CUBE RegNews: 17th September

Greg Kilminster

Greg Kilminster

Head of Product - Content

HKMA and DFSA strengthen climate finance partnership with new agreement 


The Hong Kong Monetary Authority (HKMA) and the Dubai Financial Services Authority (DFSA) have signed a Memorandum of Understanding (MOU) to deepen cooperation on sustainable finance, following their inaugural Joint Climate Finance Conference. The event, held on 16 September in Hong Kong, drew 240 participants from financial institutions, industry associations, and international organisations. 


The hybrid conference, themed “Building a Net-Zero Asia – Middle East Corridor”, centred on bridging the gap in transition finance – the capital needed to shift economies towards a low-carbon future. Discussions focused on the potential for closer collaboration between Hong Kong and Dubai to support this shift, with both regions emphasising their role as leading hubs for sustainable finance in Asia and the Middle East. 


In his opening remarks, Eddie Yue, Chief Executive of the HKMA, highlighted the importance of cooperation in addressing climate change, stating, “Hong Kong and Dubai, as the key gateways between East and West, can and should do more together.” He added that the conference was the first step in establishing a strategic ‘Net-zero Asia – Middle East Corridor’, which aims to foster investment in green transitions across both regions. 


Ian Johnston, Chief Executive of the DFSA, stressed the significance of partnerships in meeting net-zero targets. He emphasised too the role of the new agreement in fostering the exchange of expertise, promoting regulatory alignment, and enhancing sustainable investment opportunities between the two regions. Johnston noted that Dubai’s Economic Agenda D33, which outlines the city’s ambitious ESG (environmental, social, and governance) goals, aligns closely with Hong Kong’s green finance agenda. 


Both authorities expressed optimism about the potential for future cooperation in addressing the global challenge of climate change. 


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US agencies extend RFI on bank-fintech arrangements deadline 

 

The Office of the Comptroller of the Currency (OCC), Treasury, the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC) (collectively, the ‘agencies’) have announced that the comment period for a request for information on bank-fintech arrangements involving banking products and services has been extended by one month. The original feedback deadline, initially set for 30 September, has now been extended to 30 October. 


Some context 

On 31 July 2024, the agencies published a request for information and comment, seeking input on the following: 

  • The nature of bank-fintech arrangements. 
  • Effective risk management practices related to these arrangements. 
  • The implications they may have (including whether there is a need for improvements to existing supervisory guidance to address any risks associated with such arrangements). 

 

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FTC to issue $2.6 M in refunds to consumers affected by FloatMe 


The US Federal Trade Commission (FTC) will be issuing over $2.6 million in refunds to consumers who were affected by the actions of online cash advance provider FloatMe. The company misled consumers with false promises of 'free money' and unfairly treated some consumers who applied for cash advances. On September 23, 2024, the FTC intends to distribute 449,344 PayPal payments totalling more than $2.6 million to individuals who paid FloatMe for immediate cash advances. 


Some context 

The FTC initially took action against FloatMe in January 2024, alleging that the company, along with its co-founders, lured consumers to its service by falsely advertising quick and free cash advances, only to fail to provide the promised advance amounts, make cancellation difficult, and discriminate against consumers receiving public assistance. FloatMe is also accused of making unfounded claims that cash advance limits would be raised by an algorithm or another automated system. 


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

 

CBI Director update on digital euro development 


Anne Marie McKiernan, Director of Financial Operations at the Central Bank of Ireland (CBI), discussed progress made on the development of a digital euro, the Central Bank Digital Currency (CBDC) for the eurozone, at the Irish Business and Employers Confederation (IBEC) digital euro roundtable event. 

 

Vision for the digital euro: privacy, security, and inclusion 

McKiernan highlighted the digital euro's role as a complementary form of payment alongside cash. She emphasised key features, including:  

  • Ensuring high standards of privacy, security, and fraud protection for the digital euro. 
  • Providing it free of charge to individuals for basic payment services. 
  • Incorporating an 'offline function' for digital proximity payments, even without an internet or network connection. 
  • Promoting financial inclusion by providing a digital means of payment even without a bank account. 

For merchants, she pointed out the digital euro's potential to address the lack of a pan-European payment solution, which currently poses frictions and costs to trade for businesses. McKiernan also mentioned the Eurosystem's consideration of implementing safeguards, such as a merchant service charge cap. 


Financial services involvement: public-private cooperation 

McKiernan shared the Eurosystem's public-private approach to the digital euro. Under this proposal, the Eurosystem will operate the payments and settlement systems, bear those costs, and provide a digital euro app to payment service providers (PSPs) for distribution. PSPs will be compensated for basic services, similar to other electronic payment instruments today. 


Progress update on a domestic and supranational level 

The Eurosystem is currently in the preparation phase, focusing on finalising the digital euro rulebook, establishing framework agreements with potential service providers, and developing the legislative framework initially proposed by the European Commission in June 2023. The ECB Governing Council will consider the decision to issue a digital euro after the European Parliament and EU Council have adopted the digital euro legal act.  


McKiernan also discussed the domestic policy implications, emphasising that Ireland's retail payments landscape lags behind other parts of Europe. The CBI has raised this as part of the consultation on the development of the National Payments Strategy (NPS) for 2024-2030 and highlighted the work needed to understand how a digital euro interacts with the broader payments landscape in Ireland. 


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MAS updates compliance toolkit for banks 


The Monetary Authority of Singapore (MAS) has recently updated the compliance toolkit for merchant banks and wholesale banks.  

The compliance toolkits aim to provide guidance to banks on:  

  • Applications requiring approval from MAS; 
  • Notifications to be submitted to MAS; and  
  • Regulatory submissions to MAS (e.g. financial returns). 


The toolkits include the common applications, notifications and submissions made to MAS applicable to both merchant and wholesale banks, but each notes that they are not exhaustive. 

 

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