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This is the second edition of a new Finextra longread series summarizing the latest regulatory updates impacting the financial services, technology or fintech sectors, and how financial market participants should consider the he gap between regulations that have not completely caught up with the pace of innovation.
Payments
Lunar New Year in Singapore: THE Monetary Authority of Singapore (MAS) strongly encourages the use of “gift-friendly” banknotes (Fit notes) or e-hong baos for the Lunar New Year, as they are more environmentally friendly and reduce carbon emissions and waste in relation to the supply of new notes. Online pre-booking of Fit Notes for DBS, OCBC and UOB customers began on 17 January 2024.
Hong Kong Interbank Account Data: THE Hong Kong Monetary Authority (HKMA) have launched a pilot project for the Interbank Account Data Sharing (IADS) initiative, which allows customers to share their bank account data with other banks. This began on January 1, 2024 and saw the participation of 28 banks.
Markets
UK Digital Titles Sandbox: The regulations of the first FMI sandbox, the
Digital Securities Sandbox (DSS)have now been laid before Parliament and will come into force on 8 January 2024. These regulations create the legal framework under which the Bank of England and the Financial Conduct Authority will operate the DSS.
Crime
Fraud Compensation Fund: The Fraud Compensation Fund (FCF) and the Financial Services Compensation Scheme (FSCS) operate
together facilitate the payment of compensation in the event of financial losses suffered under occupational pension schemes.
Security
LBC: The European Council and the European Parliament have agreed as part of an AML package aimed at protecting EU citizens and the financial system against money laundering and terrorist financing. This will improve the way national systems are organized and work together and fraudsters, organized crime and terrorists will no longer have any opportunity to legitimize their products through the financial system.
Cryptocurrency
Challenge: The International Organization of Securities Commissions (IOSCO) addressed issues of market integrity and investor protection in decentralized finance (DeFi). Policy recommendations cover understanding DeFi arrangements and structures; achieve common standards of regulatory outcomes; identification and management of main risks; clear, precise and complete information; enforcement of applicable laws; and cross-border cooperation.
CoFT in India: The Reserve Bank of India has activated the tokenization of cards on file (CoFT) directly through card-issuing banks and will offer cardholders the choice to tokenize their cards for multiple merchant sites through a single process.
Sustainable
TNFD: The Nature-Related Financial Reporting Working Group (TNFD) announced that 320 organizations in more than 46 countries have committed to disclosing nature-related information based on the TNFD recommendations released in September 2023.