Edition Highlights:

  • The Prudential Regulation Authority has issued an updated version of its policy statement in accordance with section 63ZD of the Financial Services and Markets Act 2000.
  • The Commodity Futures Trading Commission is proposing amendments to certain duties pertaining to Swap Dealers.
  • The International Accounting Standards Board amends the taxonomy update for IFRS17 insurance contracts

Current coverage period: Through May 31, 2017

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

 

European Commission (EC) (**):
“Corrigendum to Commission Delegated Regulation (EU) 2017/653 of 8 March 2017 supplementing Regulation (EU) No 1286/2014 of the European Parliament and of the Council on KIDs for PRIIPS
Publication Date: May 11th 2017

Risks Covered: Operational Risk, Strategic Risk

Business Processes Impacted: Pricing & Valuation, Reporting

A corrigenda on packaged retail and insurance-based investment products (PRIIPS) was published in the Official Journal of the European Union. It lays down the regulatory technical standards (RTS) with regards to the presentation, content, review and revision of key information documents and the conditions for fulfilling the requirement to provide such documents.1

 

European Commission (EC) (***):
Regulation (EU) 2017/827 Of The European Parliament And Of The Council of 17 May 2017 amending Regulation (EU) No 258/2014 establishing a Union Programme to support specific activities in the field of financial reporting and auditing for the period of 2014-20
Publication Date: May 19th 2017

Risks Covered: Operational Risk, Strategic Risk

Business Processes Impacted: Business Continuity Management, Reporting, Audit, Legal & Compliance
The agency has issued its final rule on establishing a Union Program to support specific activities in the field of financial reporting and auditing for the period of 2014-2020.
2

 

European Commission (EC) (**):
Questions and Answers – Data protection reform package
Publication Date: May 24th, 2017

Risks Covered: Compliance Risk, Operational Risk

Business Processes Impacted: Business Continuity Management, Reporting, Audit, Legal & Compliance
The agency has published a factsheet on the General Data Protection Regulation and the Data Protection Directive for the police and criminal justice sector.3

 

Japan Financial Services Agency (JFSA) (**): 

Publication of revised draft of “Cabinet Office Ordinance on Regulation of Transactions of Securities” and “Cabinet Office Ordinance on Disclosure of Company Contents”

Publication Date: May 18th 2017
Risks Covered: Operational Risk

Business Processes Impacted: Brokerage Services, Capital Adequacy & Capital Planning
The agency has issued an updated version of the Cabinet Office Ordinance on the Regulation of Securities Transactions and the Cabinet Office Ordinance on Disclosure of Company Contents.4

 

Bank of England (BoE) (***):
CRD firms – Reporting Requirements
Publication Date: May 31st 2017

Risks Covered: Operational Risk, Strategic Risk

Business Processes Impacted: Reporting, Data Privacy, Data Quality Management
The agency has introduced new requirements for harmonizing reporting by Capital Requirements Directive (CRD) firms.5

 

Prudential Regulation Authority (PRA) (**):
Conditions, time limits and variations of approval
Publication Date: May 12th 2017
Risks Covered: Operational Risk, Strategic Risk

Business Processes Impacted: Business Continuity Management, Reporting, Audit, Legal and Compliance
The PRA has issued an updated Statement of Policy on conditions, time limits and variations of approval for banks, building societies, credit unions, and PRA-designated investment firms.
6

 

Commodity Futures Trading Commission (CFTC) (***):
Chief Compliance Officer Duties and Annual Report Requirements for Futures Commission Merchants, Swap Dealers, and Major Swap Participants; Amendments
Publication Date: May 8th 2017
Risks Covered: Operational Risk, Business Cycle Risk

Business Processes Impacted: Reporting, Data Privacy, Data Quality Management
The CFTC is proposing to amend its regulations regarding certain duties held by chief compliance officers (‘‘CCOs’’) of swap dealers, major swap participants and futures commission merchants; and certain requirements for preparing and furnishing to the Commission an annual report containing an assessment of the Registrant’s compliance activities.7

 

Board of Governors of The Federal Reserve System (The Fed) (*):
Federal Reserve Board announces final amendments to Regulation CC and Requests Public Comment on an Additional Proposed Amendment
Publication Date: May 31st 2017
Risks Covered: Compliance Risk, Cyber Security Risk, Residual Risk, Operational Risk, IT Risk, Conduct Risk

Business Processes Impacted: Fraud and Financial Crime, Information Technology, Payments, Reporting 

The Fed has issued final amendments to the check collection and return provisions of Regulation CC (Availability of Funds and Collection of Checks) and also requested further public comment on an additional proposed amendment to Regulation CC’s liability provisions.8

 

Financial Industry Regulatory Authority (FINRA) (*):
Notice of Filing of Proposed Rule Change to Eliminate Requirements That Will Be Duplicative of CAT
Publication Date: May 26th 2017
Risks Covered: Compliance Risk, Conduct Risk, Market Risk, Operational Risk, Residual Risk
Business Processes Impacted: Business Continuity Management, Reporting, Audit, Legal & Compliance
The agency is proposing to eliminate the Order Audit Trail System (“OATS”) rules in the FINRA Rule 7400 Series and to amend FINRA’s Electronic Blue Sheet (“EBS”) rules (Rules 8211 and 8213), to reflect changes to these rules once members are effectively reporting to the consolidated audit trail (“CAT”).9

 

International Accounting Standards Board (IASB) (**):
Prepayment Features with Negative Compensation
Publication Date: April 21st 2017
Risks Covered: Compliance Risk
Business Processes Impacted: Audit, Legal and Compliance, Lending and Investment, Corporate Finance, M&A and Advisory
The proposed amendments to IFRS (International Financial Reporting Standard) 9 allows for financial assets with prepayment features with negative compensation to be measured at amortized cost.10

 

FORTHCOMING REGULATIONS:

European Commission (EC)
Commission Staff Working Document Impact Assessment Accompanying the document Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 648/2012 as regards the clearing obligation, the suspension of the clearing obligation, the reporting requirements, the risk-mitigation techniques for OTC derivatives contracts not cleared by a central counterparty, the registration and supervision of trade repositories and the requirements for trade repositories
The regulator has issued a Proposal document with regards to the clearing obligation, the suspension of the clearing obligation, the reporting requirements, the risk-mitigation techniques for over-the-counter OTC derivatives contracts not cleared by a central counterparty, the registration and supervision of trade repositories and the requirements for trade repositories.11

Financial Conduct Authority (FCA)
Strategic review of retail banking business models
The FCA is conducting a strategic review of retail banking business models, a program of discovery work to examine the business models used in the retail banking sector and evaluate the impact of changes on competition and conduct.12

Financial Industry Regulatory Authority (FINRA)
Notice of Filing of a Proposed Rule Change to Amend FINRA Rule 7730 to Make Available a New End-of-Day TRACE Transaction File
The FINRA is proposing to amend FINRA Rule 7730 to make available a new End-of-Day TRACE Transaction File.13

 

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

 

 References:

1.  “Corrigendum to Commission Delegated Regulation (EU) 2017/653 of 8 March 2017 supplementing Regulation (EU) No 1286/2014 of the European Parliament and of the Council on key information documents for packaged retail and insurance-based investment products (PRIIPs)…,” Official Journal of the European Union, May 11, 2017. Access at: “Corrigendum to Commission Delegated Regulation (EU) 2017/653 of 8 March 2017 supplementing Regulation (EU) No 1286/2014 of the European Parliament and of the Council on KIDs for PRIIPS 

2.  “REGULATION (EU) 2017/827 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 17 May 2017 amending Regulation (EU) No 258/2014 establishing a Union Programme to support specific activities in the field of financial reporting and auditing for the period of 2014-20,” Offical Journal of the European Union, May 19, 2017. Access at: Regulation (EU) 2017/827 Of The European Parliament And Of The Council of 17 May 2017 amending Regulation (EU) No 258/2014 establishing a Union Programme to support specific activities in the field of financial reporting and auditing for the period of 2014-20 

3.  “Questions and Answers – Data protection reform package, European Commission, May 24, 2017. Access at: Questions and Answers – Data protection reform package 

4.  “Updates on the Regulation of Transactions of Securities and Cabinet Office Ordinance on Disclosure of Company Contents,” Japan Financial Services Agency, May 18, 2017. Access at:  Publication of revised draft of “Cabinet Office Ordinance on Regulation of Transactions of Securities” and “Cabinet Office Ordinance on Disclosure of Company Contents”

5.  “CRD Firms – Reporting Requirements,” Bank of England, May 31, 2017. Access at: CRD firms – Reporting Requirements

6.  “Conditions, time limits and variations of approval,” Statement of Policy, Prudential Regulation Authority, May 12, 2017. Access at: Conditions, time limits and variations of approval

7.  “Chief Compliance Officer Duties and Annual Report Requirements for Futures Commission Merchants, Swap Dealers, and Major Swap Participants; Amendments,” Proposed Rule, Commodity Futures Trading Commission, May 8, 2017. Access at: Chief Compliance Officer Duties and Annual Report Requirements for Futures Commission Merchants, Swap Dealers, and Major Swap Participants; Amendments

8.  “Federal Reserve Board announces final amendments to Regulation CC and requests public comment on an additional proposed amendment,” Board of Governors of The Federal Reserve System, May 31, 2017. Access at: Federal Reserve Board announces final amendments to Regulation CC and Requests Public Comment on an Additional Proposed Amendment  

9.  “Notice of Filing of Proposed Rule Change to Eliminate Requirements That Will Be Duplicative of CAT,” FINRA, May 26, 2017. Access at: Notice of Filing of Proposed Rule Change to Eliminate Requirements That Will Be Duplicative of CAT

10. “Prepayment Features with Negative Compensation (Amendments to IFRS 9),” International Accounting Standards Board meeting, IFRS, April 21, 2017. Access at: Prepayment Features with Negative Compensation            

11. “Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 648/2012 …,” European Commission, Official Journal of the European Union, May 4, 2017. Access at: Commission Staff Working Document Impact Assessment Accompanying the document Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 648/2012 as regards the clearing obligation, the suspension of the clearing obligation, the reporting requirements, the risk-mitigation techniques for OTC derivatives contracts not cleared by a central counterparty, the registration and supervision of trade repositories and the requirements for trade repositories 

12. “Strategic review of retail banking business model,” Financial Conduct Authority, May 11, 2017. Access at: Strategic review of retail banking business models

13. “Notice of Filing of a Proposed Rule Change to Amend FINRA Rule 7730 to Make Available a New End-of-Day TRACE Transaction File,” FINRA, May 30, 2017. Access at: Notice of Filing of a Proposed Rule Change to Amend FINRA Rule 7730 to Make Available a New End-of-Day TRACE Transaction File

 

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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Accenture, its logo, and High Performance Delivered are trademarks of Accenture. This document is produced by Accenture as general information on the subject. It is not intended to provide advice on your specific circumstances.

 

 

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