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

Current coverage period: Through September 30, 2018

CURRENT REGULATIONS:

European Commission (EC):
Commission Delegated Regulation (EU) 2018/1229 of 25 May 2018 supplementing Regulation (EU) No 909/2014 of the European Parliament and of the Council with regard to regulatory technical standards on settlement discipline
Publication Date: September 13th 2018

Risks Covered: Liquidity Risk

Business Processes Impacted: Funding & Liquidity Management

The provisions in this regulation deal with measures to prevent and address settlement fails and to promote settlement discipline.1

Consumer Financial Protection Bureau (CFPB):

Disclosure of Records and Information
Publication Date: September 12th 2018

Risks Covered: Compliance Risk

Business Processes Impacted: Reporting
The agency has issued a final rule that amends the procedures used by the public to obtain information from the CFPB under the Freedom of Information Act, the Privacy Act of 1974, and in legal proceedings. This final rule is effective October 12, 2018.2

The Board of Governors of the Federal Reserve System (The Fed):
Federal Reserve Board approves final amendments to liability provisions of Regulation CC
Publication Date: September 12th 2018
Risks Covered: Operational Risk

Business Processes Impacted: Funding & Liquidity Management
The agency has approved final amendments to the liability provisions of Regulation CC, which governs availability of funds and collection of checks.3

European Banking Authority (EBA):
EBA industry Round Table: Regulatory Sandboxes and Innovation Hubs
Publication Date: September 3rd 2018
Risks Covered: Compliance Risk

Business Processes Impacted: Reporting
The agency has released the text of a presentation delivered at its industry round-table on regulatory sandboxes and innovation hubs.4

HM Treasury (HMT):
EU Exit SIs for Payment services, E-Money and the SEPA Regulation
Publication Date: September 5th 2018
Risks Covered: Conduct Risk
Business Processes Impacted: Payments
The agency has published two statutory instruments which are to be presented to Parliament in the autumn. These make amendments to retained European Union (EU) law relating to payments and electronic money and that ensure that the regime continues to operate effectively in a UK context, once the UK leaves the EU.5

Insurance Europe (IE):
Response to EIOPA Stakeholder Survey on Insurtech
Publication Date: September 3rd 2018
Risks Covered: Operational Risk
Business Processes Impacted: Data Quality Management
The agency has published its response to the European Insurance and Occupational Pensions Authority’s (EIOPA) stakeholder survey on insurtech. This will feed into its work on mapping supervisory approaches to insurtech and identifying possible regulatory barriers to financial innovation.6

European Financial Reporting Advisory Group (EFRAG):
Letter to IASB on IFRS 17
Publication Date: September 4th 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Corporate Finance, M&A and Advisory
The agency has written to the International Accounting Standards Board to highlight certain aspects of the International Financial Reporting Standards (IFRS) 17, that in EFRAG’s view merit further consideration.7

European Financial Reporting Advisory Group (EFRAG):
EFRAG Board Meeting 20 September 2018
Publication Date: September 14th 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Corporate Finance, M&A and Advisory
The agency has issued agenda papers from the International Financial Reporting Standards (IFRS) 17 board meeting, including presentations on IFRS 17 issues identified by the EFRAG Board. Also published is a report on the impact analysis of IFRS 17 in Europe.8

The International Accounting Standards Board (IASB):
Transition Resource Group for IFRS 17 Insurance Contracts
Publication Date: September 26th 2018
Risks Covered: Conduct Risk
Business Processes Impacted: Corporate Finance, M&A and Advisory
The agency has issued agenda papers concerning future International Financial Reporting Standards (IFRS) 17 Transition Resource Group meetings on different subjects like experience adjustments, discount rates and acquisition cash flows.9

European Financial Reporting Advisory Group (EFRAG):
EFRAG TEG meeting 5 September 2018
Publication Date: September 5th 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Corporate Finance, M&A and Advisory
The agency has issued agenda papers concerning future International Financial Reporting Standards (IFRS) 17 Technical Expert Group meeting, including presentations on the potential impact of IFRS 17 on the insurance market, on financial stability, on long-term investment, on costs and benefits, and on competition issues between different Generally Accepted Accounting Principles.10

European Securities and Markets Authority (ESMA):
ESMA to publish new data completeness indicators for trading venues
Publication Date: September 27th 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Data Quality Management
The agency has announced two new data completeness indicators, the Completeness Ratio and the Completeness Shortfall. These will assist trading venues in delivering complete and accurate data by providing performance information on the timeliness and completeness of their data provision.11

European Securities and Markets Authority (ESMA):
AIFMD MoUs signed by the EU Authorities
Publication Date: September 17th 2018
Risks Covered: Residual Risk
Business Processes Impacted: Funding & Liquidity Management
The agency has published the Alternative Investment Fund Managers Directive (AIFMD) Memorandum of Understandings (MoUs).12

Financial Conduct Authority (FCA):
Dear CEO letter: Firms’ preparations for transition from LIBOR to risk-free rates – Insurers
Publication Date: September 19th 2018
Risks Covered: Interest Rate Risk (non-trading book)
Business Processes Impacted: Netting & Collateral Management
The agency has published a letter to the CEOs of large insurance companies and banks regarding the Financial Stability Board’s (FSB) ongoing global benchmark reform effort, specifically the transition from LIBOR to alternative rates.13

Consumer Financial Protection Bureau (CFPB):
Summaries of Rights Under the Fair Credit Reporting Act (Regulation V)
Publication Date: September 18th 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Consumer/Investor Protection
The agency is issuing an interim final rule to update CFPB’s model forms for the Summary of Consumer Identity Theft Rights and the Summary of Consumer Rights to incorporate a notice of rights required by a new provision of the Fair Credit Reporting Act. This interim final rule is effective as of September 21, 2018. Comments were to be received by November 19, 2018.14

Monetary Authority of Singapore (MAS):
World’s First Cross-Border, Open-Architecture Platform to Improve Financial Inclusion
Publication Date: September 17th 2018
Risks Covered: Conduct Risk
Business Processes Impacted: Business Continuity Management
The agency has issued a press release about the launch of API Exchange (APIX), an online Global FinTech Marketplace and Sandbox platform for financial institutions.15

Office of the Comptroller of the Currency (OCC):
Liquidity Coverage Ratio Rule: Treatment of Certain Municipal Obligations as High-Quality Liquid Assets: Interim Final Rule
Publication Date: September 26th 2018
Risks Covered: Liquidity Risk
Business Processes Impacted: Funding & Liquidity Management
The agency has published an interim final rule that amends the OCC’s Liquidity Coverage Ratio (LCR) rule to treat liquid and readily-marketable, investment grade municipal obligations as High-Quality Liquid Assets (HQLA).16

European Financial Reporting Advisory Group (EFRAG):
EFRAG list of identified issues regarding IFRS 17
Publication Date: September 20th 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Corporate Finance, M&A and Advisory
The agency has written to the IASB Chairman to highlight certain issues pertaining to IFRS 17.17

European Financial Reporting Advisory Group (EFRAG):
EFRAG view on IFRS 9 / IFRS 17 interactions
Publication Date: September 27th 2018
Risks Covered: Compliance Risk
Business Processes Impacted: Corporate Finance, M&A and Advisory
The purpose of this paper is to highlight the interaction of International Financial Reporting Standards (IFRS) 17 insurance contracts with IFRS 9 Financial Instrument (Part A) and IFRS 15 Revenue from Contracts with Customers (Part B).18

BaFin (German Federal Financial Supervisory Authority):
Consultation 16/2018 on the Ordinance amending Section 16 of the Solvency Regulation (SolvV)
Publication Date: September 25th 2018
Risks Covered: Conduct Risk
Business Processes Impacted: Business Continuity Management
The agency has published a consultation concerning proposed amendments to section 16 of the German Solvency Regulation (Solvabilitätsverordnung – SolvV).19

Australian Prudential Regulation Authority (APRA):
Outsourcing involving cloud computing services
Publication Date: September 24th 2018
Risks Covered: Cyber Security Risk
Business Processes Impacted: Fraud and Financial Crime
The agency has published an information paper on the use of shared computing services, such as cloud, by APRA-regulated entities.20

 

FORTHCOMING REGULATIONS:

Office of the Comptroller of the Currency (OCC)
Office of the Comptroller of the Currency Invites Comment on Proposed Rule to Enhance Business Flexibility for Federal Savings Associations
The agency invited comment on a proposed rule that would provide more business flexibility to federal savings associations.21

Office of the Comptroller of the Currency (OCC)
Reforming the Community Reinvestment Act Regulatory Framework
The agency invited comment on this advance notice of proposed rulemaking (ANPR) to solicit ideas for building a new framework to transform or modernize regulations that implement the Community Reinvestment Act of 1977 (CRA).22

Federal Deposit Insurance Corporation (FDIC)
Agencies Extend Comment Period for Proposed Rule Simplifying and Tailoring the “Volcker Rule”
The agency announced that five federal financial regulatory agencies had extended the comment period until October 17, 2018.23

International Association of Insurance Supervisors (IAIS)
Timeline of ComFrame Development and ICP Revisions
The agency published its revised timeline of ComFrame Development and Insurance Core Principles (ICP) revisions.24

Securities and Exchange Commission (SEC)
Amendment to Single Issuer Exemption for Broker-Dealers
The agency filed a proposed amendment to the exemption provisions in the broker-dealer annual reporting rule under the Securities Exchange Act of 1934. Comments were to be submitted by October 29, 2018.25

The Board of Governors of the Federal Reserve System (The Fed)
Registration of Mortgage Loan Originators
The agency is proposing to repeal its regulations that incorporated the Secure and Fair Enforcement for Mortgage Licensing Act (the S.A.F.E. Act). Comments were to be submitted by November 26, 2018.26

Financial Industry Regulatory Authority (FINRA)
Proposed Rule Change to Amend CAB Rule 331 (Anti-Money Laundering Compliance Program) to Conform to FinCEN’s Final Rule on Customer Due Diligence Requirements for Financial Institutions
The agency has filed a proposed rule change to amend the Capital Acquisition Broker (CAB) Rule 331 (Anti-Money Laundering Compliance Program). This reflects the Financial Crimes Enforcement Network’s (FinCEN) adoption of a final rule on Customer Due Diligence Requirements for Financial Institutions (CDD Rule).27

Prudential Regulation Authority (PRA)
Joining the dots – the Actuarial Function, underwriting, capital and reserving
The agency has published a letter to Chief Actuaries sharing insights focused on keeping firms’ business planning and underwriting policies realistic.28

 

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

References:

  1. “Commission Delegated Regulation (EU) 2018/1229 of 25 May 2018 supplementing Regulation (EU) No 909/2014 of the European Parliament and of the Council with regard to regulatory technical standards on settlement discipline,” Official Journal of the European Union, September 13, 2018. Access at: Commission Delegated Regulation (EU) 2018/1229 of 25 May 2018 supplementing Regulation (EU) No 909/2014 of the European Parliament and of the Council with regard to regulatory technical standards on settlement discipline.
  2. “Disclosure of Records and Information,” Consumer Financial Protection Bureau, Final rule, September 12, 2018. Access at: Disclosure of Records and Information.
  3. “Federal Reserve Board approves final amendments to liability provisions of Regulation CC,” The Board of Governors of the Federal Reserve System, Press release, September 12, 2018. Access at: Federal Reserve Board approves final amendments to liability provisions of Regulation CC.
  4. “EBA industry roundtable: regulatory sandboxes and innovation hubs,” European Banking Authority, September 3, 2018. Access at: EBA industry Round Table: Regulatory Sandboxes and Innovation Hubs. 
  1. “Draft EU Exit SIs for payment services, e-money and the SEPA Regulation,” HM Treasury, September 5, 2018. Access at: EU Exit SIs for Payment services, E-Money and the SEPA Regulation.
  2. “Insurance Europe response to EIOPA stakeholder survey on InsurTech,” Insurance Europe, September 3, 2018. Access at: Response to EIOPA Stakeholder Survey on Insurtech. 
  1. “Letter to IASB on IFRS 17,” European Financial Reporting Advisory Group, September 4, 2018. Access at: Letter to IASB on IFRS 17.
  1. “EFRAG Board Meeting 20 September 2018,” European Financial Reporting Advisory Group, September 14, 2018. Access at: EFRAG Board Meeting 20 September 2018. 
  1. “Transition Resource Group for IFRS 17 Insurance Contracts,” The International Accounting Standards Board, September 26, 2018. Access at: Transition Resource Group for IFRS 17 Insurance Contracts.
  2. “EFRAG TEG Meeting 5 September 2018,” European Financial Reporting Advisory Group, September 5, 2018. Access at: EFRAG TEG meeting 5 September 2018.
  3. “ESMA to publish new data completeness indicators for trading venues,” European Securities and Markets Authority, Press Release, September 27, 2018. Access at: ESMA to publish new data completeness indicators for trading venues.
  4. “AIFMD MOUS Signed by the EU Authorities,” European Securities and Markets Authority, September 17, 2018. Access at: AIFMD MoUs signed by the EU authorities.
  5. “Firms’ preparations for transition from LIBOR to risk-free rates,” Financial Conduct Authority, Prudential Regulation Authority, September 19, 2018. Access at: Dear CEO letter: Firms’ preparations for transition from LIBOR to risk-free rates – Insurers.
  6. “Summaries of Rights Under the Fair Credit Reporting Act (Regulation V),” Consumer Financial Protection Bureau, Interim final rule, September 18, 2018. Access at: Summaries of Rights Under the Fair Credit Reporting Act (Regulation V).
  7. “World’s First Cross-Border, Open-Architecture Platform to Improve Financial Inclusion,” Monetary Authority of Singapore, September 17, 2018. Access at: World’s First Cross-Border, Open-Architecture Platform to Improve Financial Inclusion.
  8. “Liquidity Coverage Ratio Rule: Treatment of Certain Municipal Obligations as High-Quality Liquid Assets,” Office of the Comptroller of the Currency, Bulletin 2018-32, September 26, 2018. Access at: Liquidity Coverage Ratio Rule: Treatment of Certain Municipal Obligations as High-Quality Liquid Assets: Interim Final Rule.
  9. “IFRS 17 Insurance Contracts – Issues identified by the EFRAG Board,” European Financial Reporting Advisory Group, Paper 08-01, September 20, 2018. Access at: EFRAG list of identified issues regarding IFRS 17.
  10. “IFRS 17 Insurance Contracts – Interaction with IFRS 9 and IFRS 15,” European Financial Reporting Advisory Group, Paper 07-03, September 27, 2018. Access at: EFRAG view on IFRS 9 / IFRS 17 interactions.
  11. “Funds Consultation 16/2018 of the Ordinance amending Section 16 Solvency Regulation (SolvV),” BaFin (German Federal Financial Supervisory Authority), September 25, 2018. Access at: Consultation 16/2018 on the Ordinance amending Section 16 of the Solvency Regulation (SolvV).
  12. “Outsourcing involving cloud computing services,” Australian Prudential Regulation Authority, Information Paper, September 24, 2018. Access at: Outsourcing involving cloud computing services.
  13. “Office of the Comptroller of the Currency Invites Comment on Proposed Rule to Enhance Business Flexibility for Federal Savings Associations,” Office of the Comptroller of the Currency, press release, September 10, 2018. Access at: Office of the Comptroller of the Currency Invites Comment on Proposed Rule to Enhance Business Flexibility for Federal Savings Associations.
  14. “Reforming the Community Reinvestment Act Regulatory Framework,” Office of the Comptroller of the Currency, September 5, 2018. Access at: Reforming the Community Reinvestment Act Regulatory Framework.
  15. “Agencies Extend Comment Period for Proposed Rule Simplifying and Tailoring the “Volcker Rule”,” Federal Deposit Insurance Corporation, Press release, September 4, 2018. Access at: Agencies Extend Comment Period for Proposed Rule Simplifying and Tailoring the “Volcker Rule”.
  16. “Timeline of ComFrame Development and ICP Revisions,” International Association of Insurance Supervisors, September 10, 2018. Access at: Timeline of ComFrame Development and ICP Revisions.
  17. “Amendment to Single Issuer Exemption for Broker-Dealers,” Securities and Exchange Commission, Proposed rule, September 27, 2018. Access at: Amendment to Single Issuer Exemption for Broker-Dealers.
  18. “Registration of Mortgage Loan Originators,” The Board of Governors of the Federal Reserve System, September 25, 2018. Access at: Registration of Mortgage Loan Originators. 
  19. “Proposed Rule Change to Amend CAB Rule 331 (Anti-Money Laundering Compliance Program) to Conform to FinCEN’s Final Rule on Customer Due Diligence Requirements for Financial Institutions,” Financial Industry Regulatory Authority, SR-FINRA-2018-035, September 20, 2018. Access at: Proposed Rule Change to Amend CAB Rule 331 (Anti-Money Laundering Compliance Program) to Conform to FinCEN’s Final Rule on Customer Due Diligence Requirements for Financial Institutions. 
  20. “Joining the dots – the Actuarial Function, underwriting, capital and reserving,” Prudential Regulation Authority, September 17, 2018. Access at: Joining the dots – the Actuarial Function, underwriting, capital and reserving. 

 

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.

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