In this regular update, we round-up FinTech-related regulatory developments for the week ending 8 October 2021.
Global
FSB: Progress report on the regulation, supervision and oversight of global stablecoin arrangementsThe Financial Stability Board (FSB) has published a report on the progress made on the implementation of its high-level recommendations for regulation, supervision and oversight of global stablecoin arrangements. The report incorporates the results of a comprehensive stocktake of the implementation of the FSB’s high-level recommendations in 48 jurisdictions in the FSB and its Regional Consultative Groups, covering 21 advanced economies and 27 emerging market and developing economies. The report notes that the market capitalisation of existing stablecoins has continued to grow over the course of 2020/21. Overall, however, the implementation of the FSB high-level recommendations across jurisdictions is still at an early stage. The FSB is continuing to monitor closely FinTech developments and potential financial stability risks, including risks arising from the growth of crypto-assets and stablecoins in particular. [7 Oct 2021] |
#Stablecoins |
UK
BoE: Financial Policy Summary and Record - October 2021The Bank of England (BoE) has published the financial policy summary and record (FPSR) of the meeting of its FPC on 23 September 2021. The FPSR refers to topics including:
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#Cryptoassets |
CMA: Responses to HMG's proposals on new powersThe Competition and Markets Authority (CMA) has published two responses to HM Government’s (HMG) consultations: Reforming competition and consumer policy and A new pro-competition regime for digital markets. In the responses, the CMA welcomes the proposals made by HMG to enhance its ability to tackle breaches of competition and consumer law, and empower the Digital Markets Unit (DMU). [4 Oct 2021] |
#DigitalMarkets |
EU
ECB: Speech on big techs and global stablecoinsThe European Central Bank (ECB) has published a speech by Fabio Panetta, Member of the Executive Board, on the confluence of big techs and global stablecoins. In his speech, Mr Panetta spoke about:
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#BigTech
#Stablecoins |
EBA: 2022 Work ProgrammeThe European Banking Authority (EBA) has published its annual work programme for 2022, outlining its activities, tasks and key strategic areas of work for the coming year. EBA has set five priorities for this period:
In addition, the EBA plans to provide tools to measure and manage environmental, social and corporate governance (ESG) risks, and monitor and mitigating the impact of Covid-19. [6 Oct 2021] |
#DigitalResilience
#Innovation |
EC: Joint Statement on EU-US Financial Regulatory ForumThe European Commission (EC) has published a joint statement on the EU-US Joint Financial Regulatory Forum (the Forum). The Forum recognised past EU and US cooperation and focused on six themes:
Participants will continue to engage on these topics, as well as on other topics of mutual interest, ahead of the next Forum meeting, which is expected to take place in early 2022. [5 Oct 2021] |
#Innovation |
Hong Kong
HKMA publishes materials for upcoming briefing to LegCo Panel on Financial Affairs on 18 October 2021The HKMA has published presentation materials for its upcoming briefing to the Legislative Council (LegCo) Panel on Financial Affairs on 18 October 2021. The updates in relation to FinTech are as follows:
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#CBDCs |
Hong Kong Chief Executive discusses government's plans to enhance Hong Kong's status as international finance centre in 2021 policy addressThe Chief Executive of Hong Kong, Mrs Carrie Lam, delivered her 2021 Policy Address on 6 October 2021. Mrs Lam indicated that the Central Government delegation had reiterated support for Hong Kong in a number of areas at the talks on the 14th Five‑Year Plan. The government plans to step up its efforts in various areas to enhance Hong Kong's status as an international financial centre. In relation to fintech, such efforts include promoting cross‑border fintech and actively exploring with the Mainland the formation of a one‑stop sandbox network to facilitate financial institutions and information and technology companies from Guangdong, Hong Kong and Macao in testing cross‑border fintech applications. [6 Oct 2021] |
#Sandbox |
SFC provides guidance to intermediaries on operational resilience and remote workingThe SFC has released a circular to provide guidance on operational resilience and remote working. While the guidance provided on cybersecurity, business continuity plans, internal controls and risk management in codes, guidelines and circulars has assisted licensed corporations in maintaining resilience during the pandemic, the SFC considers it important to ensure continued strength against operational disruptions by adopting a comprehensive approach. Accordingly, the SFC has set out operational resilience standards and required implementation measures which supplement the SFC’s existing guidance, including standards on:
The SFC has also set out expected regulatory standards for managing and mitigating some major risks of remote working, including on:
The SFC encourages intermediaries to read the Report on Operational Resilience and Remote Working Arrangements which accompanies the circular. The report aims to provide intermediaries with a better understanding of the regulatory standards set out in the circular, including providing suggested techniques and procedures as well as case examples and lessons learned drawn from the SFC's review of licensed corporations' measures during the pandemic and other disruptive events. [4 Oct 2021] |
#OpRes
#Outsourcing #CyberSecurity |
HKMA releases technical whitepaper on retail CBDC and seeks comments on proposed architectureThe HKMA has released a technical whitepaper on retail central bank digital currency (CBDC), titled “e-HKD: A technical perspective”. As part of the “Fintech 2025” strategy announced in June this year (see our previous update), the HKMA intends to strengthen the research work on CBDC with a view to future-proofing Hong Kong in terms of CBDC readiness. In addition to continued collaboration with peer central banks on the cross-border application of wholesale CBDCs, the HKMA has started a study on the prospect of issuing retail CBDCs in Hong Kong (ie, e-HKD) covering both technical and policy considerations, and aims to come up with an initial view by the mid-next year. The whitepaper constitutes part of the HKMA’s research effort on the technical front. It explores potential technical design options for issuing and distributing retail CBDCs, building on the model that the HKMA is jointly investigating with the Hong Kong Centre of the BIS Innovation Hub. The whitepaper is the first among similar papers issued by central banks to explore a technical architecture which contains a ground breaking privacy preservation arrangement that allows transaction traceability in a privacy-friendly manner. In the whitepaper, the HKMA has also identified a number of issues for further exploration, summarised as "problem statements", including those relating to:
The HKMA invites academia and industry to comment on its proposed architecture by making reference to the "problem statements". [4 Oct 2021] |
#CBDCs
#OpRes #CyberSecurity
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Thailand
BOT awarded ‘2021 Best in Future of Digital Innovation’ for DLT Scripless Bond ProjectThe Bank of Thailand (BOT) was awarded the IDC Future Enterprise Awards: 2021 Best in Future of Digital Innovation at the IDC Digital Transformation Summit Singapore event, held on 7 October, 2021. The award recognizes outstanding organizations that have made critical breakthroughs in digital transformation. BOT’s digital transformation project was selected with regard to the development of DLT Scripless Bond Project, which uses smart contracts in verifying data, thus helping to lower the overall costs of bond issuance for all related institutions, and enabling investors to receive bonds much faster. [7 Oct 2021] |
#DLT #SmartContracts |
US
CFTC Charges Nigerian and American Citizens Operating as PrimeFX with Forex and Bitcoin Fraud and MisappropriationThe Commodity Futures Trading Commission (CFTC) has announced that it filed a civil enforcement action against seven defendants. The complaint alleges that during the relevant period, from approximately June 2016 to February 2019, the defendants used a technology company website to fraudulently solicit and subsequently misappropriate over $1.2 million from US and international customers, as part of a coordinated scheme, for purported trading in foreign currency and Bitcoin. The CFTC seeks restitution, disgorgement, civil monetary penalties, trading and registration bans, and injunctions against further violations of the Commodity Exchange Act and CFTC regulations, as charged. [30 Sep 2021] |
#Bitcoin |
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