Eva Dauberton
News Editor
ESAs consult on new MICAR Guidelines
The European Supervisory Authorities (EBA, EIOPA and ESMA) (ESAs) have issued a consultation paper on the draft Guidelines on templates for explanations and opinions, and the standardised test for the classification of cryptoassets, under Article 97(1) of Regulation (EU) 2023/1114 Markets in Cryptoassets (MiCAR).
Some context
MiCAR establishes a wide range of regulatory requirements, including authorisations, conduct of business, and prudential standards for asset-referenced tokens (ARTs) and e-money tokens (EMTs) issuers, as well as cryptoasset service providers (CASPs).
According to MiCAR, credit institutions and other entities intending to offer ARTs to the public or seek admission to trading must provide a legal opinion on the token’s classification to the competent authority, as specified in Article 17(1)(b)(ii) and Article 18(2)(e). Similarly, offerors, persons seeking admission to trading, or operators of trading platforms for a cryptoasset other than an ART or EMT are required to notify the cryptoasset white paper to the competent authority, accompanied by an explanation describing why the cryptoasset should not be considered excluded from the scope of MiCAR, or classified as an ART or EMT (Article 8(4) of MiCAR).
To ensure consistency in the information provided to competent authorities, Article 97(1) of MiCAR mandates the ESAs to develop joint Guidelines that include templates for the content and format of the legal opinion and explanation, as well as a standardised test.
Key takeaways
The draft guidelines set out:
- Templates establishing the content and form of the explanation accompanying the cryptoasset white paper referred to in Article 8(4) of MiCAR.
- Templates establishing the content and form of the legal opinion on the qualification of ARTs referred to in point (b)(ii) of Article 17(1) and point (e) of Article 18(2) of MiCAR.
- A standardised test for the classification of cryptoassets.
Next steps
The deadline for feedback is 12 October 2024.
The ESAs will hold a virtual public hearing on the consultation paper on 23 September 2024.
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ESMA updates Q&As
The European Securities and Markets Authority (ESMA) has announced that it has updated various Q&As covering the Alternative Investment Fund Managers Directive (AIFMD), the Markets in Cryptosssets Regulation (MiCA), the Markets in Financial Instruments Directive II (MiFID II) and the Undertakings for Collective Investment in Transferable Securities Directive (UCITS).
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PSR issues PS 24/3 on data reporting to Pay.UK and new guidance
The UK Payment Systems Regulator (PSR) has released a policy statement (PS) 24/3, requiring Payment Service Providers (PSPs) to report data and information to Pay.UK, The PSR has also published an updated guidance for PSPs to fulfil their obligations in publishing data on Authorised Push Payment (APP) fraud, as outlined in Specific Direction (SD) 18.
Some context
In April, the PSR sought feedback on proposals for all PSPs to report data and information to Pay. UK. This would enable effective monitoring and management of compliance with the Faster Payments Service (FPS) reimbursement rules. This publication confirms the outlined requirements.
Additionally, in March 2023, the PSR released PS23/1, which focused on tackling Authorised Push Payment (APP) scams. As part of this measure, directed PSPs are required to publish data on APP scam levels, prevention rates, and reimbursement levels. These guidelines supplement the existing requirements to support PSPs.
Key takeaways
PS 24/3: This PS confirms:
- The requirement for directed PSPs to register with Pay.UK by 20 August 2024. This is one way that PSPs will identify themselves as in-scope of the policy to Pay.UK and will help facilitate a shared directory – the FPS Reimbursement Directory.
- The data under reporting standard A that sending PSPs in-scope of the policy are required to retain and report to Pay.UK monthly in respect of transactions they have sent.
- The reasonable limits placed on Pay.UK in respect of the use and disclosure of the compliance data it receives.
- PSR approach to requiring PSPs to inform consumers of their rights under the policy.
The changes are delivered through amendments to Faster Payments APP scams legal instruments SD19 and SD20 (including the CDRS) and SR1.
Guidance: Through SD 18, PS23/1 directs 14 of the largest UK payment service providers (PSP) groups to collect and provide data to the regulator, which will cover 95% of transactions. This guidance explains the content that must be included as part of this data requirement, the format that must be used, and the timescales that must be followed.
Next steps
For the PS: Directed PSPs must register with Pay.UK by 20 August 2024. The start date for the reimbursement policy is 7 October 2024.
For the Guidance: The 14 directed groups will be required to provide the PSR with the first set of data by May 2023. The regulator then expects to publish this data in October 2023, and on a six-monthly basis thereafter. This requirement may adapt over time to reflect new changes or data that should be presented.
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FINRA issues notice on CE requirements
The Financial Industry Regulatory Authority (FINRA) has issued a notice to remind registered persons and firms about the ongoing continuing education (CE) requirements outlined in FINRA Rule 1240.
Some context
In January 2023, FINRA implemented amendments to the CE rules, including the requirement for registered persons to fulfil both the Regulatory Element and Firm Element annually.
As part of this update, FINRA has introduced a centralised content catalogue called Financial Learning Experience (FLEX). Firms now have the option to select relevant Firm Element e-learning courses from FLEX to incorporate into their written learning plans for their registered persons.
Key takeaways
In this notice, FINRA aims to provide information on the CE requirements, including:
- This year’s CE Regulatory Element training assignments and the completion deadline of 31 December 2024.
- Resources available to firms to facilitate compliance with the annual Regulatory Element requirements
- Resources to assist them in creating their CE Firm Element written training plan and locating suitable course content that meets their specific training needs.
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SEC approves amendments to MSRB Rule G-47 on time of trade disclosure
The Securities and Exchange Commission (SEC) has given its approval to the amendments made by the Municipal Securities Rulemaking Board (MSRB) to Rule G-47, which focuses on time of trade disclosure. These amendments introduce new disclosure scenarios, make technical edits to the rule, and incorporate certain interpretive guidance into the rule while retiring others.
Some context
Under MSRB Rule G-47, dealers are required to disclose all material information about a municipal security to customers, either orally or in writing, before or at the time of the trade. Supplementary Material .03 of MSRB Rule G-47 provides examples of material information in specific situations that require disclosure at the time of the trade.
Key takeaways
The amendments include the following changes:
- Section (a) of MSRB Rule G-47 now clarifies that dealers are not obligated to disclose material information that would violate insider trading rules or procedures.
- The definition of material information in subsection (b) (ii) of MSRB Rule G-47 has been amended and simplified, with a corresponding amendment made to Supplementary Material .01(a).
- Existing interpretive guidance on market discount, zero coupon or stepped coupon securities, and factor bonds has been codified into Supplementary Material .03.
- A clarifying example of factor bonds, which prepay principal, has been added to Supplementary Material .03(i).
- Three new disclosure scenarios have been introduced in Supplementary Material .03.12.
- Interpretive guidance on conversion costs and secondary market insurance has been retired, and existing inter-dealer time of trade disclosure guidance has been consolidated into a single piece of interpretive guidance.
Next steps
The compliance date for these amendments to Rule G-47 is set for 3 March 2025.
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MAS revises compliance toolkit for banks
The Monetary Authority of Singapore (MAS) has issued a revised version of its compliance toolkit for banks. This toolkit serves as a useful guide for these banks in their applications, notifications, and regulatory submissions to MAS.
Some context
In September 2023, MAS published the revised MAS Notice 637, which outlines the risk-based capital adequacy requirements for banks incorporated in Singapore. This is in line with the implementation of the final Basel III reforms. The notice covers various aspects, including the capital adequacy ratio, leverage ratio requirements, and the methodology and process for calculating these ratios. It also includes requirements for the internal capital adequacy assessment process and public disclosure obligations of locally incorporated banks regarding their capital adequacy and risk exposures.
Key takeaways
These revisions mainly focus on section (19) Capital Adequacy Reporting, aligning with MAS Notice 637. The requirements stated in the revised MAS Notice 637 are implemented in a staggered manner, with compliance with supervisory reporting requirements starting on 1 July 2024 and compliance with capital adequacy and disclosure requirements starting on 1 January 2025.
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