December's regulatory highlights

Welcome back to this edition of RegFocus!

Your trusted source for the latest regulatory updates across the world.

In this edition, we cover updates from:

• European Banking Authority (EBA)
• European Securities and Markets Authority (ESMA)
• Bank of England (BoE)
• Federal Reserve (Fed)
• Securities and Exchange Commission (SEC)

Stay informed with the latest regulatory insights shaping the financial sector. Read on for detailed updates!

European Banking Authority (EBA)

• Crypto-asset classification guidelines The ESAs have issued joint guidelines under MiCAR to standardize how crypto-assets are classified. This aims to enhance investor protection and reduce regulatory arbitrage.
• Internal ratings based approach updates The EBA is consulting on refining standards for assessing material model changes under CRR3 to enhance supervisory processes.
• Market and counterparty risk RTS final draft New standards for identifying long and short positions and main risk drivers under market risk regulations.
• AML/CFT compliance for CASPs Proposed guidelines for crypto-asset service providers to establish central contact points to address money laundering and terrorism financing risks.

European Securities and Markets Authority (ESMA)

• T+1 settlement transition proposal By October 2027, the EU aims to implement a T+1 settlement cycle to improve market efficiency and global alignment.
• Open-ended loan AIFs ESMA is consulting on technical standards for open-ended loan-originating alternative investment funds to enhance risk management.

Bank of England (BoE)

• 2025 reporting schedule released The BoE has published its reporting timetable for statistical returns in 2025.
• Country classification updates Starting June 2025, the BoE will align its statistical publication classifications with BIS standards for better comparability.
• Liquidity reporting for life insurers A new consultation focuses on closing gaps in liquidity risk reporting for large life insurers, drawing on lessons from past crises.

Federal Reserve (Fed)

• Clarification on account access guidelines The Fed confirms that guidelines for account access apply to excess balance accounts, ensuring risk-based transparency.
• Focus on elder financial exploitation Agencies revealed $27 billion in suspicious activity related to elder exploitation and provided prevention guidance for financial institutions.
• Reducing regulatory burden The Fed and other agencies are seeking public feedback to streamline regulations and reduce unnecessary requirements.

Securities and Exchange Commission (SEC)

• Investor fraud and behavior report The SEC’s 2024 report highlights the rise in investment fraud and efforts to combat it through interagency collaboration.
• Mandatory arbitration and retail investor protections Upcoming discussions on arbitration clauses in adviser agreements and alternative asset risks for retail investors.

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