Edition Highlights:

  • The Federal Reserve Board establishes the framework for implementing the US Basel III Countercyclical Capital Buffer.
  • The European Commission establishes the framework for the recovery and resolution of credit institutions and investment firms, specifying requirements for financial contract records.
  • The Commodity Futures Trading Commission’s final rules specify and define the types of cyber security testing essential to fulfill system safeguards testing obligations.

 

Current coverage period: Through September 30, 2016

Note: Anticipated business impact for covered regulations is shown using the following rating legend:
(*Low) (** Medium) (*** High)

 

CURRENT REGULATIONS:

European Securities and Markets Authority (ESMA)(**):
Final Report: Guidelines on MAR – information relating to commodity derivatives markets or related spot markets for the purpose of the definition of inside information on commodity derivatives
Publication Date: September 30th 2016
Risks Covered: Compliance Risk, Conduct Risk
Business Processes Impacted: Reporting, Trading, Consumer/Investor Protection
These final guidelines revise the definition of inside information with regards to commodity derivatives under the Market Abuse Regulation (MAR).1

 

Board of Governors of the Federal Reserve System (The Fed)(**):
Regulatory Capital Rules: The Federal Reserve Board’s Framework for Implementing the U.S. Basel III Countercyclical Capital Buffer
Publication Date: September 16th 2016
Risks Covered: Systemic Risk
Business Processes Impacted: Capital Adequacy and Capital Planning
The final policy statement describes the framework that the Board will follow under its Regulation Q in setting the amount of the US countercyclical capital buffer for advanced approaches bank holding companies, savings and loan holding companies, and state member banks.2

 

Consumer Financial Protection Bureau (CFPB)(*):
Self-Regulatory Status of New Uniform Residential Loan Application and Collection of Expanded Home Mortgage Disclosure Act Information about Ethnicity and Race in 2017 under Regulation B
Publication Date: September 23rd 2016

Risks Covered: Conduct Risk

Business Processes Impacted: Consumer/Investor Protection
This final approval is pursuant to section 706(e) of the Equal Credit Opportunity Act concerning the new Uniform Residential Loan Application and the collection of expanded Home Mortgage Disclosure Act information about ethnicity and race in 2017.3

 

Securities and Exchange Commission (SEC)(**):
Standards for Covered Clearing Agencies
Publication Date: September 28th 2016

Risks Covered: Conduct Risk, Operational Risk

Business Processes Impacted: Clearing and Settlement – Exchange Traded and Over-the-Counter, Risk Management and Stress Testing
These amendments establish, among other things, enhanced standards for the operation and governance of those clearing agencies registered with the Commission (“registered clearing agencies”) that meet the definition of “covered clearing agency.”4

 

Prudential Regulation Authority (PRA)(***):
PRA Rulebook: CRR Firms, Non CRR Firms, Non-Authorised Persons: Depositor Protection Instrument 2016
Publication Date: September 27th 2016
Risks Covered: Conduct Risk, Liquidity Risk

Business Processes Impacted: Consumer/Investor Protection
The instrument cited as CRR (Capital Requirements Regulation) Firms, Non CRR Firms, Non-authorized Persons: Depositor Protection Instrument 2016 in the PRA Rulebook is in force effective October 1, 2016.5

 

European Commission (EC)(**):
Commission Regulation (EU) 2016/1703 of 22 September 2016 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Financial Reporting Standards 10 and 12 and International Accounting Standard 28
Publication Date: September 23rd 2016

Risks Covered: Compliance Risk

Business Processes Impacted: Corporate Finance, M&A and Advisory, Audit, Legal and Compliance
This regulation amends Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Financial Reporting Standards 10 and 12 and International Accounting Standard 28.6

 

European Commission (EC)(***):
European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms with regard to regulatory technical standards specifying a minimum set of the information on financial contracts
Publication Date: September 24th 2016
Risks Covered: Operational Risk, Business Cycle Risk

Business Processes Impacted: Recovery and Resolution Planning
This regulation establishes the requirement to maintain detailed records of financial contracts and the minimum set of information on financial contracts to be kept in detailed records.7

 

Monetary Authority of Singapore (MAS)(**):

http://www.mas.gov.sg/~/media/MAS/Regulations%20and%20Financial%20Stability/Regulations%20Guidance%20and%20Licensing/Securities%20Futures%20and%20Fund%20Management/Regulations%20Guidance%20and%20Licensing/Regulations/Securities%20and%20Futures%20Prescribed%20Futures%20Contracts%20Amendment%20Regulations%202016.pdf
Publication Date: September 27th 2016
Risks Covered: Market Risk, Sovereign Risk

Business Processes Impacted: Trading, Reporting
The regulation makes amendments to the Securities and Futures (Prescribed Futures Contracts) Regulations 2005 (G.N. No S 368/2005) and is operational effective August 8, 2016.8

 

Financial Conduct Authority (FCA)(**):
Strengthening Accountability in Banking and Insurance: Regulatory References Final Rules
Publication Date: September 28th 2016
Risks Covered: Conduct Risk, Operational Risk

Business Processes Impacted: Audit, Legal and Compliance, Business Continuity Management
This policy statement sets out the main issues that arose from the consultation on strengthening accountability in banking and insurance, and publishing final rules on regulatory references.9

 

Commodity Futures Trading Commission (CFTC)(***):
System Safeguards Testing Requirements
Publication Date: September 19th 2016
Risks Covered: IT Risk, Operational Risk, Cyber Security Risk
Business Processes Impacted: Business Continuity Management, Clearing and Settlement – Exchange Traded and Over-the-Counter
The final rules amend the CFTC’s current system safeguards rules for all designated contract markets, swap execution facilities, and swap data repositories by specifying and defining the types of cyber security testing essential to fulfilling system safeguards testing obligations.10

 

FORTHCOMING REGULATIONS:

Securities and Exchange Commission (SEC)
Amendment to Securities Transaction Settlement Cycle
The proposed amendment is designed to reduce a number of risks, including credit risk, market risk, and liquidity risk and, as a result, reduce systemic risk for US market participants.11

 

Board of Governors of the Federal Reserve System (The Fed)
Amendments to the Capital Plan and Stress Test Rules
This rule proposes to revise the capital plan and stress test rules for bank holding companies with $50 billion or more in total consolidated assets and US intermediate holding companies of foreign banks.12

 

Australian Prudential Regulation Authority (APRA)
Proposed minor amendments to APS 112
APRA’s notice to its authorized deposit-taking institutions (ADIs) details the proposed minor amendments to Prudential Standard APS 112 Capital Adequacy: Standardized Approach to Credit Risk.13

 

Visit www.accenture.com/RegulatoryCompliance for latest insights on regulatory remediation and compliance transformation.

 

References:

  1. “Commission Delegated Regulation supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the reporting of transactions to competent authorities,” European Commission, August 24, 2016. Access at:
    Commission Delegated Regulation (EU) …/… of 28.7.2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the reporting of transactions to competent authorities
  2. “EBA Report on the Leverage Ratio Requirements under Articles 511 of the CRR” European Banking Authority, August 3, 2016. Access at: EBA Report on the Leverage Ratio Requirements under Article 511 of the CRR
  3. “Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving a Proposed Rule Change to Adopt FINRA Rule 2030 and FINRA Rule 4580 to Establish “Pay-to-Play” and Related Rules,” Securities and Exchange Commission, August 25, 2016. Access at: Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving a Proposed Rule Change To Adopt FINRA Rule 2030 and FINRA Rule 4580 To Establish ‘‘Pay-To-Play’’ and Related Rules
  1. “Payment Accounts Instrument 2016,” Financial Conduct Authority, August 1, 2016. Access at: Payment Accounts Instrument 2016
  2. “Form ADV and Investment Advisers Act Rules,” Securities and Exchange Commission, Final rule, September 1, 2016. Access at: Form ADV and Investment Advisers Act Rules
  3. “Amendments to the 2013 Mortgage Rules under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z),” Bureau of Consumer Financial Protection, August 4, 2016. Access at: Amendments to the 2013 Mortgage Rules under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z)
  4. “FINRA Announces New Web-based System for the Collection of Short Interest Positions,” Financial Industry Regulatory Authority, Regulatory Notice 16-32, August 19, 2016. Access at: FINRA Announces New Web-based System for the Collection of Short Interest Positions
  5. “MAS Establishes FinTech Innovation Lab,” Monetary Authority of Singapore, August 24, 2016. Access at: MAS establishes FinTech Innovation Lab
  1. “APRA finalises non-capital components of the supervision of conglomerate groups,” Australian Prudential Regulation Authority, August 8, 2016. Access at: APRA finalises non-capital components of the supervision of conglomerate groups
  2. “Rules of Practice for Hearings,” Federal Reserve System, Interim final rule, August 1, 2016. Access at: Rules of Practice for Hearings
  1. “Progress Report on the CCP Workplan,” Basel Committee on Banking Supervision, Committee on Payments and Market Infrastructures, Financial Stability Board, International Organization of Securities Commissions, August 16, 2016. Access at: Progress Report on the CCP Workplan
  1. “Appraisals for Higher-Priced Mortgage Loans Exemption Threshold,” Office of the Comptroller of the Currency, Federal Reserve System, Bureau of Consumer Financial Protection, August 4, 2016. Access at: Appraisals for Higher-Priced Mortgage Loans Exemption Threshold
  1. “Whistleblower Awards Process,” Commodity Futures Trading Commission, August 30, 2016. Access at: Whistleblower Awards Process

  

About the Monthly Regulatory Tracker

The tracker is the monthly initiative aimed at updating the Finance and Risk community with the most recent regulatory changes impacting Banks and Capital Markets firms. We update our comprehensive regulatory database every month by tracking more than 40 regulatory and industry bodies covering North America, Europe and Asia Pacific. Every month, we will highlight approximately 10 regulations shortlisted on the basis of geography of coverage and anticipated business impacts. Our summaries highlight the risks covered and business processes affected by the regulatory reforms.

Disclaimer

This blog is intended for general informational purposes only, does not take into account the reader’s specific circumstances, may not reflect the most current developments, and is not intended to provide advice on specific circumstances. Accenture disclaims, to the fullest extent permitted by applicable law, all liability for the accuracy and completeness of the information in this blog and for any acts or omissions made based on such information. Accenture does not provide legal, regulatory, audit or tax advice. Readers are responsible for obtaining such advice from their own legal counsel or other licensed professional.

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