Here’s the second edition of a new Finextra long read series summarising the latest regulatory updates impacting the financial services, technology or fintech industries, and how financial market participants should mind the gap between the regulations that have not fully caught up with the pace of innovation.

Payments                

Lunar New Year in Singapore: The Monetary Authority of Singapore (MAS) is strongly encouraging the use of ‘Fit-for-Gifting’ currency notes (Fit notes) or e-hong baos this Lunar New Year, because they are more environmentally friendly and reduce carbon emissions and wastage in comparison to gifting new notes. Online pre-booking of Fit notes for DBS, OCBC and UOB customers started from 17 January 2024.   

Hong Kong Interbank Account Data: The Hong Kong Monetary Authority (HKMA) have launched a pilot for the Interbank Account Data Sharing (IADS) initiative, which allows customers to share their bank account data with other banks. This commenced on 1 January 2024 and saw participation from 28 banks.

Markets

UK Digital Securities Sandbox: The regulations for the first FMI sandbox, the Digital Securities Sandbox (DSS), have now been laid before Parliament and come into force on 8 January 2024. These regulations create the legal framework pursuant to 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) are working together to facilitate the payment of compensation in relation to financial losses suffered in the context of occupational pension schemes.

Security

AML: The European Council and European Parliament have agreed on part of an AML package that aims to protect EU citizens and the financial system against money laundering and terrorist financing. It will improve the way national systems are organised and work together and fraudsters, organised crime and terrorists will have no space left for legitimising their proceeds through the financial system.

Crypto

DeFI: The International Organization of Securities Commissions (IOSCO) have addressed market integrity and investor protection issues in decentralised finance (DeFi). The policy recommendations cover understanding DeFi arrangements and structures; achieving common standards of regulatory outcomes; identification and management of key risks; clear, accurate and comprehensive disclosures; enforcement of applicable laws; and cross-border cooperation.

CoFT in India: The Reserve Bank of India has enabled Card-on-File Tokenisation (CoFT) directly through card issuing banks and will provide cardholders with the choice of tokenising their cards for multiple merchant sites through a single process.

Sustainable

TNFD: The Taskforce on Nature-related Financial Disclosures (TNFD) has announced that 320 organisations from over 46 countries have committed to making nature-related disclosures based on the TNFD Recommendations published in September 2023.