This newsletter summarizes recent regulatory changes impacting Banking, Capital Markets & Insurance firms.

Current coverage period: Through October 31, 2018

CURRENT REGULATIONS:

The Board of Governors of the Federal Reserve System (The Fed):
Reserve Requirements of Depository Institutions
Publication Date: October 30th 2018

Risks Covered: Liquidity Risk

Business Processes Impacted: Funding & Liquidity Management

The agency is amending Regulation D, Reserve Requirements of Depository Institutions, to reflect the annual indexing of the reserve requirement exemption amount and the low reserve tranche for 2019.1

Monetary Authority of Singapore (MAS):

Monetary Authority of Singapore (Control of Financial Institutions) Regulations 2018 (G.N. No. S 713/2018)
Publication Date: October 26th 2018

Risks Covered: Compliance Risk

Business Processes Impacted: Reporting
Regulator has issued the MAS (Control of Financial Institutions) Regulations 2018, effective October 29, 2018. The MAS (Control and Resolution of Financial Institutions) Regulations 2013 are revoked accordingly.2

Financial Conduct Authority (FCA):
Crypto asset Taskforce publishes report on UK approach to Crypto assets

Publication Date: October 29th 2018
Risks Covered: Operational Risk

Business Processes Impacted: Funding & Liquidity Management
As part of the Cryptoasset Taskforce, Her Majesty’s Treasury has published a report on the UK’s policy and regulatory approach to cryptoassets.3

Department of the Treasury (US):
Freedom of Information Act Regulations (Federal Register)

Publication Date: October 26th 2018
Risks Covered: Compliance Risk

Business Processes Impacted: Reporting
The agency is soliciting comments on the Freedom of Information Act Regulations.4

Federal Deposit Insurance Corporation (FDIC):
Cybersecurity Preparedness Resource

Publication Date: October 19th 2018
Risks Covered: Conduct Risk
Business Processes Impacted: Payments
The agency is adding to its cybersecurity awareness resources for financial institutions.5

Financial Conduct Authority (FCA):
DP18/9: Fair Pricing in Financial Services
Publication Date: October 31st 2018
Risks Covered: Operational Risk
Business Processes Impacted: Data Quality Management
The agency is launching a public debate considering the fairness of certain pricing practices in financial services.6

Financial Accounting Standards Board (FASB):
FASB improves consolidation accounting
Publication Date: October 31st 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Corporate Finance, M&A and Advisory
The agency issued an Accounting Standards Update (ASU) that reduces the cost and complexity of financial reporting associated with consolidation of variable interest entities (VIEs).7

China Insurance Regulatory Commission (CIRC):
CBIRC Notice on Matters Concerning the Provision of Special Products by Insurance Asset Management Companies
Publication Date: October 25th 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Corporate Finance, M&A and Advisory
The agency has published the “CBIRC Notice on Matters Concerning the Provision of Special Products by Insurance Asset Management Companies.” This allows insurers to invest in listed company shares and bonds to help reduce stock pledge liquidity risks.8

Prudential Regulation Authority (PRA):
Strengthening accountability: Implementing the extension of the SM&CR to insurers
Publication Date: October 18th 2018
Risks Covered: Conduct Risk
Business Processes Impacted: Corporate Finance, M&A and Advisory
The agency has published, a Policy Statement that provides feedback to responses received on Consultation Paper 18/18 “Strengthening accountability: implementing the extension of the SM&CR to insurers.”9

European Commission (EC):
Public Export Subsidies (Short-Term Export Credit Insurance) – Extension of EU Rules
Publication Date: October 17th 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Corporate Finance, M&A and Advisory
The agency has published a communication proposing to extend the European Union (EU) rules which set criteria under which EU governments can provide financial support to buyers of exports from their country, in the form of short-term credit insurance for 2 years.10

Financial Conduct Authority (FCA):
Temporary Authorisation regime for Data Reporting Services Providers (DRSPs)
Publication Date: October 10th 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Data Quality Management
The agency has announced that the Treasury’s draft of the Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 makes provision for temporary authorizations for MIFID authorized European Economic Area (EEA) data reporting services providers (DRSPs).11

Monetary Authority of Singapore (MAS):
Circular on Commencement of the Securities and Futures Amendment Act 2017
Publication Date: October 8th 2018
Risks Covered: Residual Risk
Business Processes Impacted: Clearing & Settlement – Exchange Traded & OTC
The agency has announced that the Securities and Futures (Amendment) Act 2017 will take effect on October 8, 2018. The amendments create wide-ranging enhancements to MAS’ regulation of the capital markets through greater regulatory safeguards, expansion of the scope of the Securities and Futures Act to regulate over-the-counter (OTC) derivatives trading venues and market intermediaries, as well as the introduction of a new regulatory regime for the oversight of key financial benchmarks.12

Financial Crimes Enforcement Network (FinCEN); Office of the Comptroller of the Currency (OCC); Federal Reserve; Federal Deposit Insurance Corporation (FDIC); National Credit Union Administration (NCUA):

Interagency Statement on Sharing Bank Secrecy Act Resources
Publication Date: October 3rd 2018
Risks Covered: Operational Risk
Business Processes Impacted: Business Continuity Management
The multiple agencies involved have issued a joint press release that addresses instances in which certain banks and credit unions may decide to enter into collaborative arrangements to share resources to manage their Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) obligations more efficiently and effectively.13

The Board of Governors of the Federal Reserve System (The Fed):
Regulation A: Extensions of Credit by Federal Reserve Banks
Publication Date: October 2nd 2018
Risks Covered: Credit Risk
Business Processes Impacted: Pricing & Valuation
The agency has adopted final amendments to its Regulation A to reflect the Board’s approval of an increase in the rate for primary credit at each Federal Reserve Bank.14

The Financial Accounting Standards Board (FASB):
FASB Accounting Standards Update on Insurance
Publication Date: October 9th 2018
Risks Covered: Liquidity Risk
Business Processes Impacted: Fraud and Financial Crime
The agency has announced its webcast providing an overview of the recently issued Accounting Standards Update (ASU) No. 2018-12, “Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts.”15

Insurance Europe (IE):
Position on IFRS 17
Publication Date: October 3rd 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Audit, Legal & Compliance
The agency has issued a press release in respect to maintaining effective accounting rules.16

Insurance Europe (IE):
Global insurers unite in their call for IFRS 17 improvements and a delay
Publication Date: October 17th 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Corporate Finance, M&A and Advisory
A global group of nine insurance associations has written a joint letter to Hans Hoogervorst, chair of the International Accounting Standards Board, that highlights the industry’s concerns about the International Financial Reporting Standard’s IFRS 17 for insurance contracts.17

European Parliament (EP):
European Parliament resolution on Distributed ledger technologies and blockchains: building trust with disintermediation
Publication Date: October 3rd 2018
Risks Covered: Conduct Risk
Business Processes Impacted: Recovery & Resolution planning
The regulator has passed resolution on the topical subject: “Distributed Ledger Technologies (DLT) and Blockchains: Building trust with dis-intermediation.”18

The International Accounting Standards Board (IASB):
September 2018 TRG for IFRS 17 meeting summary and podcast available
Publication Date: October 8th 2018
Risks Covered: Cyber Security Risk
Business Processes Impacted: Fraud and Financial Crime
The agency has shared a summary from the Transition Resource Group for the International Financial Reporting Standard’s IFRS 17 Insurance Contracts meeting held on September 26-27, 2018.19

 

FORTHCOMING REGULATIONS:

Office of the Superintendent of Financial Institutions (OSFI)
Proposed changes to Guideline B-12: Interest Rate Risk Management

The agency has issued proposed revisions to guideline B-12 Interest Rate Risk Management. Regulator is targeting implementation of the revised guideline for January 1, 2020. Comments on the proposed guideline were to be submitted by November 19, 2018.20

The Board of Governors of the Federal Reserve System (The Fed)
Federal Reserve Board seeks public comment on potential actions to facilitate real-time interbank settlement of faster payments

The agency has invited public comment on actions the Federal Reserve could take to support faster payments in the U.S.21

Insurance Europe (IE)
Preparing for cyber insurance

The agency has issued a report on cyber security which aims to help organizations that are considering buying cyber insurance by providing guidance on some of the important questions they face.22

European Insurance and Occupational Pensions Authority (EIOPA)
Public Forum: EU-U.S. Insurance Project

The agency has published the program for the Steering Committee of the EU-U.S. Insurance Project’s public event. The event includes discussions on key areas linked to the project initiatives addressing challenges and opportunities for the insurance sector in the European Union and the United States related to cyber security risks and the cyber insurance market, the use of big data, and intra-group transactions.23

European Banking Authority (EBA)
EBA acknowledges adoption of new resolution reporting standards by the European Commission

The regulator has issued a press release in respect of the EBA acknowledging the adoption by the European Commission of the Implementing Regulation on the procedures and standard forms and templates for the provision of information for the purposes of resolution plans for credit institutions and investment firms, repealing Regulation (EU) 2016/1066.24

Securities and Exchange Commission (SEC)
Amendment to Single Issuer Exemption for Broker-Dealers

The agency has filed a proposed amendment to the exemption provisions in the broker-dealer annual reporting rule under the Securities Exchange Act of 1934.25

HM Treasury
Draft Ring-fenced Bodies (Amendment) (EU Exit) Regulations 2018
The agency has issued guidance on the draft Ring-fenced Bodies (Amendment) (EU Exit) Regulations 2018, which sets out the proposed amendments to UK legislation related to the UK’s ring-fencing regime, to be laid under the EU (Withdrawal) Act.26

International Financial Reporting Standards (IFRS)
IASB discusses next steps in implementation support for IFRS 17

The agency has discussed feedback it has received from stakeholders about the new insurance contracts Standard, IFRS 17.27

 

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

References:

  1. “Reserve Requirements of Depository Institutions,” Board of Governors of the Federal Reserve System, Final rule, October 30, 2018. Access at: Reserve Requirements of Depository Institutions.
  2. “Monetary Authority of Singapore (Control of Financial Institutions) Regulation 2018,” No. S 713, Monetary Authority of Singapore, October 26, 2018. Access at: Monetary Authority of Singapore (Control of Financial Institutions) Regulations 2018 (G.N. No. S 713/2018).
  3. “Cryptoasset Taskforce publishes report on UK approach to cryptoassets,” Financial Conduct Authority, October 29, 2018. Access at: Crypto asset Taskforce publishes report on UK approach to Crypto assets.
  4. “Freedom of Information Act Regulations,” Proposed rule, Department of the Treasury, October 26, 2018. Access at: Freedom of Information Act Regulations (Federal Register).
  1. “Cybersecurity Preparedness Resource,” Federal Deposit Insurance Corporation, October 19, 2018. Access at: Cybersecurity Preparedness Resource.
  2. “Fair pricing in Financial Services,” Discussion paper, Financial Conduct Authority, October 31, 2018. Access at: DP18/9: Fair Pricing in Financial Services.
  1. “FASB Improves Consolidation Accounting,” News release, Financial Accounting Standards Board, October 31, 2018. Access at: FASB improves consolidation accounting.
  1. “China Banking Regulatory Commission issued “Notice on the Relevant Matters Concerning the Establishment of Special Products by Insurance Asset Management Companies,” China Insurance Regulatory Commission (CIRC), October 25, 2018. Access at: CBIRC Notice on Matters Concerning the Provision of Special Products by Insurance Asset Management Companies.
  1. “Strengthening accountability: implementing the extension of the SM&CR to insurers,” Prudential Regulation Authority, October 18, 2018. Access at: Strengthening Accountability: Implementing the Extension of the SM&CR to Insurers.
  2. “Government support for export insurance (short-term credit insurance) – extension of EU rules,” European Commission, October 17, 2018. Access at: Public Export Subsidies (Short-Term Export Credit Insurance) – Extension of EU Rules.
  3. “Brexit – Temporary authorisation regime for data reporting services providers (DRSPs),” Financial Conduct Authority, October 10, 2018. Access at: Temporary Authorisation regime for Data Reporting Services Providers (DRSPs).
  4. “MPI 01/2018 Circular on Commencement of the Securities and Futures Amendment Act 2017,” Monetary Authority of Singapore, October 8, 2018. Access at: Circular on Commencement of the Securities and Futures Amendment Act 2017.
  5. “Interagency Statement on Sharing Bank Secrecy Act Resources,” Financial Crimes Enforcement Network; Office of the Comptroller of the Currency; Federal Reserve; Federal Deposit Insurance Corporation; National Credit Union Administration, October 3, 2018. Access at: Interagency Statement on Sharing Bank Secrecy Act Resources.
  6. “Regulation A: Extensions of Credit by Federal Reserve Banks,” The Board of Governors of the Federal Reserve System, October 2, 2018. Access at: Regulation A: Extensions of Credit by Federal Reserve Banks.
  7. “FASB Accounting Standards update on insurance,” Webcast, Financial Accounting Standards Board, October 9, 2018. Access at: FASB Accounting Standards Update on Insurance.
  8. “Position on IFRS 17, Press release, Insurance Europe, October 3, 2018. Access at: Position on IFRS 17.
  9. “Global insurers unite in their call for IFRS17 improvements and a delay,” Insurance Europe, October 17, 2018. Access at: Global insurers unite in their call for IFRS 17 improvements and a delay.
  10. “European Parliament resolution of 3 October 2018 on distributed ledger technologies and blockchains: building trust with disintermediation (2017/2772(RSP)),” European Parliament, October 3, 2018. Access at: European Parliament resolution on Distributed ledger technologies and blockchains: building trust with disintermediation.
  11. “Summary of the Transition Resource Group for IFRS 17 Insurance Contracts meeting held on 26–27 September 2018,” The International Accounting Standards Board, October 8, 2018. Access at: September 2018 TRG for IFRS 17 meeting summary and podcast available.
  12. “Proposed changes to Guideline B-12: Interest Rate Risk Management,” Office of the Superintendent of Financial Institutions Canada, October 5, 2018. Access at: Proposed changes to Guideline B-12: Interest Rate Risk Management.
  13. “Federal Reserve Board seeks public comment on potential actions to facilitate real-time interbank settlement of faster payments,” The Board of Governors of the Federal Reserve System, October 3, 2018. Access at: Federal Reserve Board seeks public comment on potential actions to facilitate real-time interbank settlement of faster payments.
  14. “Preparing for cyber insurance,” Insurance Europe, October 9, 2018. Access at: Preparing for cyber insurance.
  15. “Public Forum: EU-U.S. Insurance Project,” European Insurance and Occupational Pensions Authority, October 11, 2018. Access at: Public Forum: EU-U.S. Insurance Project.
  16. “EBA acknowledges adoption of new resolution reporting standards by the European Commission,” European Banking Authority, October 29, 2018. Access at: EBA acknowledges adoption of new resolution reporting standards by the European Commission.
  17. “Amendment to Single Issuer Exemption for Broker-Dealer,” Securities and Exchange Commission, September 20, 2018. Access at: Amendment to Single Issuer Exemption for Broker-Dealers.
  1. “Ring-Fenced Bodies (Amendment) (EU Exit) Regulations 2018: explanatory information,” HM Treasury, October 22, 2018. Access at: Draft Ring-fenced Bodies (Amendment) (EU Exit) Regulations 2018.
  1. “IASB discusses next steps in implementation support for IFRS 17,” International Financial Reporting Standards, October 24, 2018. Access at: IASB discusses next steps in implementation support for IFRS 17.

 

About the Monthly Regulatory Tracker

The “Regulatory Reform” newsletter is the monthly initiative aimed at updating the Finance & Risk community with the most recent regulatory changes impacting Banking, Capital Markets & Insurance firms. We track more than 70 regulatory and industry bodies covering North America, Europe and Asia-Pacific. Every month, we will highlight approximately 20 regulations shortlisted on the basis of geography of coverage and anticipated business impacts. Our summaries will 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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