October 5, 2023 | Greg Kilminster
Estimated reading time: 3 minutes
CUBE RegNews September 2023 summary
Stay informed with our monthly regulatory and compliance recap, providing you with a comprehensive overview of the latest regulatory events. For daily updates, check out our RegNews summaries here.
The Financial Conduct Authority (FCA) has been relatively quiet in terms of financial penalties imposed on individuals and entities this year, but two individuals were fined in September for providing flawed advice to pension clients.
The SEC began the month reasonably quietly too, charging five IAs with client asset failures and Virtu Americas a week later with breaching internal barriers between its prop trading and institutional customer execution services.
However, the same regulator went into overdrive in the last week of the month issuing more than $200 million in the last ten days of the month alone in fines, disgorgement and interest charges. There were some familiar names amongst these enforcements including Kroll, Goldman Sachs, and, from the CFTC, JP Morgan, Goldman Sachs and Bank of America who were fined for failings around swap dealer activities.
The CFTC also fined Interactive Brokers $20 million for yet another record keeping failure, just a month after Goldman and Citi were fined by the same regulator for their own record keeping violations.
The UK’s FCA launched three consultations in September: on the Insurance Distribution Directive; Diversity and Inclusion in the Financial Services Sector and Consumer Credit – Product Data Sales Reporting.
The FCA also took a look at the PEP/banking issue that had been brought to prominence earlier in the year following the spat between Nigel Farage and Coutts bank. The regulator’s early findings suggested there was little evidence to suggest banks deliberately targeted PEPS but with a full review not due until June 2024, there may be more to come.
Meanwhile the European Securities and Markets Authority issued an update on its own consultation activity and elsewhere several regulators started teeing up their 2024 activities with the FCA advising wholesale banks of future plans and EIOPA outlining its broad thematic focus, and the SEC hinting at its future domestic and international agenda.
Several regulators made speeches or issued statements during the month that considered a digital future with artificial intelligence playing a critical part in financial services compliance and an article published by the American Bankers Association helpfully summarised some of the thinking.
A senior executive at the Deutsche Bundesbank called for a new international regulator for digital assets, whilst the CFTC called for a pilot programme for digital assets, emphasising its view that more legislation is required in this sector.
Another CTFC executive director confirmed digital assets are in the regulator’s spotlight in a speech on enforcing in digital derivatives markets.
Policies and Procedures
The SEC approved an amendment to the National Market System (NMS) Plan governing the Consolidated Audit Trail (CAT) at the start of the month and a week or so later finalised its guidance on the “names rule” to try to combat greenwashing by funds. Later in the month it also approved a revised Privacy Act rule.
In the UK both the Office of Financial Sanctions Implementation and the FCA offered new guidance on sanctions, the former on its new powers, the latter on better sanctions practices following its survey of 90 firms. The FCA also announced it may delay aspects of its crypto promotions regime, scheduled to come into force early October 2023.
Finally, on the same day we reported that the Hong Kong Securities and Futures Commission (SFC) had adopted new changes to its Codes on Takeovers and Mergers and Share Buy-backs and that the US National Credit Union had approved a new rule which provides flexibility for federally insured credit unions to take advantage of advanced technologies and opportunities offered by the financial technology sector.
Struggling to keep up with the volume and velocity of regulations? Get in touch below to find out how CUBE’s AI can automate the entire compliance process, saving your business time and money.
Discover how CUBE can help your firm keep on top of emerging regulations.