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

• (18 Jun 2024) Clifford Chance webinar – Contracting for AI
• (13 Jun 2024) Clifford Chance briefing – APAC Data Regulatory Themes and Strategies

GLOBAL LEGAL AND REGULATORY UPDATES, INDUSTRY GUIDANCE AND PUBLICATIONS

International

• (18 Jun 2024) International Monetary Fund (IMF) blog post on how central bank digital currencies (CBDCs) can boost the Middle East's financial inclusion and payment efficiency
• (14 Jun 2024) The Eurosystem and London Centres of the Bank for International Settlements (BIS) BIS Innovation Hub, together with the Bank of England, have launched Project Meridian FX, to build on the findings of Project Meridian by focusing on foreign exchange (FX) transactions. The starting point is the concept of the synchronisation operator (SO) developed in the first Meridian project. Meridian FX will test the usability of the SO for different types of assets and technologies. The project is intended to provide insights on how operators of real-time gross settlement (RTGS) systems could enable interoperability with new payments technologies, such as distributed ledger technology (DLT). The project aims to report on its findings in Spring 2025. |  Press release
• (14 Jun 2024) BIS paper which presents the results of the 2023 BIS survey on CBDCs and crypto. The paper also provides insight into the use of stablecoins for payments and regulatory approaches to cryptoassets across the globe. | Webpage
• (13 Jun 2024) The BIS and the Bank of Canada have launched the Toronto Innovation Centre, the first such centre to be established in the Americas and the seventh to be opened by the BIS in collaboration with partner central banks around the world. The centre will explore the development of new technologies, both in Canada and throughout Latin America and the Caribbean. | Press release

Europe

EU:

• (19 Jun 2024) The European Banking Authority (EBA) has published a package of technical standards and guidelines under the Markets in Cryptoassets Regulation (MiCA) on the topics of reporting, liquidity stress testing and supervisory colleges. The package completes the delivery of EBA technical standards under MiCA and comprises the EBA's final reports on:
•  draft regulatory technical standards (RTS) on the use of asset-referenced tokens (ARTs) and electronic money tokens (EMTs) denominated in a non-EU currency as a means of exchange; draft implementing technical standards (ITS) on the reporting obligations of issuers of ARTs and EMTs denominated in a non-EU currency, and of cryptoasset service providers (CASPs); draft RTS on supervisory colleges; and guidelines on liquidity stress testing.
• (19 Jun 2024) The banking package of amendments to the Capital Requirements Regulation and Directive (CRR3/CRD6) has been published in the Official Journal: Regulation (EU) 2024/1623 amending Regulation (EU) No 575/2013 as regards requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor; and Directive (EU) 2024/1619 amending Directive 2013/36/EU as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks.
• The package includes a transitional regime for the risk-weighting of EU banks' exposures to cryptoassets that will apply until new legislation implements the Basel Committee's standard on cryptoassets, as well as new provisions on the reporting, disclosure, governance and supervisory review of cryptoasset exposures.
• (19 Jun 2024) The anti-money laundering and counter terrorist financing (AML/CTF) legislative package has been published in the Official Journal, comprising: Regulation (EU) 2024/1624 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing; Directive (EU) 2024/1640 on the mechanisms to be put in place by Member States for the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Directive(EU) 2019/1937, and amending and repealing Directive (EU) 2015/849; Regulation (EU) 2024/1620 establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism and amending Regulations (EU) No 1093/2010, (EU) No 1094/2010 and (EU) No 1095/2010; and Directive (EU) 2024/1654 amending Directive (EU) 2019/1153 as regards access by competent authorities to centralised bank account registries through the interconnection system and technical measures to facilitate the use of transaction records.
• Amongst other things, the package expands the list of obliged entities to cover the majority of the crypto sector, and introduces specific enhanced due diligence measures for cross-border correspondent relationships for cryptoasset service providers.
• (18 Jun 2024) The EU Commission has launched a targeted consultation and a workshop series to seek input from stakeholders on the use of artificial intelligence (AI) in finance. The initiatives cover use cases, benefits, barriers, risks and stakeholder needs. The consultation and workshops are targeted at all financial stakeholders and are intended to enable the Commission to provide guidance to the financial sector on the implementation of the AI Act in their specific market areas. | Press release
• (13 Jun 2024) The EBA has published a package of RTS and guidelines under MiCA on prudential matters, namely own funds, liquidity requirements, and recovery plans. The package comprises the EBA's final reports on: guidelines on recovery plans under MiCA; draft RTS to specify the minimum content of liquidity management policy; draft RTS to specify the highly liquid financial instruments in the reserve of assets; draft RTS further specifying the liquidity requirements; draft RTS on the procedure and timeframe to adjust own funds; and draft RTS on additional own funds requirements and stress testing.
• (13 Jun 2024) European Central Bank (ECB) blog post on 'making the digital euro truly private'
• (12 Jun 2024) ECB slides on the digitalisation of the Single Supervisory Mechanism (SSM)
• (10 Jun 2024) Joint industry letter from representatives of the digital payments and technology sectors, including the European Fintech Association, Payments Europe, the Open Finance Association, and the Electronic Money Association, to the EU Commission on the proposed Payments Services Regulation (PSR) and setting out policy recommendations on fraud detection and prevention.

Switzerland:              

• (12 Jun 2024) Financial Market Supervisory Authority (FINMA) guidance (in German) on the management of operational risks by fund management companies and managers of collective assets, which describes measures to ensure appropriate management of risks in the areas of information and communication technology, data, cyber, business continuity, legal and compliance as well as outsourcing. | Press release

UK:

• (17 Jun 2024) UK Finance blog post on automation strategies in banking.