Clifford Chance

Welcome to this week's global fintech round-up, summarising fintech regulatory developments that have happened around the world along with our Clifford Chance fintech publications and upcoming events.

Details of these and previous developments can also be found on our Fintech Topic Guide on the Clifford Chance Financial Markets Toolkit.

CLIFFORD CHANCE BRIEFINGS AND MATERIALS

• (16 Feb 2024) Talking Tech – Proposed Changes to Reporting and Underwriting Requirements for Pricing Insurance
• (15 Feb 2024) Talking Tech – Notice of Proposed Rulemaking: New Cybersecurity Measures and Implications for IaaS Providers
• (15 Feb 2024) Clifford Chance briefing – Competition and Markets Authority publishes report on AI Foundation Models

SPOTLIGHT: US STATE DATA REGULATION

US data privacy has entered a new era. Historically, the data privacy legal landscape has been dominated by sector-specific legislation, often with a focus on cybersecurity or preventing misuse of certain types of personal information. The California Consumer Privacy Act was the first comprehensive state data privacy law added to the US regulatory framework that focused on consumer protection. Since its adoption, various state-level regulatory and legislative activity has been building momentum. We have you covered with our collection of 15 individual state privacy law summaries, including the recent addition of New Jersey and New Hampshire

GLOBAL LEGAL AND REGULATORY UPDATES, INDUSTRY GUIDANCE AND PUBLICATIONS

APAC

Hong Kong

• (20 Feb 2024) Hong Kong Monetary Authority (HKMA) circular providing guidance to authorised institutions on the provision of digital asset custodial services

Japan:          

• (16 Feb 2024) The Japanese Cabinet has approved the 'Bill to partially amend the Act on Strengthening Industrial Competitiveness, etc. to promote the creation of new businesses and investment in industry,' which includes measures to add cryptoassets to the list of assets that can be acquired and held by investment limited partnerships. The Bill will be submitted to the 213th Ordinary Session of the Diet, which is currently in session. | Press release (in Japanese)

Singapore:   

• (6 Feb 2024) Revised Monetary Authority of Singapore (MAS) Notice PSN05 on Technology Risk Management, which sets out requirements for a high level of reliability, availability, and recoverability of critical IT systems and for relevant entities to implement IT controls to protect customer information from unauthorised access or disclosure. The scope of the Notice has been expanded to cover digital payment token service providers, in addition to operators and settlement institutions of designated payments systems under the Payment Services Act 2019. The revised Notice will be effective from 6 November 2024. | FAQs

Europe

EU:

• (19 Feb 2024) European Central Bank (ECB) article and blog post on the debate around the impact of a digital euro on bank funding since the announcement of the likely design features and the EU Commission published its draft regulation on a digital euro. The authors argue that earlier concerns should be reassessed now that they have been effectively addressed by design choices which need to be incorporated into the analysis.
• (13 Feb 2024) The EU Parliament's Internal Market and Civil Liberties Committees have endorsed the provisional agreement on the Artificial Intelligence (AI) Act. The proposed regulation is intended to introduce harmonised rules to promote investment and innovation in AI, and to ensure that AI developed and used within the EU is trustworthy and subject to an appropriate legal framework. The text still needs to be formally adopted in an upcoming Parliament plenary session and to be formally endorsed by the EU Council. It will be fully applicable 24 months after entry into force, except for bans on prohibited practises, which will apply 6 months after the entry into force; codes of practise (nine months after entry into force); general-purpose AI rules including governance (12 months after entry into force); and obligations for high-risk systems (36 months). | Text of the agreement | Press release

UK:

• (15 Feb 2024) The UK Government has written to key regulators, including the Bank of England and the Financial Conduct Authority (FCA), asking them to publish an update by 30 April 2024 outlining their strategic approach to AI and the steps they are taking in line with the expectations in the Government's August 2023 White Paper on a pro-innovation approach to AI regulation
• (13 Feb 2024) HM Treasury / Office of Financial Sanctions Implementation (OFSI) guidance on ransomware and UK financial sanctions, covering: cyber sanctions legislation; sectoral sanctions risk; the UK Government's approach to enforcement; licensing; and cyber resilience and mitigating ransomware attacks. | Webpage

EVENTS

• Digital Asset webinar: Decoding Public vs. Private: Regulatory Insights on Connectivity and Control (online, 27 February 2024): Join us for this upcoming webinar, Decoding Public vs. Private: Regulatory Insights on Connectivity and Control, where Clifford Chance partner Diego Ballon Ossio will join experts from Digital Asset and The ValueExchange. This session aims to enhance understanding of key regulations, highlighting the mandate for a blockchain network that proficiently manages connectivity and control to comply with Basel requirements for effective tokenization. Panellists will explore approaches to maximize the benefits of tokenization while avoiding capital charges on tokenized assets. | To register, please click here.
• Clifford Chance International Festival of Fintech – Virtual (online, 12-14 March 2024): We are delighted to invite you to the third Clifford Chance International Festival of Fintech, which will take place virtually on Tuesday 12 to Thursday 14 March 2024. We will be joined by leading international fintech industry experts to discuss a range of hot topics ranging from fintech M&A, funding and partnerships, to AI and quantum to crypto policy and regulation, tokenisation and digital bonds. | To register, please click here.
• Clifford Chance International Festival of Fintech – Hong Kong (in person, 14 March 2024): This event will feature a lively discussion on the latest fintech developments, including cross-border payment projects, stablecoin regulation, and developments in relation to the e-HKD pilot programme, with speakers including Alice Li, Head of Hong Kong Digital Legal at HSBC and Rocky Mui, Partner at Clifford Chance. | To register, please click here.
• Clifford Chance International Festival of Fintech – London (in person, 14 March 2024): We are delighted to invite you to an exclusive in-person gathering as part of the third Clifford Chance International Festival of Fintech. This event will be hosted at our London offices and promises to be an evening of engaging discussions and valuable networking. Our in-person event will provide an opportunity to connect with industry leaders, engage with our expert speakers, and discuss the latest trends and challenges on B2B Collaboration and Culture. Speakers will include Elizabeth Fullerton-Rome, Independent Chair of the Board for Vocalink Limited, a Mastercard company, Mary O'Connor, Non-Executive Director at Carne Group and Executive Chair, Howden Capital Advisory and Placement and Nicole Pavitt, Lead International Counsel at Plaid. | To register, please click here.