W/C 13 January - UK staking, ASIC governance, ESG roll-back(?) & President Trump's meme coin

The financial services landscape moves quickly! Legal, risk and compliance professionals need to constantly invest in their knowledge, and the weekly FS Reg Forecast helps them to do so by setting out key developments, analysis and practical documents.

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1. Digital assets / staking - the UK Government has introduced the Financial Services and Markets Act 2000 (Collective Investment Schemes) (Amendment) Order 2025 (SI 2025/17), clarifying that cryptoasset staking services are not classified as collective investment schemes (CIS). This amendment, effective from January 31, 2025, specifies that arrangements involving the pooling of customers' cryptoassets for staking purposes—where firms stake on behalf of clients, often delegating validator node operations to third parties—do not constitute a CIS. The government's stance aims to eliminate legal uncertainties, thereby facilitating the provision of staking services within the UK without subjecting them to traditional CIS regulations. However, firms must still evaluate their financial promotion obligations when offering such services, as the new order does not exempt staking from the UK's financial promotion regime.

2. ASIC governance: ASIC has announced the appointment of Scott Gregson as its new Chief Executive Officer (CEO), effective March 17, 2025. Gregson, previously the Chief Executive at the Australian Competition & Consumer Commission (ACCC), brings a lot of experience in enforcement, compliance, and digital transformation. During his tenure at the ACCC, he led initiatives to modernise regulatory frameworks and implement advanced technological tools for monitoring and enforcement. As ASIC's CEO, Gregson will oversee non-regulatory decision-making and operational performance, with a focus on enhancing ASIC's digital capabilities and technological delivery to streamline services and strengthen the organisation's oversight functions. With Sarah Court (Deputy Commissioner), it is the second high profile acquisition from the ACCC, which has a reputation as a fearless litigator in the market.

3. ADI approval: new ASIC licences are great, but new APRA licences are wonderful! APRA has granted Land Bank of Taiwan Co., Ltd a licence to operate as a foreign authorised deposit-taking institution (Foreign-ADI) under the Banking Act 1959. As one of Taiwan's largest state-owned banks, Land Bank of Taiwan specialises in corporate banking, real estate financing, and public sector loans. Its entry into the Australian market will enhance banking services for businesses operating between the two countries and diversify the financial sector. Operating under APRA's prudential standards, the bank will support trade finance and infrastructure projects. New prudential entities' entry to the Australian market is always a positive for consumers, and it has been some time since we saw the last ADI approval.

4. Trump meme coin: President-elect Trump launched the $TRUMP meme cryptocurrency on January 18, 2025, ahead of his inauguration. The token is built on the Solana blockchain, with an initial supply of 200 million coins, set to increase to 1 billion over the next three years. 80% of the initial supply is held by CIC Digital LLC, an affiliate of The Trump Organization. The coin was priced at $0.18 at launch, with its value increasing by over 300% within hours, reaching a market cap of $8 billion. President-elect Donald Trump has made several key commitments to cryptocurrency, aiming to integrate it into U.S. policy. He plans to issue an executive order designating cryptocurrency as a national priority, focusing on reducing regulatory barriers and encouraging wider adoption of digital assets. Additionally, Trump has assembled a tech policy team to focus on crypto-related initiatives, signalling his administration's intention to create a more crypto-friendly environment.

5. ESG: In the past week, several major corporations have rolled back their diversity, equity, and inclusion (DEI) policies, reflecting a significant shift in corporate America. Walmart, Meta (formerly Facebook), and McDonald's are among the companies that have discontinued various DEI initiatives, including diversity training programs and equity-focused hiring practices. This trend coincides with the re-election of President Donald Trump, who has expressed intentions to reduce corporate focus on DEI and environmental, social, and governance (ESG) concerns. Whether it is picked up in Australia remains to be seen.

Document spotlight - TMD overview: our regulatory design has shifted to give ASIC greater powers over products e.g. DDO and individuals e.g. FAR since the Royal Commission. There is now a lot of public actions on DDO, which is super helpful in crafting compliant TMDs and frameworks for monitoring distribution. We have summarised them all, so please get in touch if it is helpful!

Upcoming training - FS Reg Foundations - 4 February 2025

Governance structures: how organisations arrange themselves for decision making; key concepts; critical stakeholders e.g. board; key bodies / committees; necessary documents, and their contents e.g. delegations; presentation of information; analysing weaknesses.  

https://www.dhirubhai.net/events/fsregfoundations-governance7278964271437242369/theater/        

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