CUBE RegNews:
22^nd March

ECB successfully launches new T2 wholesale payment system

The European Central Bank (ECB) and national central banks of Euro-adopted countries (the Eurosystem) have launched a new real-time gross settlement (RTGS) system and central liquidity management tool.  

The project is part of the Eurosystem’s on-going efforts to modernize market infrastructure, ensuring that it is future-proof and meets the needs and expectations of market participants, and further improving the efficiency of Europe’s financial markets. 

EBA consults on amendments to the reporting on the Fundamental Review of the Trading Book

The European Banking Authority (EBA) has published a public consultation on its draft Implementing Technical Standards (ITS) amending the ITS on specific reporting requirements on market risks (FRTB reporting), aimed at providing supervisors with the necessary tools to monitor these risks. The consultation paper also sets out ideas and some concrete, first proposals regarding amendments to Regulation (EU) 2021/451 (ITS on Supervisory Reporting), linked to the introduction of the FRTB in the EU. The most noteworthy of those proposals is a template for reporting information on reclassifications of positions between the regulatory books.

The consultation runs until 21 June 2023.   

Mairead McGuinness on open banking

European Commissioner for financial services, financial stability and Capital Markets Union, Mairead McGuinness, has spoken about the open banking revolution and implications for the financial sector. In the speech McGuinness confirmed the Commission will adopt the proposal on Open Finance before the summer and also spoke about some of the concerns around open banking including privacy, security and data protection. McGuinness also mentioned that proposals will be made to fix these concerns as part of the revision of the Payment Services Directive. 

WIlliam Birdwhistle, Director, Division of Investment Management at the SEC has highlighted three areas “worthy of our far-reaching vigilance and prompt concentration”.

In a speech at the ICI Investment Management conference, Birdwhistle noted technological developments, changing demographics and rapid growth (in both the market overall and the number and type of underlying products) as areas that the division is paying particular attention to. He spoke of a number of SEC initiatives — new rules and amendments designed to improve the management of cybersecurity risks by investment advisers and funds; the recently announced amendments to Reg S-P; amendments to the investment adviser custody rule; amendments to the requirements for annual and semi-annual shareholder reports provided by mutual funds and exchange-traded funds, and many other initiatives — which supported his three themes.

The SEC has confirmed the immediate effectiveness of a number of FINRA-proposed amendments to remove overlapping requirements concerning (i) clock synchronization for recording market events; (ii) quote and order access; (iii) reporting requirements on certain information for orders in OTC equity securities; and (iv) recording of quotation information on an inter-dealer quotation system.

The Financial Ombudsman Service (FOS) has published its responses to the UK government’s review of the Consumer Credit Act 1974 (CCA). Whilst the FOS welcomes the review and broadly agrees with the principles underlying the reform, they do note that the forthcoming FCA Consumer Duty will complement, but is no substitute for, the requirements of the CCA and indeed that the protection levels afforded by the CCA are not available in any “consumer protection legislation, rules and/or guidance, outside of the CCA”.

The Australian Securities and Investments Commission (ASIC) alleges that between July 2016 and April 2021 Renato De Maria, the sole director of Alliance Management Group Pty Ltd used his position as director of AIBS dishonestly, by misusing monies held in trust accounts on behalf of AIBS clients, by:

• authorizing three withdrawals totaling $7.9 million which were ultimately transferred back to Mr De Maria via a third party and thereby contravening s184(2) of the Corporations Act; 
• issuing inflated insurance invoices totaling over $4 million to four separate clients and thereby contravening ss1041G of the Act; and 
• transferring over $24 million between an AIBS trust account and other accounts controlled by Mr De Maria and thereby contravening s184(2) of the Act. 

Mr De Maria will next appear before the Melbourne Magistrates’ Court on 28 June 2023.