Edition Highlights:

  • The Consumer Financial Protection Bureau amends the rules on Prepaid Accounts Under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z).
  • The Monetary Authority of Singapore has published amendments to the Banking (Credit Card and Charge Card) Regulations 2017.
  • The European Commission has issued a Supplementing Directive concerning Regulatory Technical Standards.
  • Insurance Europe has published a speech by Sergio Balbinot commenting on rules concerning innovative products.
  • The International Accounting Standards Board issues IFRS 17 Insurance Contracts.

 

Current coverage period: Through June 30, 2017

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

 

Financial Conduct Authority (FCA) (**):
Future Service Restrictions Instrument 2017
Publication Date: June 22nd 2017

Risks Covered: Operational Risk, Strategic Risk

Business Processes Impacted: Pricing & Valuation, Reporting

The agency has published the Future Service Restrictions Instrument 2017, which amends the Glossary of definitions and Conduct of Business Sourcebook (COBS) effective January 3, 2018.1

Financial Industry Regulatory Authority (FINRA) (***):
Section 300: Non-Tape (Regulatory or Clearing-Only) Reports (Updated)
Publication Date: June 27th 2017

Risks Covered: Operational Risk, Strategic Risk

Business Processes Impacted: Business Continuity Management, Reporting
The agency has updated its trade reporting guidance concerning Section 300 of Types of Reports/Transactions, “Non-Tape (Regulatory or Clearing-Only) Reports.” Also included is a new question and answer section regarding circumstances under which firms may submit clearing-only, non-regulatory reports to FINRA.2

Consumer Financial Protection Bureau (CFPB) (***):
Amendments to Rules Concerning Prepaid Accounts Under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z)
Publication Date: June 29, 2017

Risks Covered: Compliance Risk, Operational Risk

Business Processes Impacted: Business Continuity Management, Reporting
The regulator is proposing to amend Regulation E and Regulation Z.3

Board of Governors of The Federal Reserve System (The Fed) (***):

Regulation D: Reserve Requirements of Depository Institutions
Publication Date: June 26th 2017

Risks Covered: Operational Risk

Business Processes Impacted: Brokerage Services, Capital Adequacy & Capital Planning
The Fed is amending Regulation D, to revise the rate of interest paid on balances maintained, to satisfy reserve balance requirements and the rate of interest paid on excess balances maintained at Federal Reserve Banks by or on behalf of eligible institutions.4

Monetary Authority of Singapore (MAS) (**):
Banking (Credit Card and Charge Card) (Amendment) Regulations 2017
Publication Date: May 30th 2017

Risks Covered: Operational Risk, Strategic Risk

Business Processes Impacted: Reporting, Data Privacy
The MAS has published the Banking (Credit Card and Charge Card) (Amendment) Regulations 2017 effective June 1, 2017.5

European Commission (EC) (***):
Commission Delegated Regulation (EU) 2017/1018 of 29 June 2016 Supplementing Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments with regard to Regulatory Technical Standards specifying information to be notified by investment firms, market operators and credit institutions
Publication Date: June 17th 2017
Risks Covered: Operational Risk, Strategic Risk

Business Processes Impacted: Reporting, Audit, Legal and Compliance
The European Union has adopted the supplementing Directive with regard to regulatory technical standards, thus specifying information to be given by investment firms, market operators and credit institutions. This Regulation enters into force on July 7, 2017.6

European Commission (EC) (**):
Commission Implementing Regulation (EU) 2017/1093 of 20 June 2017 laying down implementing technical standards with regard to the format of position reports by investment firms and market operators
Publication Date: June 21st 2017
Risks Covered: Operational Risk, Business Cycle Risk

Business Processes Impacted: Reporting, Data Privacy, Data Quality Management
The commission, in relation to Regulation (EU) 2017/1093, announced the implementing technical standards pertaining to the format of position reports by investment firms and market operators. The Regulation comes into force July 11, 2017, and will be applicable as of January 3, 2018.7

European Commission (EC) (*):
Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC
Publication Date: June 30th 2017
Risks Covered: Compliance Risk, Cyber Security Risk

Business Processes Impacted: Fraud and Financial Crime, Payments
The Official Journal of the European Union has announced the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market. In addition to repealing Directive 2003/71/EC, this regulation is an integral aspect to the completion of the Capital Markets Union, and it aims to protect investors and support market efficiency, while enhancing the internal market for capital.8

Bank of England (BoE)( **):
Code of Practice and supervisory statement relating to governance of recognised payment system operators
Publication Date: June 21st 2017
Risks Covered: Market Risk, Operational Risk
Business Processes Impacted: Business Continuity Management, Audit, Legal & Compliance
The regulator has published a Policy Statement which summarizes the responses received to its consultation paper on a proposal to introduce a code of practice. This Policy Statement sets out the final code on governance.9

Financial Accounting Standards Board (FASB) (**):
FASB votes to proceed with Final Standard on Hedging
Publication Date: June 7th 2017
Risks Covered: Compliance Risk
Business Processes Impacted: Audit, Legal and Compliance
The FASB has voted to proceed with a new accounting standard expected to improve and simplify accounting rules around hedge accounting. The final Accounting Standards Update (ASU) is expected to be published in August 2017.10

National Bank of Belgium (NBB) (**):
NBB Insurance Stress Test 2017
Publication Date: July 3rd 2017
Risks Covered: Business Cycle Risk, Compliance Risk
Business Processes Impacted: Risk Management & Stress Testing
The NBB has launched the Insurance Stress Test 2017. The testing consists of both a Low for Long scenario, and an International Monetary Fund Adverse scenario that aim to identify the undertakings that may pose a risk to the stability of the insurance sector or the financial system.11

Insurance Europe (IE)(***):
PRIIPs information exchange templates
Publication Date: June 30th 2017
Risks Covered: Conduct Risk, Compliance Risk
Business Processes Impacted: Audit, Legal and Compliance
Insurance Europe has collaborated in the development of two Packaged Retail Investment and Insurance Products (PRIIPs) Regulation templates for information exchange. The templates are designed to assist insurers and asset managers in fulfilling the information exchange concerning multi-option products stipulated by PRIIPs.12

Financial Stability Board (FSB) (*):
FSB issues a report on the Financial Stability Implications from FinTech
Publication Date: June 27th 2017
Risks Covered: Compliance Risk, IT Risk
Business Processes Impacted: Finance & Performance Management, Business Continuity Management
The FSB has set out supervisory and regulatory issues that merit authorities’ attention with regard to the potential financial stability implications from FinTech.13

Insurance Europe (IE) (***):
EU insurance rules must be digital-friendly to reflect consumers’ needs
Publication Date: June 1st 2017
Risks Covered: Cyber Security Risk, Residual Risk
Business Processes Impacted: Payment, Data Privacy
European Insurance and Reinsurance Federation’s President, Sergio Balbinot, commented during a speech that rules for insurers should enable them to provide innovative products that meet the ever-changing demands of consumers.14

International Financial Reporting Standards (IFRS) (***):
IFRS 17 Insurance Contracts
Publication Date: June 1st 2017
Risks Covered: Compliance Risk, Operational Risk
Business Processes Impacted: Audit, Legal and Compliance, Reporting
The International Accounting Standards Board (IASB) regularly publishes implementation documents to support companies in their understanding and assessment of the new IFRS 17 standard, which goes into application in 2021 for the accounting of insurance contracts.15

FORTHCOMING REGULATIONS:

European Commission (EC)
Commission Implementing Regulation (EU) 2017/954 of 6 June 2017 on the extension of the transitional periods related to own funds requirements for exposures to central counterparties set out in Regulations (EU) No 575/2013 and (EU) No 648/2012 of the European Parliament and of the Council
The Commission has adopted the extension of the transitional periods related to own funds requirements for exposures to central counterparties set out in Regulations (EU) No 575/2013 and (EU) No 648/2012 of the European Parliament and of the Council. The effect of the Regulation is to extend until December 15, 2017. This Regulation goes into force on June 10, 2017.16

European Commission (EC)
Regulation (EU) 2017/1131 of the European Parliament and of the Council of 14 June 2017 on money market funds
The Official Journal of the European Union has published a regulation on money market funds (MMFs). This regulation applies as of July 21, 2018, with the exception of Article 11(4), Article 15(7), Article 22 and Article 37(4) which shall apply from July 20, 2017.17

Financial Accounting Standard Board (FASB)
FASB Proposes Improvements to Consolidation Guidance
Based on the recommendations from the Private Company Council, the board has issued a proposed Accounting Standard Update (ASU) intended to reduce the cost and complexity of financial reporting associated with consolidation of variable interest entities (VIEs).18

European Commission (EC)
Commission delegated regulation concerning the calculation of regulatory capital requirements for certain categories of assets held by insurance and reinsurance undertakings (infrastructure corporates)
The European Commission has published a delegated regulation amending Delegated Regulation (EU) 2015/35 concerning the calculation of regulatory capital requirements for certain categories of assets held by insurance and reinsurance undertakings (infrastructure corporates).19

European Insurance and Occupational Pensions Authority (EIOPA)
EIOPA invites for comments on the 2.2.0 draft version of Solvency II XBRL Taxonomy
The EIOPA has published a draft version of the Solvency II XBRL Taxonomy to be applied by insurance companies for reporting with the reference date of December 31, 2017. Comments on the draft version should be submitted by June 30, 2017.20

 

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

 

References:

1.  “Future Service Restrictions Instrument 2017,” Financial Conduct Authority, June 22, 2017. Access at: Future Service Restrictions Instrument 2017.

2.  “Trade Reporting Frequently Asked Questions,” Financial Industry Regulatory Authority, June 27, 2017. Access at: Section 300: Non-Tape (Regulatory or Clearing-Only) Reports (Updated).

3.  “Amendments to Rules Concerning Prepaid Accounts Under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z),” Consumer Financial Protection Bureau, June 29, 2017. Access at: Amendments to Rules Concerning Prepaid Accounts Under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z)

4.  “Regulation D: Reserve Requirements of Depository Institutions,” The Board of Governors of The Federal Reserve System, June 26, 2017. Access at: Regulation D: Reserve Requirements of Depository Institutions .

5.  “Banking Act (Chapter 19), Banking (Credit Card and Charge Card) (Amendment) Regulations 2017,” Monetary Authority of Singapore, May 30, 2017. Access at: Banking (Credit Card and Charge Card) (Amendment) Regulations 2017.

6.  “Regulations, Commission Delegated Regulation (EU) 2017/1018 of 29 June 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards specifying information to be notified by investment firms, market operators and credit institutions,” The Official Journal of the European Union, June 17, 2017. Access at: Commission Delegated Regulation (EU) 2017/1018 of 29 June 2016 Supplementing Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments with regard to Regulatory Technical Standards specifying information to be notified by investment firms, market operators and credit institutions.

7.  “Commission Implementing Regulation (EU) 2017/1093 of 20 June 2017, laying down implementing technical standards with regard to the format of position reports by investment firms and market operators,” The Official Journal of the European Union, June 21, 2017. Access at: Commission Implementing Regulation (EU) 2017/1093 of 20 June 2017 laying down implementing technical standards with regard to the format of position reports by investment firms and market operators.

8.  “Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC,” The Official Journal of the European Union, June 30, 2017. Access at: Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC.

9.  “Code of Practice and supervisory statement relating to governance of recognised payment system operators,” Policy Statement, Bank of England, June 30, 2017. Access at: Code of Practice and supervisory statement relating to governance of recognised payment system operators.

10. “FASB Votes to Proceed with Final Standard on Hedging,” Financial Accounting Standards Board, June 7, 2017. Access at: FASB votes to proceed with Final Standard on Hedging.

11. “NBB Insurance Stress Test 2017,” National Bank of Belgium, July 3, 2017. Access at: NBB Insurance Stress Test 2017.

12. “PRIIPs information exchange templates,” Insurance Europe, June 30, 2017. Access at: PRIIPs information exchange templates.

13. “Financial Stability Implications from FinTech, Supervisory and Regulatory Issues that Merit Authorities’ Attention,” Financial Stability Board, June 27, 2017. Access at: FSB issues a report on the financial stability implications from FinTech.

14. “EU insurance rules must be digital-friendly to reflect consumers’ needs,” Insurance Europe, June 1, 2017. Access at: EU insurance rules must be digital-friendly to reflect consumers’ needs.

15. “IFRS 17 Insurance Contracts,” International Financial Reporting Standards, June 1, 2017. Access at: IFRS 17 Insurance Contracts.

16. “Commission Implementing Regulation (EU) 2017/954 of 6 June 2017 on the extension of the transitional periods related to own funds requirements for exposures to central counterparties set out in Regulations (EU) No 575/2013 and (EU) No 648/2012 of the European Parliament and of the Council,” The Official Journal of the European Union, June 7, 2017. Access at: Commission Implementing Regulation (EU) 2017/954 of 6 June 2017 on the extension of the transitional periods related to own funds requirements for exposures to central counterparties set out in Regulations (EU) No 575/2013 and (EU) No 648/2012 of the European Parliament and of the Council.

17. “Regulation (EU) 2017/1131 of the European Parliament and of the Council of 14 June 2017 on money market funds,” The Official Journal of the European Union, June 30, 2017. Access at: Regulation (EU) 2017/1131 of the European Parliament and of the Council of 14 June 2017 on money market funds.

18. “FASB Proposes Improvements to Consolidation Guidance,” Financial Accounting Standard Board, June 22, 2017. Access at: FASB Proposes Improvements to Consolidation Guidance.

19. “Commission delegated regulation concerning the calculation of regulatory capital requirements for certain categories of assets held by insurance and reinsurance undertakings (infrastructure corporates),” European Commission, June 8, 2017. Access at: Commission delegated regulation concerning the calculation of regulatory capital requirements for certain categories of assets held by insurance and reinsurance undertakings (infrastructure corporates).

20. “EIOPA invites for comments on the 2.2.0 draft version of Solvency II XBRL Taxonomy,” European Insurance and Occupational Pensions Authority, June 7, 2017. Access at: EIOPA invites for comments on the 2.2.0 draft version of Solvency II XBRL Taxonomy.

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.

 

About Accenture:

Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions—underpinned by the world’s largest delivery network—Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With more than 373,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Its home page is www.accenture.com.

 

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