FinTech Global FS Regulatory Round-up – w/e 19 August 2022

CMA: Open Banking implementation roadmap - update

The Competition and Markets Authority (CMA) has published a letter to the Open Banking Implementation Entity (OBIE) in response to a letter from the OBIE providing its latest status update on items in the Roadmap for the final stages of Open Banking implementation.

In its letter, the CMA notes that the OBIE has identified the key items that still require implementation. While Open Banking has secured positive outcomes for consumers and businesses to date, and significant progress in implementing the Roadmap has been made by the majority of the nine largest retail banks (CMA9), the CMA remains concerned that some will be unable to implement the remaining items within an acceptable timeframe. The CMA says it will actively consider whether any enforcement action is necessary in relation to those of the CMA9 who fail to implement the remaining Roadmap items in a timely manner. [18 Aug 2022]

ECB issues CBDC working paper

The ECB has published a working paper, The economics of central bank digital currency (CBDC), which covers the economic forces that shape the rise of digital money and reviews the motivation for issuing retail CBDC. It also considers: the impact of retail CBDC on the financial system; policy issues and challenges; and areas where more work is required to address knowledge gaps such as data privacy. [17 Aug 2022]

ECB August Supervision Newsletter

The European Central Bank (ECB) has published the latest edition of its Supervision Newsletter.  Featured this month are an interview with Anneli Tuominen, Member of the ECB Supervisory Board, in which Ms Tuominen discusses the priorities for ECB Banking Supervision's crisis management function and articles:

• on the impact of the pandemic on commercial real estate sector and banks' collateral valuation practices;
• discussing banks' preparedness for interest rate and credit risk shocks; and
• on the licensing of crypto-asset activities;
• on the supervisory expectations for prime brokerage services; and
• outlining the achievements of Banking Union and discussing steps to further strengthen the crisis management framework.

The newsletter also includes supervisory banking statistics. [17 Aug 2022]

RBI issues discussion paper on charges in payment systems

The Reserve Bank of India (RBI) has released a discussion paper on charges in payment systems for feedback. The discussion paper covers all aspects relating to charges in payment systems, including Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT) system, Real Time Gross Settlement (RTGS) system and Unified Payments Interface (UPI), as well as various payment instruments (for example, debit cards, credit cards and Prepaid Payment Instruments (PPIs)).

Feedback is requested by October 3, 2022.  [17 Aug 2022]

BSP issues public advisory on unregistered and foreign VASPs

The Bangko Sentral ng Pilipinas (BSP) has issued a public advisory urging the public not to deal with virtual asset service providers (VASPs) that are either unregistered or domiciled abroad. BSP explains that in addition to the inherent risk of price volatility associated with virtual assets (VAs), VASPs that are based abroad may present additional challenge on enforcing legal recourse and consumer protection and redress mechanisms for local customers, among others.

The BSP maintains a list of BSP-registered VASPs.  [16 Aug 2022]

BSP welcomes launch of the Paleng-QR Ph program in Baguio City

The BSP has issued a press release commend Baguio City on its launch of the Paleng-QR Ph program on 14 August 2022.  Baguio City is the first local government unit to implement the program, which was co-developed by the BSP and the Department of the Interior and Local Government (DILG) in support of financial inclusion and digitalization. Paleng-QR Ph aims to build the digital payments ecosystem in the country by promoting cashless payments in public markets and public transportation.  [15 Aug 2022]

Federal Reserve Board provides additional information for banking organizations engaging or seeking to engage in crypto-asset-related activities

The Federal Reserve Board has provided additional information for banking organizations engaging or seeking to engage in crypto-asset-related activities.

The emerging crypto-asset sector presents potential opportunities to banking organizations, their customers, and the overall financial system; however, crypto-asset-related activities may also pose risks related to safety and soundness, consumer protection, and financial stability.

The supervisory letter issued today outlines the steps Board-supervised banks should take prior to engaging in crypto-asset-related activities, such as assessing whether such activities are legally permissible and determining whether any regulatory filings are required. Additionally, the supervisory letter states that Board-supervised banking organizations should notify the Board prior to engaging in crypto-asset-related activities.

The supervisory letter also emphasizes that Board-supervised banking organizations should have adequate systems and controls in place to conduct crypto-asset-related activities in a safe and sound manner prior to commencing such activities. [16 Aug 2022]

CFTC charges Ohio man and his companies with fraudulently solicitating over $12 million and misappropriation in a digital asset trading scheme

The CFTC has announced that it filed a civil enforcement action in the US District Court for the Southern District of Ohio against a New Albany, Ohio resident and his Ohio-based companies. The complaint alleges that the defendant and his companies fraudulently solicited over $12 million and at least 10 bitcoins from more than 150 customers and that defendant and his companies misappropriated customer funds intended for digital asset trading. In addition, the complaint charges the defendant’s parents, as relief defendants in possession of funds to which they have no legitimate interest.

In its continuing litigation, the CFTC seeks restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations. [12 Aug 2022]