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In this regular post, we round-up FinTech-related financial services regulatory developments for the week ending 12 January 2024.

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UK

PSR: CP – Card-acquiring market remedies: change to list of directed legal entities

The Payment Systems Regulator (PSR) has issued CP24/1 on proposed revisions to Specific Directions 14, 15 and 16, which relate to the supply of card-acquiring services. CP24/1 contains proposals to update the list of directed legal entities and amend the method used by the PSR to make future updates.  The PSR is also proposing to add Checkout Ltd to the list.

Responses are requested by 9 February 2024. The PSR expects to make final decisions in Spring 2024 and to publish finalised, updated version of the direction shortly thereafter. [11 Jan 2024]

#Payments


Europe

EBA: RDB Q3 2023

The European Banking Authority (EBA) has published its Q3 2023 quarterly Risk Dashboard (RDB) together with the Risk Assessment Questionnaire (RAQ). The RDB and RAQ are accompanied by a minimum requirement for own funds and eligible liabilities (MREL) dashboard. The EBA reports that the EU and EEA’s banks remained highly profitable, well capitalised and maintained robust liquidity. Banks expect the asset quality to deteriorate as higher interest rates affect borrowers. The RDB highlights that operational risks remained elevated for EU/EEA banks driven by cyber and data security, followed by conduct and legal risks, similar to previous RAQs. An increasing share of banks, compared to previous RAQs, cites fraud as a main operational risk. [12 Jan 2024]

#CyberSecurity


Hong Kong

Green and Sustainable Finance Cross-Agency Steering Group announces three key initiatives to support Hong Kong’s sustainable finance opportunities

The Green and Sustainable Finance Cross-Agency Steering Group has announced three key initiatives to support Hong Kong in capitalising its sustainable finance opportunities, including:

Leveraging technology to support sustainability reporting and data analysis

  • The steering group will organise an event in Q1 2024 to showcase potential green fintech use cases to scale the sustainable finance market.

The steering group is co-chaired by the HKMA and the SFC, and its members include the Insurance Authority, the HKEX and other financial regulators and government bureaus. The Accounting and Financial Reporting Council has just joined a new member.  [8 Jan 2024]

#GreenTech


Singapore

MAS: Response to Parliamentary question on take up of 'money lock' in local banks and protection against scams

MAS has published its response to a Parliamentary question on whether the Government has data on the take-up rate of the 'money lock' feature at local banks; and whether MAS is working with financial institutions (FIs) to explore new technologies and measures to better protect local banking consumers from digital banking scams.

Money lock is a feature that allows customers to set aside a portion of funds in their bank accounts that cannot be transferred digitally so that losses are mitigated in case digital access is compromised. MAS confirmed that this feature has been activated on around 38,000 accounts, with over $3.2 billion of savings set aside.

The regulator also confirmed that it is working closely with FIs, industry players and other Government agencies to implement technologies and solutions to counter increasingly sophisticated scam tactics. An example is the enhancement of banks’ banking apps which blocks access to the app when there is a side-loaded app with access permissions turned on in the customer’s mobile phone.  [10 Jan 2024]

#DigitalScams

MAS: Response to Parliamentary question on ensuring licensed remittance companies fulfil commitments

MAS has published its response to a Parliamentary question on whether remittance companies in Singapore have an obligation to ensure funds placed through them reach their intended destinations.

In response, MAS confirmed that licensed payment service providers (licensees) must ensure that any money accepted for money transfer services is deposited in the designated recipient’s accounts within three to seven business days. MAS will undertake a supervisory review and/or take enforcement action for breaches of its requirements.

MAS also confirmed that, in light of the recent disputes regarding remittances to China, it has decided to temporarily suspend the use of non-bank and non-card channels by licensees for money transfers to China.  [10 Jan 2024]

#Payments


Thailand

SECT consults on digital asset business licensing process and creditability of digital asset business operators

The Securities and Exchange Commission (SECT) has published a consultation on proposed amendments to the digital asset business licensing process and draft regulations on the creditability of digital asset business operators.

The proposals aim to enhance the efficiency of the licensing process and ensure the clarity and appropriateness of the regulatory framework regarding digital asset business operators.

Responses to the consultation are requested by 9 February 2024.  [9 Jan 2024]

#DigitalAsset


Philippines

BSP and BAIPHIL sign MoU

The Bangko Sentral ng Pilipinas (BSP) and the Bankers Institute of the Philippines (BAIPHIL) have signed a memorandum of agreement (MoU) covering joint activities such as capacity building sessions for bank employees and the sharing of subject matter experts and non-confidential research materials. The collaboration will include advocacies such as digital finance, financial literacy, financial inclusion, sustainable finance, legislative initiatives, and reforms.  [8 Jan 2024]

#DigitalFinance


US

SEC Chair's statement on the approval of spot bitcoin ETPs

The Securities and Exchange Commission (SEC) has approved the listing and trading of a number of spot bitcoin exchange-traded product (ETP) shares.

A statement made by SEC Chair Gary Gensler explains that beginning from 2018 through March 2023, the SEC disapproved more than 20 exchange rule filings for spot bitcoin ETPs. One of those filings, made by Grayscale, contemplated the conversion of the Grayscale Bitcoin Trust into an ETP.

The SEC then faced a new set of filings similar to those that had been disapproved in the past. Circumstances, however, had changed. The U.S. Court of Appeals for the District of Columbia held that the SEC had failed to adequately explain its reasoning in disapproving the listing and trading of Grayscale’s proposed ETP (the Grayscale Order). The court therefore vacated the Grayscale Order and remanded the matter to the SEC. Based on these circumstances and those discussed more fully in the approval order, the SEC felt the most sustainable path forward is to approve the listing and trading of these spot bitcoin ETP shares.

The SEC's action is cabined to ETPs holding one non-security commodity which is bitcoin.  [10 Jan 2024]

#Bitcoin

 

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Cat Dankos

Regulatory Consultant, London

Cat Dankos

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Cat Dankos photo

Cat Dankos

Regulatory Consultant, London

Cat Dankos
Cat Dankos