CUBE RegNews: 17th October

Greg Kilminster

Greg Kilminster

Head of Product - Content

ASIC chair outlines case for crypto regulation 


Following the announcement of a digital assets regulatory framework consultation, ASIC Chair Joe Longo has been speaking at the Australian Financial Review (AFR) Cryptocurrency Summit about the case for crypto regulation. 


At the outset Longo noted that the necessity for customers to put trust in many parties within the crypto ecosystem makes a clear case for strong regulation supported by effective enforcement, adding that “The ‘crypto winter’ that followed the collapse of Terra / Luna and FTX is good evidence of just how much trust is placed in intermediaries – and just how dangerous that can be when things go wrong.” 


Longo went on to suggest regulation is needed to set minimum standards for crypto businesses, such as governance, risk management, and market abuse. Regulation should also apply to crypto businesses that offer financial products or services. 


Crypto regulation may need to be tailored to the unique characteristics of the industry, but it should be consistent with the regulatory outcomes for investor protection and market integrity that are required in traditional financial markets. 


One of the challenges of regulating crypto is that it is a global industry. There is no internationally consistent approach to regulating crypto activities yet, but a consensus is developing through international financial regulatory bodies. It is important to ensure that domestic regulatory settings are consistent with this developing international consensus. 


Turning to the requirement for strong enforcement, Longo stressed to the audience that a shift in compliance will be needed: away from simply box-ticking to a fundamental change in the way compliance is done, creating a culture of compliance that puts the customer first always. He concluded: “ASIC will act to protect the consumer wherever possible within the powers that our regulatory framework permits. Regulation and enforcement provide certainty, and certainty promotes innovation; uncertainty holds it back.” 


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FINRA October fines summary 


FINRA has published its latest disciplinary summary for October 2023 covering a range of enforcement actions. Amongst the firms fined for violations are Goldman Sachs, Instinet, StratCap Securities and CoreCap Investments. The briefing also details the numerous individuals fined or barred by the regulator. 

 

Click here to read the full RegInsight on CUBE’s RegPlatform


HKMA reminds firms of disclosure responsibilities 


The Hong Kong Monetary Authority has written to all its authorised institutions (AIs) to remind them of the requirement to disclose in full any changes to interest rates in loan agreements without full transparency to the customer and relying on clauses embedded deep in the ‘small print’. 

Whilst the reminder is aimed at those AIs offering premium financing facilities in insurance policies, the underlying message of the letter applies to all regulated financial services firms: 


  • Full transparency and disclosure to customers of initial fees, charges, interest rates and so on should be made. 
  • Full disclosure of the building blocks that determine the ability of the AI to change rates, fees and so on should be made along with examples and scenarios. 
  • All relevant AI staff should receive training to ensure they fully understand these requirements. 


Click here to read the full RegInsight on CUBE’s RegPlatform