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

• (Feb 2024) Global Blockchain Business Council / Clifford Chance / R3 webinar recording – CBDCs: Policy and Legal Considerations

SPOTLIGHT

AI: the evolving legal landscape in Asia Pacific:

Asia Pacific (APAC) has been an early mover in relation to AI regulation. For example, Mainland China has had city or regional regulations in place for some time and, more recently, enacted national AI regulations targeted at particular types of AI services or use.  However, approaches to regulating AI vary significantly across APAC. This article explores AI-related legislative developments in Mainland China, Hong Kong, Singapore, Japan, and Australia, including the additional overlay of specific financial services requirements where relevant.

GLOBAL LEGAL AND REGULATORY UPDATES, INDUSTRY GUIDANCE AND PUBLICATIONS

International

• (31 Jan 2024) The Basel Committee on Banking Supervision October 2023 consultation on disclosure of cryptoassets exposures, which proposed a standardised disclosure table and set of templates for banks' cryptoasset exposures with a proposed implementation date of 1 January 2025, has now closed. Published responses to date include: Global Financial Markets Association (GFMA), Institute of International Finance (IIF), International Swaps and Derivatives Association (ISDA), and International Capital Markets Association (ICMA) joint response | Digital Token Identifier Foundation response | Independent Community Bankers of America (ICBA) response

Americas

US:

• (6 Feb 2024) The Securities and Exchange Commission (SEC) has adopted two rules that require market participants who engage in certain dealer roles, in particular those who take on significant liquidity-providing roles in the markets, to register with the SEC, become members of a self-regulatory organisation (SRO), and comply with federal securities laws and regulatory obligations. | Fact sheet | Press release

APAC

Hong Kong:

• (2 Feb 2024) Financial Services and the Treasury Bureau (FSTB) blog post on a new phase in virtual asset regulation, which indicates that the Hong Kong Government intends to consult on its proposed regulatory framework for over-the-counter (OTC) virtual asset trading platforms in the very near future.

Europe

EU:

• (2 Feb 2024) The EU Council’s Committee of Permanent Representatives (Coreper) has endorsed the text of the proposed Artificial Intelligence (AI) Act that was provisionally agreed between Council and EU Parliament negotiators in trilogue in December 2023. The proposed regulation, which 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, still needs to be formally approved by both the Parliament and the Council.
• (2 Feb 2024) The European Securities and Markets Authority (ESMA) has updated its questions and answers (Q&A) on the Markets in Cryptoassets Regulation (MiCA) with new answers on the provision of services by cryptoasset service providers established before (and after) 30 December 2024, passporting rights for entities benefiting from grandfathering, the prohibition of monetary and non-monetary benefits, the provision of cryptoasset services by credit institutions, and notifications under Article 60 of MiCA. | Press release
• (2 Feb 2024) EU Parliament briefing which provides an initial analysis of the strengths and weaknesses of the EU Commission’s impact assessment accompanying its June 2023 digital euro proposals | Webpage
• (1 Feb 2024) European Supervisory Authorities (ESAs) report setting out the results of a stocktake of BigTech direct financial services provision in the EU. The report identifies the types of financial services currently carried out by BigTechs in the EU pursuant to EU licences and highlights inherent opportunities, risks, regulatory and supervisory challenges. | Press release

France:

• (1 Feb 2024) Autorité des marchés financiers (AMF) press release (in French) providing a reminder of the main provisions of the Digital Operational Resilience Act (DORA) and encouraging market participants to prepare for its entry into force on 17 January 2025.

UK:

• (7 Feb 2024) The Financial Conduct Authority (FCA)’s new regulatory gateway for authorised firms to approve financial promotions for an unauthorised person has come into effect. The gateway was introduced by the Financial Services and Markets Act 2023 (FSMA 2023) and requires all authorised persons who want to approve financial promotions to have the FCA's permission to do so, subject to certain exemptions. The FCA's final policy on the new financial promotion requirement, including its approach to assessing applications and the reporting and notification obligations on firms who are granted permission, were set out in its September 2023 policy statement PS23/13.
• (6 Feb 2024) UK Government command paper setting out the feedback it received to its March 2023 white paper on a proposed approach to regulating AI and its own response. | Press release
• (5 Feb 2024) UK Finance blog post on navigating the financial technology landscape in 2024
• (2 Feb 2024) Bank of England staff working paper on early evidence from Open Banking, customer data access and fintech entry | Webpage
• (31 Jan 2024) The Labour Party has published ‘Financing Growth’, its plan for financial services, setting out its six priorities for the sector, which include embracing innovation and fintech by becoming a global standard-setter for the use of artificial intelligence in financial services, delivering the next phase of Open Banking, defining a roadmap for Open Finance, embracing securities tokenisation and a central bank digital currency, and establishing a regulatory sandbox for financial products to reach underserved communities.
• (31 Jan 2024) Government and Bank of England response to the House of Commons Treasury Committee’s report ‘The Digital Pound: still a solution in search of a problem?’
• (29 Jan 2024) The Data Reporting Services Regulations 2024 (SI 2024/107), which have been made and published. The SI creates a new regulatory framework that will replace retained EU Law (REUL) in relation to data reporting services providers (DRSPs). | Explanatory memorandum