CUBE RegNews:
24^th April

FinCEN has confirmed the renewal and expansion of its Geographic Targeting Orders (GTOs) that require US title insurance companies to identify the natural persons behind shell companies used in non-financed purchases of residential real estate. The terms of the GTOs are effective beginning April 25th, 2023, and ending on October 21st, 2023. The GTOs have been expanded to a number of new counties with effect from 24th May. Title insurance companies in these new regions and the existing remit are required by law to file reports identifying individuals who made all-cash real estate purchases exceeding $300,000 through shell companies

CFTC charges 14 firms

The Commodity Futures Trading Commission (CFTC) has filed charges against 14 entities for fraudulently claiming to be registered with the CFTC as futures commission merchants (FCM) and retail foreign exchange dealers (RFED).

Each charge seeks an order directing the respondent to cease and desist from committing violations of the Commodity Exchange Act (CEA) and CFTC regulations, alleging that, from at least January 2023 to the present, the entities have claimed to be registered FCMs and RFEDs with the CFTC and members of NFA. None of them are registered with the CFTC.

HKMA Dear CEO letter

The Hong Kong Monetary Authority (HKMA) has written to all CEOs of authorized institutions to provide guidelines for the second round of the climate risk stress test (CRST). 

Notable changes introduced, since the first CRST carried out in 2021, include the introduction of a new five-year scenario, additional assessment requirements, and more detailed reporting requirements.

The second round of the CRST will be undertaken between June 2023 to June 2024.

The Financial Conduct Authority (FCA) has introduced new measures aimed at ensuring customers can continue to use UK Post Offices for Everyday Banking requirements.

The measures include: 

• A move towards card-based transactions and away from paying-in slips, where possible, to allow enhanced monitoring.   
• Upskilling staff to spot patterns of suspicious activity.   
• Enhancing monitoring capabilities in banks which allow them to identify suspicious activity.  
• Reducing cash deposit limits at the Post Office, subject to customer arrangements, to below the existing limit of £20,000 per transaction. Banks should take a data-led approach and consider whether a tailored offer is appropriate.  
• Reducing the time taken to submit Suspicious Activity Reports to the National Crime Agency (NCA), enabling them to take timely action.    
• Improving intelligence sharing so that information is passed on to other firms, law enforcement and the FCA on a regular basis. 

The FCA expects the new measures to apply to all firms who are part of the Banking Framework Agreement, which allows customers of 30 bank and building society brands to continue to be able to use Post Offices to withdraw and deposit cash in their accounts. 

The European Central Bank (ECB) has published The importance of being transparent: A review of climate-related and environmental risks disclosures practices and trends which analyzes the responses from its supervisory assessment of institutions’ climate-related and environmental risks disclosures. Overall the results of the summary show progress, reporting that:  

“Most banks have now improved their public disclosures to address climate-related and environmental (C&E) risks, having clearly built up their capabilities in 2022. This broadly reflects the observations made in the 2022 thematic review on C&E risks, which found that most institutions have devised an institutional architecture to address C&E risks. For example, while only slightly more than a third of banks disclosed that their exposure to C&E risks was material in 2021, the percentage of banks making such a disclosure – at least for some risks or in general terms – is now 86%.” 

However, Frank Elderson, Vice-Chair of the ECB’s Supervisory Board cautioned the findings noting: “We acknowledge that banks have been making progress, but further improvements are urgently needed. Stricter disclosure rules are taking effect this year. If necessary, we will take the appropriate supervisory actions to ensure that banks comply”.