data holders to share consumer or product data for niche products such as asset finance, consumer leases, reverse mortgages, margin loans and foreign currency amounts;
• reducing the period of data to be held and shared from 7 years to 2 years, reducing costs associated with maintaining and responding to requests for historical data; and
• ensuring Buy Now, Pay Later products are covered by data sharing obligations.

The article said that 'the Government is working closely with stakeholders and will continue to expand the CDR in ways that foster innovation, whilst being purposeful and focussed on consumer benefit'. [3 Mar 2025]  #CDR #Data #OpenBanking #OpenFinance

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Hong Kong

SFC publishes quarterly report for October to December 2024

The SFC has published its quarterly report, summarising its work and key developments from October to December 2024.  The highlights covered by the report include (among others):

Transforming markets via technology and ESG

• The SFC granted licences to eight virtual asset trading platform (VATP) applicants during the quarter and are considering the applications of eight others, four of which are deemed to be licensed.
• In December 2024, the SFC provided VATPs with a roadmap on their licensing journey and guidance on the revamped second-phase assessment.  It also established in early 2025 a consultative panel to support licensed VATPs and consider their views in its policymaking. [6 Mar 2025]  #VirtualAsset #Crypto

SFC warns public of suspected virtual asset-related fraud

The SFC has warned the public of an entity operating under the name 'Linkbex', with a website at hxxps://fxlinkbex[.]com, for suspected virtual asset-related fraudulent activities. Linkbex made false claims of its affiliation with seven SFC licensed corporations in Hong Kong.  Investors reported that their accounts with Linkbex were locked due to purported 'anti-money laundering investigation of the SFC'.

At the SFC’s request, the Hong Kong Police Force has taken steps to block access to the website of Linkbex.  Linkbex and its website have been posted on the SFC’s suspicious virtual asset trading platforms alert list. The SFC urges investors to stay vigilant and beware of fraud when making investment decisions, and reminds the public that they can look up public announcements on its official website concerning certain regulatory actions, such as freezing client accounts of licensed intermediaries.  [6 Mar 2025]  #VirtualAsset #Crypto #Fraud

 

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Singapore

MAS: Response to PQ on tightening of regulations for digital payment token service providers

MAS has published the response to a Parliamentary Question (PQ) on the Government's key considerations in deciding to tighten regulations for digital payment token service providers.

The response states that cryptocurrencies are highly volatile and are usually not anchored on any fundamental value. Were an individual to use a credit card to purchase cryptocurrencies, that borrowing would typically attract a higher rate of interest than other forms of credit. If the value of the cryptocurrency falls, losses may be substantial losses meaning that the credit card debt may not be cleared. More generally, using credit or leverage magnifies losses, and investors can lose more than the principal amount they put in. MAS has therefore prohibited digital payment token service providers from providing credit or leverage to all retail customers, regardless of age, for the purchase of cryptocurrencies.  [5 Mar 2025]  #Crypto

 

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Malaysia

SCM and MCMC to combat scams via enhanced regulatory oversight

The SCM has announced that it has agreed with the Malaysian Communications and Multimedia Commission (MCMC) to step up cooperation to combat the growing threat of online scams. The areas of collaboration include strengthening enforcement and scam prevention and leveraging on AI capabilities. The SCM and the MCMC will work closely with service providers and relevant stakeholders to expedite scam detection and speedier content takedowns.  [1 Mar 2025]  #AI #OnlineScams

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India

RBI Governor meets with non-bank payment system operators and fintechs

The Reserve Bank of India (RBI) has reported that its Governor Sanjay Malhotra met with non-bank payment system operators and fintechs, as part of the RBI's series of engagements with the payments and fintech ecosystem. In his remarks at the meeting, the Governor recognised the important role played by fintechs, while underscoring the need for responsible innovation. He also emphasised the need for ensuring compliance by entities new to the regulatory space and confirmed that the RBI would continue to adopt a consultative approach.  [5 Mar 2025]  #Payments

 

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US

SEC Crypto Task Force announces series of roundtables with an initial event on March 21

The SEC has announced that its Crypto Task Force will host a series of roundtables to discuss key areas of interest in the regulation of crypto assets. The “Spring Sprint Toward Crypto Clarity” series will begin on March 21 with its inaugural roundtable, “How We Got Here and How We Get Out – Defining Security Status.” The March 21 event is open to the public, but the number of in-person participants may be limited and visitors will be subject to security checks. The primary discussion will be streamed live on SEC.gov, and a recording will be posted at a later date. Information regarding the agenda and roundtable speakers will be posted on the Crypto Task Force webpage soon.  [3 Mar 2025]  #Crypto

SEC to host AI roundtable

The SEC has announced that it will hold a roundtable discussion on AI in the financial industry on March 27; the event is open to the public for either in-person or virtual attendance. The AI roundtable will discuss the risks, benefits, and governance of AI in the financial industry. SEC Acting Chair Mark Uyeda and SEC Commissioners Hester Peirce and Caroline Crenshaw are expected to deliver remarks.  [28 Feb 2025]  #AI

SEC Division of Corporate Finance statement on meme coins

The SEC's Division of Corporate Finance has issued a staff statement setting out its views on "meme coins". The statement describes meme coins and explains that it is the Division’s view that transactions in the types of meme coins described in the statement, do not involve the offer and sale of securities under the federal securities laws. As such, persons who participate in the offer and sale of meme coins do not need to register their transactions with the Commission under the Securities Act of 1933 or fall within one of the Securities Act’s exemptions from registration. Accordingly, neither meme coin purchasers nor holders are protected by the federal securities laws.  [27 Feb 2025]  #Crypto