Greg Kilminster
Head of Product - Content
Enforcement
Following the huge enforcement actions that occurred in September, it was always likely that activity in October would be less eye-catching, but nevertheless several significant enforcements were announced and - somewhat unusually – much of it was in the UK.
At the beginning of the month the FCA fined Starling Bank £28.96 million for significant failures in its anti-money laundering (AML) and financial sanctions controls and a week later fined TSB Bank £10.9 million fine for failing to adequately handle customers experiencing financial difficulties.
On a related theme, Volkswagen Financial Services (UK) Limited (VWFS) was fined £5.4 million by the FCA for similarly failing to treat customers in financial difficulty fairly and effectively. The UK regulator’s final fine of the month came with the CEO of Wise Assets UK Ltd and Wise Payments Ltd being fined £350,000 for failing to disclose a significant tax penalty which had been imposed by HM Revenue and Customs (HMRC).
In the United States, two significant enforcements occurred. TD Bank became the largest bank in US history to plead guilty and was fined more than $3 billion by several regulators for anti-money laundering (AML) and Bank Secrecy Act (BSA) violations and Goldman Sachs and Apple Inc were charged more than $89 million by the Consumer Financial Protection Bureau (CFPB) for mishandling Apple Card customer disputes and misleading consumers about interest-free payment plans.
Also in the US, the Securities and Exchange Commission (SEC) charged Unisys, Avaya, Check Point and Mimecast with providing materially misleading disclosures about cybersecurity risks and breaches.
Finally, the Commodity Futures Trading Commission (CFTC) settled enforcement actions involving Barclays Bank PLC and two swap execution facilities (SEFs), BGC Derivative Markets, and GFI Swaps Exchange, LLC for violations of the Commodity Exchange Act (CEA) and CFTC regulations related to swap reporting.
Consultations
Turning to consultation activity, and again starting in the UK where the Prudential Regulation Authority (PRA) published three consultations during the month including CP 12/24 which sets out the PRA’s proposal to make amendments to PRA rules and expectations in respect of firms’ reporting and disclosure obligations pertaining to resolution assessments; CP 13/24 which sets out the PRA’s proposals to restate the relevant provisions in the assimilated Capital Requirements Regulation No 575/2013 in the PRA Rulebook and CP 14/24 which sets out the PRA’s proposals to implement the remaining Basel large exposures standards.
Also consulting in October was the Bank of England (BoE) on its supervisory fees and the UK government on buy now pay later regulation.
In Europe, the European Securities and Markets Authority (ESMA) issued MiFIR: Consultation On The Review of regulatory technical Standard (RTS) 22 On Transaction Data Reporting and On Order Book Data, and at the end of the month issued two further CPs to gather feedback on proposed amendments concerning the Markets in Financial Instruments Directive II (MiFID II) and the Prospectus Regulation.
European insurance and pensions regulator EIOPA issued several consultations, including one on proposed new criteria that will guide national supervisors in selecting insurers and insurance groups to undertake macroprudential analysis and one proposing EIOPA's draft technical advice regarding capital requirements for crypto assets within the European Union’s regulatory framework for insurers.
At the start of the month, EIOPA also issued a series of consultations on new regulatory and implementing technical standards as part of the ongoing Solvency II review.
Elsewhere; in Australia the Treasury department issued a discussion paper examining the implications of artificial intelligence (AI) for consumer protection; in Singapore the Monetary Authority of Singapore (MAS) launched a consultation paper proposing amendments to the capital treatment of structured products and infrastructure investments for insurers . In the United Arab Emirates the Dubai Financial Services Authority (DFSA) launched consultation CP161, Enhancing Proportionality in Prudential Regulation to gather industry feedback on proposed adjustments to its prudential framework.
At the end of October, the Financial Action Task Force (FATF) launched a public consultation on proposed changes to its Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) standards.
Policies and Procedures
Starting in the US where, on the same day, we covered the Office of the Comptroller of the Currency’s (OCC) final revisions to its recovery planning guidelines for large national banks and savings associations and the CFPB’s landmark rule designed to enhance consumers’ rights, privacy, and control over their personal financial data.
This was swiftly followed by FINRA announcing amendments to Rule 3240, which further limits the scope of permissible lending relationships and modernises the definition of “immediate family” for such exceptions.
At the end of the month the SEC confirmed amendments aimed at enhancing risk management and resilience for central clearing agencies and the US Department of the Treasury released its first National Strategy for Financial Inclusion aimed at expanding access to affordable financial services across the country.
In the UK, the Payment Systems Regulator (PSR) confirmed the new maximum reimbursement of £85,000 for victims of authorised push payment scams, which was accompanied by new proposed legislation to extend the current payment delay window by 72 hours, allowing banks more time to identify and prevent fraudulent transactions and a letter from the FCA to payment services providers to confirm their new expectations.
European regulator ESMA provided a detailed timeline for implementing several major sustainable finance regulations, aimed at enhancing transparency and promoting sustainable investment across the EU. The European Commission meanwhile adopted new cybersecurity rules for critical digital entities and networks under the NIS2 Directive. In Ireland, a new National Payments Strategy was launched.
In the EMEA region, Hong Kong’s Monetary Authority (HKMA) announced enhanced anti-fraud protections for online payment card transactions and the commencement of the Basel III final reform package and later in the month issued a revised version of its Supervisory Policy Manual (SPM) module on e-banking risk management, extending its scope to cover payment card transactions.
Finally, in Singapore, The Monetary Authority of Singapore (MAS) issued new guidance for financial institutions regarding the audit of anti-money laundering and countering the financing of terrorism (AML/CFT) policies, procedures, and controls.
Key speeches
North America
- In a speech at Harvard Law School, CFPB Director Rohit Chopra outlined growing concerns about the concentration of power within the asset management industry.
- In a speech at the 2024 SIFMA Annual Meeting, SEC Chair Gary Gensler outlined key reforms aimed at improving market efficiency, transparency, and fairness in the US equity markets.
- In a speech at the Eighth Annual Fintech Conference, Federal Reserve Governor Michelle W Bowman emphasised the critical role of regulatory engagement with financial technology and innovation.
- In a speech at the CFA Institute’s Systemic Risk Council, Acting Comptroller of the Currency Michael J Hsu explored the intricate balance regulators must strike between decisive action and cautious analysis in managing systemic risks.
- In a speech at the ISDA Annual Legal Forum, Commissioner Summer K Mersinger of the US Commodity Futures Trading Commission (CFTC) suggested reforms to the agency’s enforcement approach, stressing the need for efficiency, clarity, and proportionality.
United Kingdom
- In a speech at Digital Assets Week in London, Sasha Mills, Executive Director of Financial Market Infrastructure at the Bank of England, discussed the central bank's approach to supporting innovation in digital assets and payments while ensuring financial stability.
- In a speech at the International Capital Markets Conference, Ashley Alder, Chair of the FCA, highlighted the pressing challenges and transformative reforms aimed at strengthening the UK’s capital markets.
- In a speech at the Future Strategy for Personal Finance Professionals event, Nick Hulme, Head of Department for Advisers, Wealth and Pensions, Consumer Investments at the FCA, spoke about the regulator’s evolving approach to the personal finance sector.
- In a speech at the FCA’s 10th anniversary event for Project Innovate, Jessica Rusu, the FCA’s Chief Data, Information, and Intelligence Officer, reflected on the progress of the UK’s FinTech landscape and laid out the regulator’s forward-looking vision for innovation in financial services.
- In a speech at the City Dinner at Mansion House, Nikhil Rathi, Chief Executive of the FCA, highlighted the urgent need for growth in the financial services sector and emphasised the regulator's role in fostering capital formation and competitiveness.
- In a speech at the Investment Association Annual Dinner, Nikhil Rathi, touched on various pivotal themes shaping the UK’s financial markets, with a particular focus on motor finance and the growth of private markets.
Europe
- In a speech at the Compliance Institute’s Annual Conference, Gerry Cross, Director of Financial Regulation - Policy and Risk at the Central Bank of Ireland, outlined the regulator’s evolving approach to financial supervision and regulation.
- In a speech at the Institute of Directors Chartered Director Programme Graduation, Sharon Donnery, Deputy Governor of the Central Bank of Ireland, emphasised the growing challenges and responsibilities facing company boards today.
- In a speech at the S&P European Financial Institutions Conference, Elizabeth McCaul, a Member of the Supervisory Board of the European Central Bank (ECB), emphasised the importance of maintaining comprehensive vision in banking supervision.
- In a speech at the International Investment Funds Association Conference, Deputy Governor of the Central Bank of Ireland, Derville Rowland, discussed the evolving landscape of retail investments and emphasised the need for a strengthened focus on investor protection, especially as digitisation reshapes the market.
- In a speech at the Central Bank’s offices in Dublin, Derville Rowland launched Ireland’s National Payments Strategy, laying out a comprehensive roadmap for the future of the country’s payments ecosystem.
- In a speech at the “EU banking regulation at a turning point” conference, Elizabeth McCaul addressed the evolving nature of banking regulation within the EU.
APAC
- In a speech at Maurice Blackburn Lawyers, Stephen Jones, Australia’s Assistant Treasurer and Minister for Financial Services, outlined a new legislative framework aimed at bolstering the nation’s defences against scams.
- In a speech at the ICA Conference 2024, APRA Executive Board Member Suzanne Smith highlighted the urgent need for the insurance sector to strengthen its core operations and tackle affordability challenges to address rising climate risks and prepare for new regulatory requirements.
- In a speech at the Hong Kong FinTech Week 2024, Dr Eric Yip, Executive Director of Intermediaries at the Securities and Futures Commission (SFC), spoke about the critical importance of regulating virtual assets in the evolving financial landscape.
- In a speech at Hong Kong FinTech Week 2024, Eddie Yue, Chief Executive of the Hong Kong Monetary Authority (HKMA), outlined Hong Kong’s progress in fintech innovation while pointing to the critical juncture where the financial technology sector now finds itself.
- In a wide-ranging speech at the Australian Financial Review summit, Gina Cass-Gottlieb, Chair of the Australian Competition and Consumer Commission (ACCC), highlighted the organisation’s strategic approach to evolving issues in the financial services sector.