Edition Highlights:

  • The Payments Accounts Instrument 2016 details the powers and provisions exercised by the Financial Conduct Authority under Financial Services and Markets Act 2000 and Payment Accounts Regulations 2015.
  • The Securities and Exchange Commission’s final rule adopts amendments to reporting “Form ADV,” designed specifically to provide additional information regarding advisers.
  • The Monetary Authority of Singapore has announced the opening of its FinTech Innovation lab, a purpose-built facility known as Looking Glass @ MAS.

Current coverage period: Through August 31, 2016

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

 

CURRENT REGULATIONS:

European Commission (EC)(***):
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
Publication Date: August 24th 2016

Risks Covered: Compliance Risk

Business Processes Impacted: Reporting, Trading

This document provides the finalized text of the proposed Delegated Regulation supplementing Markets in Financial Investments Regulation with regards to regulatory technical standards for the reporting of transactions to competent authorities.1

 

European Banking Authority (EBA)(**):
EBA Report on the Leverage Ratio Requirements under Article 511 of the CRR
Publication Date: August 3rd 2016

Risks Covered: Systemic Risk, Counterparty Credit Risk

Business Processes Impacted: Capital Adequacy and Capital Planning, Corporate Finance, M&A and Advisory
The report on the impact assessment and calibration of the Leverage Ratio recommends the introduction of a Leverage Ratio minimum requirement in the European Union to mitigate the risk of excessive leverage.2

 

Financial Industry Regulatory Authority (FINRA)(***):
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
Publication Date: August 25th 2016

Risks Covered: Compliance Risk

Business Processes Impacted: Fraud and Financial Crime, Audit, Legal and Compliance
The order approves FINRA’s proposal to adopt FINRA Rules 2030 (Engaging in Distribution and Solicitation Activities with Government Entities) and 4580 (Books and Records Requirements for Government Distribution and Solicitation Activities). These establish “pay-to-play” and related rules would regulate the activities of member firms engaged in distribution or solicitation activities for compensation with government entities on behalf of investment advisers.3

 

Financial Conduct Authority (FCA)(***):
Payment Accounts Instrument 2016
Publication Date: August 1st 2016

Risks Covered: Operational Risk, Conduct Risk

Business Processes Impacted: Payments, Reporting
The Payments Account Instrument 2016 makes amendments to the Glossary of definitions: Insurance: Conduct of Business sourcebook (ICOBS); Banking: Conduct of Business sourcebook (BCOBS); Supervision manual (SUP); Decision Procedure and Penalties manual (DEPP); and to the Enforcement Guide (EG).4

 

Securities and Exchange Commission (SEC)(***):
Form ADV and Investment Advisers Act Rules
Publication Date: September 1st 2016
Risks Covered: Compliance Risk

Business Processes Impacted: Reporting
The final rule adopting amendments to reporting Form ADV is designed to provide additional information regarding advisers. This includes information about separately managed account businesses, and incorporates a method for private fund adviser entities operating a single advisory business to register using a single Form ADV, and making clarifying, technical and other amendments to certain Form ADV items and instructions.5

 

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: August 4th 2016

Risks Covered: Compliance Risk, Conduct Risk

Business Processes Impacted: Consumer/Investor Protection, Lending and Investment
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 the prompt crediting and periodic statement requirements under Regulation Z’s servicing provisions.6

 

Financial Industry Regulatory Authority (FINRA)(*):
FINRA Announces New Web-based System for the Collection of Short Interest Positions
Publication Date: August 19th 2016
Risks Covered: IT Risk, Compliance Risk

Business Processes Impacted: Trading, Reporting
The web-based system firms currently used to submit short interest positions will be retired to make way for a new web-based interface accessible via Firm Gateway. A test environment will be made available by FINRA to provide firms with the ability to test any program modifications necessitated by the changes.7

 

Monetary Authority of Singapore (MAS)(***):
MAS establishes FinTech Innovation Lab
Publication Date: August 24th 2016
Risks Covered: Third Party Risk/Vendor Risk, Operational Risk

Business Processes Impacted: Risk Management and Stress Testing
The new FinTech Innovation Lab is intended to: (i) allow MAS to experiment FinTech solutions with financial institutions, start-ups, and technology vendors; (ii) facilitate consultations for start-ups by industry experts on areas of interest such as legal, regulation, and business-related matters; and (iii) provide a venue for relevant training sessions and networking activities for the FinTech community.8

 

Australian Prudential Regulation Authority (APRA)(**):
APRA finalises non-capital components of the supervision of conglomerate groups
Publication Date: August 8th 2016
Risks Covered: Systemic Risk, Operational Risk

Business Processes Impacted: Capital Adequacy and Capital Planning, Risk Management and Stress Testing
This document details the final requirements for governance and risk management components of the framework for supervision of banking and insurance conglomerate groups.9

 

Board of Governors of the Federal Reserve System (The Fed)(**):
Rules of Practice for Hearings
Publication Date: August 1st 2016
Risks Covered: Compliance Risk
Business Processes Impacted: Fraud and Financial Crime, Audit, Legal and Compliance
The interim final rule proposes adjusting the maximum civil money penalties as required by law.10

 

FORTHCOMING REGULATIONS:

 

Financial Stability Board (FSB)
Progress Report on the CCP Workplan
The coordinated workplan aimed at enhancing the resilience, recovery planning and resolution of central counterparties (CCPs), and to work in close collaboration with the organizations involved. This report summarizes the progress made in implementing the work plan and sets out the timelines for expected deliverables.11

 

Office of the Comptroller of Currency (OCC)
Appraisals for Higher-Priced Mortgage Loans Exemption Threshold
The proposed rules amend the official interpretations for the regulations that implement Section 129H of the Truth in Lending Act (TILA) and which establishes special appraisal requirements for higher-risk mortgages or higher-priced mortgage loans.12

 

U.S. Commodity Futures Trading Commission (CFTC)
Whistleblower Awards Process
The proposed rules provide amendments to the Whistleblower Rules, seeking to enhance the whistleblower claims review process and also strengthen anti-retaliation authority for whistleblower protection through CFTC enforcement under the Commodity Exchange Act.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.

About Accenture:

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