CUBE RegNews September 2024 summary

Greg Kilminster

Greg Kilminster

Head of Product - Content

Enforcement  

September saw a huge number of enforcements in the United States, with total fines well in excess of $700 million and with more individual fines issued from the main regulators than in the previous three months combined. 


Off-channel communications breaches continue to be an issue on which regulators are focusing and we reported on the Commodity Futures Trading Commission (CFTC) $42 million fine against Canadian Imperial Bank of Commerce and the fine issued against Piper Sandler Hedging Services LLC for similar breaches.   


Earlier in the month the Securities and Exchange Commission (SEC) joined in the act with another enforcement sweep involving off-channel communications, with penalties totalling more than $49 million. 


Other ‘bulk’ enforcements in the month included the SEC fining 23 entities and individuals for their failure to timely report information about their holdings and transactions in public company stock and fines imposed on nine registered investment advisers for breaching the SEC's Marketing Rule by disseminating misleading advertisements. 


Significant US fines elsewhere included the CFTC’s fine of $209,614,892 for Sam Ikkurty and several entities for operating a commodity pool Ponzi scheme, and a $28 million fine for TD Bank following the discovery of widespread errors in the bank’s reporting of customer information to consumer credit agencies. 


Still on Ponzi schemes, in Australia a former director was sentenced to 11 years in prison by the Supreme Court of New South Wales for his role in orchestrating one that defrauded investors of millions, and Macquarie Bank Limited was hit with a fine of almost AU$5 million for failing to prevent suspicious orders from being placed on the electricity futures market, and Vanguard Investments Australia was ordered to pay a record penalty of AU$12.9 million for greenwashing. 


Finally, in the UK, the Financial Conduct Authority (FCA) published its decision to impose a total fine of £590,544 and ban two financial advisers and two partners for "a reckless disregard for customers’ financial situation”. 



Consultations 

In the UK, the Payment Systems Regulator (PSR) released consultation paper (CP) 24/11, proposing a change to the maximum reimbursement level for authorised push payment (APP) scams. The changes were confirmed just a few weeks later.  The PSR also published CP 24/12 to gather input on the draft statement of policy outlining the PSR's approach to its cost-benefit analysis methodology.   


Later in the month the Prudential Regulation Authority (PRA) published a package of banking capital consultation papers including proposals that would significantly simplify the capital regime for Small Domestic Deposit Takers (SDDTs); streamline the Pillar 2A capital framework and capital communications process; introduce plans to restate Capital Requirements Regulation (CRR) provisions on the definition of capital into the PRA Rulebook and introduce plans to update and streamline the UK’s policy framework for capital buffers.  


The FCA published consultation paper (CP) 24/19, which includes proposals for a new regulatory reporting return for specific consumer credit firms. Later in the month came CP 24/20 which proposes changes to the safeguarding regime for payments and e-money firms. The UK Government and FCA also announced plans to reform UK retail disclosure rules and an immediate temporary exemption for investment trusts from EU law retail disclosure requirements.   


In the APAC region, the Monetary Authority of Singapore (MAS) issued a consultation paper proposing amendments to the Financial Services and Markets (Resolution of Financial Institutions) Regulations 2024 (FSM RFI Regulations) to enhance resolution powers for the insurance sector, and a further consultation paper on new guidelines for MAS Notice 134 on recovery and resolution planning. The Australian Prudential Regulation Authority (APRA) released a discussion paper on changes to the prudential framework mainly to replace Additional Tier 1 (AT1) capital with more reliable and effective forms of capital.    


The Australian Treasury meanwhile released a consultation paper seeking input on the establishment of a new 'Front Door' for major transformational investments, and the Australian Financial Complaints Authority (AFCA) consulted on a new approach document related to complaints involving non-disclosure and misrepresentation under the Insurance Contracts Act and minor amendments to the delayed insurance claims in superannuation approach document. This consultation closed at the end of September. 


 

Policies and Procedures 

Staying in the APAC region, the Hong Kong Monetary Authority (HKMA) announced the finalisation of the revised banking returns – Capital Adequacy Ratio (CAR Return), Leverage Ratio (LR Return), Liquidity Position (Liquidity Position Return), and Stable Funding Position (Stable Funding Position Return). The Australian Securities and Investments Commission (ASIC) meanwhile welcomed the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024.   

 

In the UK, the PRA published its near-final policy statement, PS9/24, on the implementation of the Basel 3.1 standards and also published two supervisory statements: 3/24 Credit risk definition of default and 4/24 Credit risk: Internal ratings based approach.  

 

Both the PSR and FCA issued their annual reports during the month and the PSR also issued PS 24/5 directing banks and other payment firms participating in CHAPS to reimburse their customers who have been victims of authorised push payment (APP) scams, and the FCA announced that the publication of the final policy statement on extending the Sustainability Disclosure Requirements (SDR) regime to portfolio management was delayed.   

 

In the US, the SEC approved the Public Company Accounting Oversight Board’s (PCAOB) new quality control (QC) standard, QC 1000, A Firm’s System of Quality Control, along with related amendments to PCAOB rules, standards and forms; the Office of the Comptroller of the Currency (OCC) issued a final rule amending its application review procedures under the Bank Merger Act (BMA). Finally, we reported on the same day that both the SEC and CFTC had approved amendments to MSRB Rule G-14 and listing of voluntary carbon credit (VCC) derivative contracts for trading respectively.



Key speeches 


North America 

 

 

United Kingdom 

 


Europe 

 


APAC