Edition Highlights:

  • The Consumer Financial Protection Bureau amends Regulation B (Equal Credit Opportunity Act Ethnicity) and the Race Information Collection.
  • The Financial Conduct Authority issued a policy statement on the implementation of the Markets in Financial Instruments Directive II.
  • The Securities and Exchange Commission is adopting an amendment to the Settlement Cycle Rule.

Current coverage period: Through March 31, 2017

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

Consumer Financial Protection Bureau (CFPB) (* ):
Prepaid Accounts Under the Electronic Fund Transfer Act (Regulation E)  and the Truth in Lending Act (Regulation Z); Delay of Effective Date
Publication Date: March 15th 2017

Risks Covered: Compliance Risk

Business Processes Impacted: Audit, Legal and Compliance

This document proposes to delay the October 1, 2017 effective date of the rule governing Prepaid Accounts Under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z) by six months, to April 1, 2018.1

Consumer Financial Protection Bureau (CFPB) (***):
Amendments to Equal Credit Opportunity Act (Regulation B) Ethnicity and Race Information Collection
Publication Date: March 24th 2017

Risks Covered: Conduct Risk

Business Processes Impacted: Audit, Legal and Compliance, Consumer/Investor Protection, Data Privacy
The regulation proposes amendments to Regulation B. These will permit creditors additional flexibility in complying with Regulation B, and this in order to facilitate compliance with Regulation C, add certain model forms and remove others from Regulation B, and make various other amendments to Regulation B and its commentary to facilitate the collection and retention of information about the ethnicity, sex, and race of certain mortgage applicants.2

European Banking Authority (EBA (**):
Mapping the Interconnectedness Between EU banks and Shadow Banking Entities
Publication Date: March 17, 2017

Risks Covered: Sovereign Risk; Systemic Risk

Business Processes Impacted: Risk Management and Stress Testing
This working paper provides a snapshot of the exposures of European Union banks to shadow banking entities within the global financial system. It also documents the cross-sector and cross-border linkages and considers which are the most relevant for systemic risk monitoring.3

European Commission (EC) (***):

Commission Delegated Regulation (EU) 2017/587 of 14 July 2016 Supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council on Markets in Financial Instruments with Regard to Regulatory Technical Standards on Transparency Requirements for Trading Venues and Investment Firms in Respect of Shares, Depositary Receipts, Exchange-Traded Funds, Certificates and Other Similar Financial Instruments and on Transaction Execution Obligations in Respect of Certain Shares on a Trading Venue or by a Systematic Internaliser
Publication Date: March 31st 2017

Risks Covered: Market Risk

Business Processes Impacted: Clearing & Settlement – Exchange Traded and Over-the-Counter (OTC)
This Delegated Regulation supplements Markets in Financial Instruments Regulation (MiFIR) regarding regulatory technical standards on transparency requirements for trading venues and investment firms in respect of shares, depositary receipts, exchange-traded funds, certificates and other similar financial instruments and on transaction execution obligations in respect of certain shares on a trading venue or by a systematic internaliser.4

European Commission (EC) (**):
Commission Delegated Regulation (EU) 2017/590 of 28 July 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
Publication Date: March 31st 2017

Risks Covered: Operational Risk

Business Processes Impacted: Reporting
This Delegated Regulation (EU) 2017/590 supplements Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to regulatory technical standards for reporting transactions to competent authorities.5

Financial Conduct Authority (FCA) (***):
Markets in Financial Instruments Directive II Implementation – Policy Statement I
Publication Date: March 31st 2017
Risks Covered: Operational Risk; Market Risk; Compliance Risk

Business Processes Impacted: Audit, Legal and Compliance; Consumer/Investor Protection; Reporting
This policy statement, on Markets in Financial Instruments Directive II implementation, addresses the main issues arising from several earlier Consultation Papers and includes rules on certain aspects of the fees regime and near-final rules for other areas of the FCA Handbook.6

Securities and Exchange Commission (SEC) (***):
Securities Transaction Settlement Cycle
Publication Date: March 22nd 2017
Risks Covered: Market Risk

Business Processes Impacted: Trading; Brokerage Services
This amendment to the Settlement Cycle Rule (Rule 15c6-1(a)) under the Securities Exchange Act of 1934 shortens the standard settlement cycle for most broker-dealer transactions from three business days after the trade date (“T+3”) to two business days after the trade date (“T+2”).7

Department of the Treasury (US) (***):
Qualified Financial Contracts Recordkeeping Related to Orderly Liquidation Authority
Publication Date: March 30th 2017
Risks Covered: Operational Risk

Business Processes Impacted: Reporting
This final rule, in consultation with the Federal Deposit Insurance Corporation (FDIC), implements the qualified financial contract recordkeeping requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and provides how records entities and top-tier financial companies may submit the required point of contact information.8

European Securities and Markets Authority  (ESMA) (***):
ESMA Sees High Market and Valuation Risk amid Substantial Political and Policy Uncertainty
Publication Date: March 20th 2017
Risks Covered: Operational Risk
Business Processes Impacted: Risk Management and Stress Testing
This report on trends, risks and vulnerabilities identifies political and policy uncertainty as the main risks drivers for 2017. In addition, the findings indicate very high risk in securities markets, with elevated risk for investors, infrastructures and services.9

International Accounting Standards Board (IASB) ():
Improvements to IFRS 8 Operating Segments Proposed Amendments to IFRS 8 and IAS 34
Publication Date: March 29th 2017
Risks Covered: Compliance Risk
Business Processes Impacted: Reporting; Audit, Legal and Compliance
This document proposes improvements to (International Financial Reporting Standards) IFRS 8 Operating Segments, which sets out the disclosure requirements for information about a company’s operating segments, products and services, the geographical areas in which it operates, and its major customers, and (International Accounting Standard) IAS 34.10

 

FORTHCOMING REGULATIONS:

The Board of Governors of the Federal Reserve System (The Fed)
Banking Agencies Issue Joint Report to Congress under the Economic Growth and Regulatory Paperwork Reduction Act of 1996
The joint report to Congress details agencies’ review of rules affecting financial institutions, focusing on smaller institutions, such as community banks and savings associations. It also describes several joint actions planned or taken by the federal financial institutions regulators.11

Financial Crimes Enforcement Network (FinCEN)
Proposed Renewal Without Change; Comment Request; Anti-Money Laundering Programs; Due Diligence Programs for Correspondent Accounts for Foreign Financial Institutions
This document proposes to renew without change the regulation that requires covered financial institutions to establish due diligence and, in some circumstances, enhanced due diligence policies, procedures, and controls reasonably designed to detect and report money laundering through correspondent accounts that covered US financial institutions establish or maintain, for certain foreign financial institutions.12

International Accounting Standards Board (IASB)
Disclosure Initiative—Principles of Disclosure
This discussion paper proposes to amend the general disclosure requirements standards for developing clear principles governing what, how and where information should be disclosed in the financial statements, and to improve the information provided to users of financial statements.13

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

 

References:

1. “Prepaid Accounts Under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z); Delay of Effective Date,” Bureau of Consumer Financial Protection, March 15, 2017. Access at: Prepaid Accounts Under the Electronic Fund Transfer Act (Regulation E)  and the Truth in Lending Act (Regulation Z); Delay of Effective Date

2. “Amendments to Equal Credit Opportunity Act (Regulation B) Ethnicity and Race Information Collection,” Consumer Financial Protection Bureau (CFPB), March 24, 2017. Access at: Amendments to Equal Credit Opportunity Act (Regulation B) Ethnicity and Race Information Collection

3. “Mapping the interconnectedness between EU banks and shadow banking entities,” European Banking Authority, Working Paper, March 17, 2017. Access at: Mapping the Interconnectedness Between EU banks and Shadow Banking Entities

4. Delegated Regulation supplements MiFIR with regards to regulatory technical standards on transparency requirements for trading venues and investment firms in respect of shares, depositary receipts, Official Journal of the European Union, March 31, 2017. Access at: Commission Delegated Regulation (EU) 2017/587 of 14 July 2016 Supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council on Markets in Financial Instruments with Regard to Regulatory Technical Standards on Transparency Requirements for Trading Venues and Investment Firms in Respect of Shares, Depositary Receipts, Exchange-Traded Funds, Certificates and Other Similar Financial Instruments and on Transaction Execution Obligations in Respect of Certain Shares on a Trading Venue or by a Systematic Internaliser

5. Delegated Regulation (EU) 2017/590 supplements Regulation (EU) No 600/2014 the European Parliament and of the Council with regards to regulatory technical standards for the reporting of transactions to competent authorities, Official Journal of the European Union, March 31, 2017. Access at:  Commission Delegated Regulation (EU) 2017/590 of 28 July 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

6. “Markets in Financial Instruments Directive II Implementation – Policy Statement I,” Financial Conduct Authority, March 31, 2017. Access at: Markets in Financial Instruments Directive II Implementation – Policy Statement I

7. “Securities Transaction Settlement Cycle,” Securities and Exchange Commission, March 22, 2017. Access at: Securities Transaction Settlement Cycle

8. “Qualified Financial Contracts Recordkeeping Related to Orderly Liquidation Authority,” Department of the Treasury (US), March 30, 2017. Access at: Qualified Financial Contracts Recordkeeping Related to Orderly Liquidation Authority

9. “ESMA sees high market and valuation risk amid substantial political and policy uncertainty,” European Securities and Markets Authority, March 20, 2017. Access at: ESMA Sees High Market and Valuation Risk amid Substantial Political and Policy Uncertainty

10.“Improvements to IFRS 8 Operating Segments, Proposed amendments to IFRS 8 and IAS 34,” International Accounting Standards Board and International Financial Reporting Standards, March 29, 2017. Access at: Improvements to IFRS 8 Operating Segments Proposed Amendments to IFRS 8 and IAS 34

11.“Banking agencies issue joint report to Congress under the Economic Growth and Regulatory Paperwork Reduction Act of 1996,” The Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, March 21, 2017. Access at: Banking Agencies Issue Joint Report to Congress under the Economic Growth and Regulatory Paperwork Reduction Act of 1996

12.“Proposed Renewal Without Change; Comment Request; Anti-Money Laundering Programs; Due Diligence Programs for Correspondent Accounts for Foreign Financial Institutions,” Financial Crimes Enforcement Network, March 30, 2017. Access at: Proposed Renewal Without Change; Comment Request; Anti-Money Laundering Programs; Due Diligence Programs for Correspondent Accounts for Foreign Financial Institutions

13.“Disclosure Initiative—Principles of Disclosure,” International Accounting Standards Board and International Financial Reporting Standards March 7, 2017. Access at: Disclosure Initiative—Principles of Disclosure

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.

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