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 PUBLICATIONS

• (5 Jun 2024) Talking Tech article – Understanding the New AI Operator Guidelines in Japan

GLOBAL LEGAL AND REGULATORY UPDATES, INDUSTRY GUIDANCE AND PUBLICATIONS

International

• (11 Jun 2024) World Federation of Exchanges (WFE) paper entitled 'Demystifying tokenisation: dispelling myths, explaining the muted traction, and setting out the starting point for regulation'. | Press release
• (11 June 2024) Bank for International Settlements (BIS) paper on central bank capital and trust in money and lessons from history for the digital age. | Webpage
• (7 Jun 2024) BIS working paper providing a review of the growing body of economic literature on financial technology and competition for banking services. | Webpage
• (5 Jun 2024) The BIS has announced that Project mBridge has reached the minimum viable product (MVP) stage and invited private sector participants to propose value-added solutions that can be connected to the mBridge MVP platform. The project is intended to explore a multi-central bank digital currency (CBDC) platform shared among participating central banks and commercial banks, built on distributed ledger technology (DLT) to enable instant cross-border payments and settlement. | Press release

APAC

Republic of Korea:     

• (10 Jun 2024) The Financial Services Commission (FSC) has issued guidelines on non-fungible tokens (NFTs) to provide standards and examples on determining when NFTs should be considered as virtual assets. | Press release

Europe

EU:

• (10 Jun 2024) EU Innovation Hub for Internal Security report on the use of encrypted communications in criminal investigations
• (10 Jun 2024) European Central Bank (ECB) paper on digital innovation and banking regulation
• (6 Jun 2024) The European Banking Authority (EBA) published a package of regulatory products on governance and remuneration under the Markets in Cryptoassets Regulation (MiCA), comprising: guidelines on the minimum content of the governance arrangements for issuers of asset-referenced tokens (ARTs), which further specify the various governance provisions in MiCA and also clarify the tasks, responsibilities and organisation of the management body, and the organisational arrangements of issuers; final draft regulatory technical standards (RTS) on the minimum content of the governance arrangements on the remuneration policy, which set out a framework similar to the remuneration framework for investment firms and apply to issuers of significant ARTs and electronic money institutions issuing significant e-money tokens (EMTs), and, where Member States require the application of Article 45(1) MiCA, to issuers of non-significant EMTs; and final draft RTS on conflicts of interest for issuers of ARTs, which require issuers of ARTs to implement and maintain effective policies and procedures to identify, prevent, manage and disclose conflicts of interest.
• (4 Jun 2024) Memorandum of Understanding on cooperation between the EBA, the European Insurance and Occupational Pensions Authority (EIOPA), the European Securities and Markets Authority (ESMA), and the European Union Agency for Cybersecurity (ENISA). The multilateral MoU formalises the ongoing discussions between the ESAs and ENISA to strengthen their cooperation as a result of the Directive on measures for a high common level of cybersecurity (NIS2 Directive) and the Digital Operational Resilience Act (DORA). | Press release

• (11 Jun 2024) UK Finance blog post on cyber fraud fusion and an innovative approach to fight online banking fraud
• (10 Jun 2024) UK Finance blog post on data in financial services
• (7 Jun 2024) UK Finance blog post on DORA in the UK
• (6 Jun 2024) The Financial Markets Law Committee (FMLC) has published an updated version of its 2018 paper which examined governing law and related conflicts of law issues in the context of DLT systems. The revised report reconsiders these issues in light of the continued uncertainties around how conflict of law rules should be applied to DLT systems and digital assets, and provides recommendations on how these rules should develop. Clifford Chance Partner Sam Brown participated in the working group for the paper. | Press release
• (5 Jun 2024) City of London Corporation/KPMG report entitled 'Financial and professional services: the future of AI and the workforce', which predicts that artificial intelligence (AI) will add GBP 35 billion to the financial and professional services sector over the next five years. | Press release

UK:

• (5 Jun 2024) UK Finance blog post on shaping cybersecurity strategies amid evolving financial regulations. 
• (29 May 2024) The joint Bank of England (BoE)/Financial Conduct Authority (FCA) consultation on the Digital Securities Sandbox (DSS) has closed. Publicly available responses to date include those from: AFME | CryptoUK | GBBC | GDF | ICMA | IRSG | UK Finance. US Securities and Exchange Commission (SEC) Commissioner Hester M. Peirce has also issued a statement welcoming the proposals and arguing for a cross-border sandbox between the US and UK.

EVENTS

• Global Financial Markets Perspectives Series: AI Series: Contracting for AI (online, 13 June 2024): What makes procuring AI different from procurement of other software or services? How does this affect your contract terms and supplier onboarding and management processes? When there is limited scope for negotiation, where should you focus your efforts? In this session we will discuss strategy and practical tips for contracting for AI. | To register, please see the event series registration form