CUBE RegNews May 2024 summary

Greg Kilminster

Greg Kilminster

Head of Product - Content

Enforcement  


May witnessed large fines for some key names in financial services. In Canada, Toronto-Dominion Bank was fined CA$9,185,000 for not complying with Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, followed a few days later by JP Morgan Securities Australia Limited being fined AU$775,000 for permitting suspicious client orders to be placed on the Australian futures market. 


Towards the end of the month, Citigroup Global Markets Limited was fined more than £60 million in a joint action by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority for a ‘fat finger’ incident which saw a brief but significant drop in European stock indices. 


Just two days later, we reported that two more banking giants, HSBC and JP Morgan, had been fined £6.2 million (FCA) and $200 million (Commodity Futures Trading Commission) respectively for failure to treat customers fairly and for inadequate supervision offences. 


Elsewhere, the US Securities and Exchange Commission (SEC) issued a $10 million fine to the Intercontinental Exchange, Inc (ICE) for failing to promptly report a cyber intrusion. The SEC also fined audit firm BF Borgers CPA PC $14 million for deliberate and systemic failures to comply with Public Company Accounting Oversight Board (PCAOB) standards in more than 1,500 SEC filings.  


On the same day, we reported that the Monetary Authority of Singapore (MAS) had imposed a penalty of $2.5 million on wealth management company Swiss-Asia Financial Services Pte Ltd for violating MAS’ anti-money laundering and countering the financing of terrorism requirements. Another wealth management company, Hudson Valley Wealth Management Inc, and its founder were fined more than $850,000 by the SEC for failing to disclose conflicts of interest. 


 


Consultations 


In Europe, a number of consultations were issued including the European Banking Authority’s (EBA) consultation paper (CP) on the draft regulatory technical standards (RTS) on the equivalent mechanism for unfinished property under the Capital Requirements Regulation (CRR)


Later in the month, the European Securities and Markets Authority (ESMA) published a consultation paper on non-equity trade transparency, reasonable commercial basis (RCB) and reference data under the Markets in Financial Instruments Regulation (MiFIR) review. Other consultations issued by the European regulators included ESMA’s consultation on the amendments to certain technical standards for commodity derivatives and the MiFIR Review Consultation Package


At the very start of May, the UK’s Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) released a joint consultation paper to present proposals that incorporate the modifications brought about by the Securitisation (Amendment) Regulations 2024 and the UK prudential requirements for credit institutions and investment firms. 


Still in the UK, the Payment Systems Regulator (PSR) issued two consultations: CP 24/7 APP scams data cycle 2 publication guidance which discusses the changes the PSR has made to the guidance surrounding the publication of authorised push payment (APP) scams data, and CP 24/8 on the reimbursement of victims of authorised push payment (APP) scams in the CHAPS system


Elsewhere, in the United States, the Commodity Futures Trading Commission (CFTC) issued a proposed amendment to CFTC regulation 40.11 to specify further the definitions of event contracts which could see a ban on a range of potential exchange-traded event contracts. Additionally, the Office of Foreign Assets Control (OFAC) issued an interim final rule and request for comments regarding the Reporting, Procedures and Penalties Regulations. In a separate development, the Financial Industry Regulatory Authority (FINRA) filed a proposed rule change with the SEC regarding FINRA Rule 12800 (Simplified Arbitration). Finally, several agencies issued a Notice of Proposed Rulemaking (NPR) to address incentive-based compensation arrangements. 


 

Policies and Procedures 


Starting in the APAC region, the Monetary Authority of Singapore (MAS) issued a notice regarding the submission requirements for fund data by managers of specified collective investment schemes on the same day we reported that the Hong Kong Monetary Authority (HKMA) had released its Taxonomy for Sustainable Finance to promote informed decision-making and facilitate relevant finance flows for green and sustainable finance. 

 

MAS also issued notices regarding technology risk management and cyber hygiene which became applicable during the month and the HKMA issued an updated version of the Supervisory Policy Manual (SPM) SB-1

 

Meanwhile, in the United States, the CFTC approved the adoption of final regulations aimed at enhancing large trader reporting requirements for futures and options. 

 

A number of US agencies also issued guidance to help community banks manage risks associated with third-party relationships. In the middle of May, the SEC confirmed changes to Regulation S-P, which aim to update and improve the protection of consumer financial information. 

 

The Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau (CFPB) also issued a final rule amending Regulation CC (part 229), which implements the Expedited Funds Availability Act (EFA Act). 

 

In the UK, the FCA issued a Dear CEO letter to remind firms of the closed product deadline for consumer duty obligations. The PRA also issued a Dear CEO letter regarding the findings of the PRA’s non-systemic firms’ recovery planning thematic review, which provides recommendations on both areas and includes best practice examples in the appendix. 

 

The FCA also updated the data on applications made under the Cryptoasset Anti-Money Laundering/Counter-Terrorist Financing (AML/CTF) regime

In Europe, ESMA released the final report containing Guidelines on the use of ESG or sustainability-related terms in funds’ names

 

 

Key speeches 


United States

 

 

United Kingdom 


  


Europe 


 

APAC