Edition Highlights:

  •        The Financial Stability Board details the key attributes assessment methodology for the Banking sector.
  •        The Monetary Authority of Singapore finalizes amendments to the Securities and Futures (Licensing and Conduct of Business) Regulations.
  •        The Securities and Exchange Commission effects the Financial Industry Regulatory Authority’s Capital Acquisition Broker rules.

Current coverage period: Through October 31, 2016

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

CURRENT REGULATIONS:

Financial Stability Board (FSB)(*):
Key Attributes Assessment Methodology for the Banking Sector
Publication Date: October 19th 2016

Risks Covered: Systemic Risk

Business Processes Impacted: Recovery and Resolution Planning

This sector-specific approach provides detailed guidance on the application of the Key Attributes in order to develop criteria that are better tailored to the specific features of a particular sector and thus facilitate sector-specific assessments of the Key Attributes.1

Financial Conduct Authority (FCA)(**):
Disclosure Documents (Amendment No 2) Instrument 2016
Publication Date: October 11th 2016

Risks Covered: Conduct Risk, Business Cycle Risk

Business Processes Impacted: Capital Adequacy and Capital Planning, Reporting
This instrument amends the following modules of the FCA Handbook: (i) Glossary of definitions; (ii) General Provisions (GEN); (iii) Conduct of Business sourcebook (COBS); (iv) Insurance: Conduct of Business sourcebook (ICOBS); (v) Mortgages and Home Finance: Conduct of Business sourcebook (MCOB); (iv) Collective Investment Schemes sourcebook (COLL).2

Prudential Regulation Authority (PRA)(**):
PRA Rulebook: Administration Instrument (No. 1) 2016
Publication Date: October 11th 2016

Risks Covered: Conduct Risk

Business Processes Impacted: Consumer/Investor Protection, Risk Management and Stress Testing
This instrument amends the following parts of the PRA rulebook. Large Non-Solvency II Firms – Senior Insurance Managers Regime – Applications and Notifications. Large Non-Solvency II Firms – Senior Insurance Managers Regime – Transitional Provisions. Insurance Company – Overall Resources and Valuation; (iv) Non-Solvency II Firms – Governance. Management Expenses in Respect of Relevant Schemes. Public Disclosure and Remuneration. Financial Conglomerates and Annex 2 – Capital Adequacy Calculations for Financial Conglomerates. Lloyd’s and the Glossary.3

European Commission (EC)(**):
Corrigendum to Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC
Publication Date: October 21st 2016

Risks Covered: Sovereign Risk, Conduct Risk

Business Processes Impacted: Fraud and Financial Crime, Audit, Legal and Compliance
Targeted at preventing market abuse in financial markets, the Commission has adopted a Corrigendum to Regulation (EU) No 596/2014 of the European Parliament and of the Council of April 16, 2014 on market abuse (market abuse regulation). It also addresses repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ L 173, 12.6.2014).4

Monetary Authority of Singapore (MAS)(**):
Securities and Futures (Licensing and Conduct of Business) (Amendment) Regulations 2016
Publication Date: November 1st 2016
Risks Covered: Conduct Risk, Compliance Risk

Business Processes Impacted: Clearing and Settlement – Exchange Traded and Over-the-Counter, Consumer/Investor Protection
These regulations make amendments to regulation 7 and the Third Schedule of the Securities and Futures (Licensing and Conduct of Business) Regulations.5

US Department of the Treasury(***):
Qualified Financial Contracts Recordkeeping Related to Orderly Liquidation Authority
Publication Date: October 31st 2016

Risks Covered: Conduct Risk, Operational Risk

Business Processes Impacted: Trading, Risk Management and Stress Testing
These final rules, established in consultation with the Federal Deposit Insurance Corporation (FDIC), implement the qualified financial contract (QFC) recordkeeping requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act.6

Consumer Financial Protection Bureau (CFPB)(***):
Amendments to the 2013 Mortgage Rules Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z)
Publication Date: October 19th 2016
Risks Covered: Conduct Risk, Credit Risk

Business Processes Impacted: Consumer/Investor Protection
The final rule clarifies, revises, or amends provisions regarding force-placed insurance notices, policies and procedures, early intervention, and loss mitigation requirements under Regulation X’s servicing provisions; and prompt crediting and periodic statement requirements under Regulation Z’s servicing provisions. The Bureau is also issuing an interpretive rule under the Fair Debt Collection Practices Act relating to servicers’ compliance with certain mortgage servicing rules.7

Board of Governors of the Federal Reserve System (The Fed)(***):
Reserve Requirements of Depository Institutions
Publication Date: October 27th 2016
Risks Covered: Operational Risk, Market Risk

Business Processes Impacted: Capital Adequacy and Capital Planning, Reporting
The amendments to Regulation D, Reserve Requirements of Depository Institutions, reflect the annual indexing of the reserve requirement exemption amount and the low reserve tranche for 2017.8

European Securities and Markets Authority (ESMA)(***):
Technical Reporting Instructions – MiFIR Transaction Reporting
Publication Date: October 27th 2016
Risks Covered: Market Risk, Compliance Risk

Business Processes Impacted: Trading, Reporting
The technical reporting instructions on Markets in Financial Investments Regulation (MiFIR) transaction reporting provides necessary instructions following the introduction of MiFIR. This regulation extends the transaction reporting requirements in terms of the scope of instruments used in transaction reporting as well as the scope of information that should be provided in each transaction.9

Financial Industry Regulatory Authority (FINRA)(**):
SEC Approves FINRA’s Capital Acquisition Broker (CAB) Rules
Publication Date: October 17th 2016
Risks Covered: Compliance Risk
Business Processes Impacted: Capital Adequacy and Capital Planning
These new rules, proposed by the Financial Industry Regulatory Authority (FINRA) and approved by the Securities and Exchange Commission, govern firms that meet the definition of “capital acquisition broker” (CAB) and that elect to be governed under this rule set. CABs are firms that engage in a limited range of activities, essentially advising companies and private equity funds on capital raising and corporate restructuring, and acting as placement agents for sales of unregistered securities to institutional investors under limited conditions.10

FORTHCOMING REGULATIONS:

Federal Deposit Insurance Corporation (FDIC)
Enhanced Cyber Risk Management Standards
This notice, proposed jointly with the Board of Governors of the Federal Reserve System (Board) and the Office of the Comptroller of the Currency (OCC), considers establishing enhanced cyber risk management standards for the operational resilience of large and interconnected entities under their supervision and their service providers.11

International Organisation of Securities Commissions (IOSCO)
Report on Corporate Governance
The report identifies possible measures and regulatory approaches aimed at strengthening corporate governance in emerging market jurisdictions and aligning regulatory frameworks with internationally recognized standards in this area.12

European Commission (EC)
Commission Work Programme 2017
The Work Programme for 2017 includes finding an agreement on the proposal for a common European Deposit Insurance Scheme. Review of parts of the banking legislation and proposed targeted amendments to the Capital Requirement Regulation and Directive. Strengthening existing risk-reduction measures, and accelerating the adoption of pending proposals on securitisation and prospectuses.13

 

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

References:

  1.      “Key Attributes Assessment Methodology for the Banking Sector – Methodology for assessing the implementation of the key attributes of effective resolution regimes for financial institutions in the banking sector,” Financial Stability Board, October 19, 2016. Access at:
    Key Attributes Assessment Methodology for the Banking Sector
  2.      “Disclosure documents (Amendment No 2) instrument 2016,” Financial Conduct Authority, October11, 2016. Access at:Disclosure Documents (Amendment No 2) Instrument 2016
  3.      “PRA Rulebook: Administration instrument (No. 1) 2016,” Prudential Regulation Authority, October 11, 2016. Access at:PRA Rulebook: Administration Instrument (No. 1) 2016
  1.      Corrigendum to Regulation (EU) No 596/2014 of the European Parliament and the Council of 16 April 2014 on market abuse, Official Journal of the European Union, October 21, 2016. Access at: Corrigendum to Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC
  2.      “Securities and Futures Act (Chapter 289), Securities and Futures (Licensing and Conduct of Business) (Amendment) Regulations 2016,” Monetary Authority of Singapore, November 01, 2016. Access at:Securities and Futures (Licensing and Conduct of Business) (Amendment) Regulations 2016
  3.      “Qualified Financial Contract Recordkeeping Related to Orderly Liquidation Authority,” US Department of the Treasury, Federal Register, October 31, 2016. Access at:Qualified Financial Contracts Recordkeeping Related to Orderly Liquidation Authority
  4.      “Amendments to the 2013 Mortgage Rules Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z),”Consumer Financial Protection Bureau, October 19, 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)
  5.      “Reserve Requirements of Depository Institutions”, Board of Governors of the Federal Reserve System, Final Rule. October 27, 2016. Access at:Reserve Requirements of Depository Institutions
  1.      “ESMA Provides Guidance on Transaction Reporting, Order Record Keeping and Clock Synchronisation Under MiFID II,” European Securities and Markets Authority, October 27, 2016. Access at:Technical Reporting Instructions – MiFIR Transaction Reporting
  2.   “Capital Acquisition Brokers – SEC Approves FINRA’s Capital Acquisition Broker (CAB) Rules,” Financial Industry Regulatory Authority, Regulatory Notice 16-37, October 17, 2016. Access at:SEC Approves FINRA’s Capital Acquisition Broker (CAB) Rules 
  3. “Enhanced Cyber Risk Management Standards,” Office of the Comptroller of the Currency, Federal Reserve System, Federal Deposit Insurance Corporation, Proposed Rules, October 26, 2016. Access at: Enhanced Cyber Risk Management Standards
  4.  “Report on Corporate Governance,” The Growth and Emerging Markets Committee of the International Organization of Securities Commissions, Final Report, October 2016. Access at: Report on Corporate Governance
  5.  “Commission Work Programme 2017, Delivering a Europe that protects, empowers and defends,” European Commission communication, October 25, 2016. Access at: Commission Work Programme 2017

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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