CUBE RegNews: 7th March

Greg Kilminster

Greg Kilminster

Head of Product - Content

HKMA launches Project Ensemble to support development of tokenisation market  

The Hong Kong Monetary Authority (HKMA) has announced the launch of Project Ensemble, a new wholesale central bank digital currency (wCBDC) project aimed at supporting the development of the tokenisation market in Hong Kong. Project Ensemble’s main objective is to explore innovative financial market infrastructure (FMI) that can facilitate seamless interbank settlement of tokenised money through wCBDC.   

This project forms a crucial part of the HKMA’s broader portfolio of initiatives that aim to facilitate the development of the tokenisation market. At the core of Project Ensemble is a wCBDC Sandbox that the HKMA will launch this year. The sandbox will allow further research and testing of tokenisation use cases and could potentially forge a new FMI that bridges the existing gap between tokenised real-world assets and money in transactions.  

In the announcement, Eddie Yue, Chief Executive of the HKMA, stated,“Hong Kong has always championed innovation and international collaboration. Project Ensemble will provide fresh impetus to our vibrant financial industry and reinforce our forefront position in tokenised money and assets.” 

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


FCA update on changes to high net worth exemption 

The Financial Conduct Authority (FCA) has announced that the changes to the high net worth exemption in the Financial Promotion Order 2005 (FPO) have been implemented.  

On 7th November 2023, the UK Government published changes to the FPO. The changes include adjustments to financial thresholds to account for inflation, stricter eligibility criteria to prevent the inclusion of non-qualified consumers and more robust statements that investors must complete when using the exemptions. 

In its statement, the FCA mentioned that it will continue to work with the government to strengthen the financial promotions regime in order to prevent consumer harm while ensuring access to sustainable sources of investment for growing businesses. The FCA has expressed its willingness to provide support as part of a detailed examination of the potential impact of any reversal. 

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

SEC adopts rules to enhance and standardise climate-related disclosures  

The US Securities and Exchange Commission (SEC) has adopted final rules that require registrants to disclose certain climate-related information in registration statements and annual reports. The final rules reflect the Commission’s efforts to respond to investors’ demand for more consistent, comparable, and reliable information about the financial effects of climate-related risks on a registrant’s operations and how it manages those risks while balancing concerns about mitigating the associated costs of the rules. 

Chair Gary Gensler stated prior to the rule adoption, “These final rules build on past requirements by mandating material climate risk disclosures by public companies and in public offerings. The rules will provide investors with consistent, comparable, and decision-useful information, and issuers with clear reporting requirements.” 

The SEC proposed the rules on 21 March 2022.  

Key features  

The registrant will be required to disclose the following information in a prescribed format.  

Material Impact: Companies must disclose climate-related risks that have a material impact or are likely to have a material impact on their business strategy, financial condition, or results of operations. They must also disclose the actual and potential material impacts of any climate-related risks on their business model, strategy, and outlook. 2. Mitigation: If a company has undertaken activities to mitigate or adapt to a material climate-related risk as part of its strategy, it must provide a quantitative and qualitative description of the material expenditures incurred and material impacts on financial estimates and assumptions that directly result from such mitigation or adaptation activities. The company should also disclose its activities, if any, to mitigate or adapt to a material climate-related risk, including the use of transition plans, scenario analysis, or internal carbon prices.  

Oversight: Companies must disclose any oversight by the board of directors of climate-related risks and any role played by management in assessing and managing the company’s material climate-related risks. They must also provide information about any processes the company has for identifying, assessing, and managing material climate-related risks, and, if the company is managing those risks, whether and how any such processes are integrated into the company’s overall risk management system or processes. 

Targets: Companies must provide information about their climate-related targets or goals, if any, that have materially affected or are reasonably likely to materially affect the company’s business, financial condition, or results of operations. They must also disclose material expenditures and material impacts on financial estimates and assumptions as a direct result of the target or goal or actions taken to make progress toward meeting such targets or goals. For large accelerated filers (LAFs) and accelerated filers (AFs) that are not otherwise exempted, information about material Scope 1 emissions and/or Scope 2 emissions should also be disclosed.  

Effective date 

The new rules will become effective 60 days following publication of the adopting release in the Federal Register, and compliance dates for the rules will be phased in for all companies, with the compliance date dependent on the company’s filer status. 

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

SEC adopts amendments to Rule 605 for national market system stocks 

The US Securities and Exchange Commission (SEC) has recently adopted amendments to Rule 605 under the Securities Exchange Act of 1934. These amendments require disclosures for order executions in national market system (NMS) stocks. The SEC proposed these amendments on 14 December 2022. 

Chair Gary Gensler stated prior to the rule adoption, “The final rules will increase transparency for investors and facilitate their ability to compare brokers. That helps make our markets more efficient, competitive, and fair.” 

Key changes 

The amendments expand the scope of reporting entities subject to Rule 605 to include broker-dealers who introduce or carry 100,000 or more customer accounts. They also specify that broker-dealers operating single dealer platforms must prepare a separate report for activity specific to these platforms. Furthermore, the amendments change the scope and content of the standardised monthly reports required under Rule 605. 

Specifically, the adopted rule amendments are:  

  • Expand the scope of entities subject to Rule 605, which requires market centres to make available to the public monthly execution quality reports to encompass broker-dealers with a larger number of customers.  
  • Modify the definition of “covered order” to include certain orders submitted outside of regular trading hours and certain orders submitted with stop prices.  
  • Modify the information required to be reported under the rule, including changing how orders are categorised by order size as well as how they are categorised by order type.  
  • Modify the rule to capture execution quality information for fractional share orders, odd-lot orders, and larger-sized orders. 
  • Modify reporting requirements for non-marketable limit orders (“NMLOs”) in order to capture more relevant execution quality information for these orders by requiring statistics to be reported from the time such orders become executable.  
  • Modify time-to-execution categories and require average time to execution to be measured in increments of a millisecond or finer and calculated on a share-weighted basis for all orders.  
  • Require that the time of order receipt and time of order execution be measured in increments of a millisecond or finer, and that realised spread be calculated at multiple time intervals.  
  • Enhance the accessibility of the reported execution quality statistics by requiring all reporting entities to make a summary report available.  

Effective date  

The amendments will become effective 60 days after the adopting release is published in the Federal Register. They have a compliance date of 18 months after the effective date. 

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

UK Government proposes a new platform for private securities trading 

The UK government has released a consultation that presents a proposal for the development of the Private Intermittent Securities and Capital Exchange System (PISCES), a new platform for private companies to trade their securities in a controlled environment on an intermittent basis. The consultation outlines the proposed design of its regulatory framework. 

Key features 

The regulatory framework has the following key features: 

  • PISCES will operate as a secondary market, facilitating the trading of existing shares. It will not facilitate capital raising through the issuance of new shares or the trading of other securities (e.g. bonds, exchange-traded funds).  
  • Only shares in companies whose shares are not admitted to trading on a public market in the UK or abroad can be traded on PISCES. This includes UK-based private and public limited companies (PLCs) and overseas companies. 
  • There will be restrictions on the categories of investors that can trade on PISCES. For example, most retail investors will be prohibited from trading at least during the trial phase of this platform, given the greater risks associated with buying shares that are not listed or admitted to trading on a public market.  
  • PISCES will operate intermittent trading windows (e.g. monthly, quarterly, biannually, etc.).  
  • Disclosure requirements specific to PISCES will only apply shortly before and after each trading window, and information will not be required to be disclosed to the public. Instead, information must only be available to investors who may trade during the window. There will be a market abuse regime for PISCES, which will be tailored to the intermittent nature of trading and the specific risks the model poses. 

The government intends to develop this framework through an ‘FMI sandbox’ (‘PISCES Sandbox’).  

Feedback request  

This consultation is particularly relevant to: 

  • private companies and PLCs whose shares are not listed, 
  • potential investors, 
  • potential market operators, 
  • investment firms who operate trading venues,  
  • regulated trading intermediaries, 
  • law and accountancy firms,  
  • service firms, and 
  • trade associations.


The consultation closes on 17 April 2024.

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