In this regular update, we round-up FinTech-related regulatory developments for the week ending 30 October 2020.


FSB to host virtual FinTech workshops

The Financial Stability Board (FSB) has opened registration for its financial technology (FinTech) virtual workshops on 4 and 5 November 2020. The workshops will focus on the following:

  • November 4 – the workshop will present the FSB’s work on the use of supervisory technology (SupTech) and regulatory technology (RegTech) by authorities and regulated institutions, following the FSB’s recent report on the topic; and
  • November 5 – the workshop will present the FSB’s work on the provision of financial services by big technology (BigTech) firms in emerging market and developing economies, following the FSB’s recent report on the topic. [28 Oct 2020] 







FCA releases broader OpRes questionnaire

The FCA has updated its cyber resilience webpage with the news that it has created a broader operational resilience (OpRes) self-assessment questionnaire to help firms and the FCA itself understand their OpRes – including cyber – capabilities. Firms that wish to complete the questionnaire should contact the FCA using the email address provided. [30 Oct 2020]



FCA to participate in GFIN cross-border testing initiative

The FCA has announced that it will be taking part in the Global Financial Innovation Network’s (GFIN) cross-border testing initiative, alongside 22 regulators across 5 continents. Building on GFIN’s 2019 cross-border testing pilot, GFIN is requesting applications from firms to test innovative financial products, services, business models or regulatory technology across more than one country or jurisdiction. Interested firms should review the list of participating regulators and their respective Regulatory Compendiums and submit an application via the GFIN website.

Applications are requested by 31 December 2020. To assist with the application process, GFIN has published a single-entry application form and frequently-asked questions (FAQs) document. [29 Oct 2020]



FCA and Reserve Bank of India sign FinTech MoU

The FCA and Reserve Bank of India have signed a Memorandum of Understanding (MoU) entitled ‘Regulatory Co-operation Agreement on FinTech’, which is intended to promote financial technology (FinTech) innovation in the UK and Indian markets. In particular, the MoU: provides a framework for collaboration and referrals between the innovation arms of the FCA and Reserve Bank of India; and sets out how both authorities plan to share and use information on innovation in their respective markets.[29 Oct 2020]


CHAPS & RTGS ISO 20022 migration: revised approaches and final schemas

The Bank of England (BoE) has published the ‘CHAPS & RTGS ISO 20022 migration: revised approach and final schemas’ document, which is the new baseline document for the migration to ISO 20022. The document should be used as a handbook by CHAPS Direct Participants, reserves and settlement account holders, and related stakeholders and technology providers.

The BoE will summarise feedback to Section II of the July Industry Review and provide a further update on its policy objectives, such as the use of Purpose Codes, legal entity identifiers (LEIs) and structured data, in a separate Policy Statement later in 2020. [29 Oct 2020]




Covid-19: BoE speech by Tom Mutton on FinTech during the pandemic and beyond

The Bank of England (BoE) has published a speech delivered by Tom Mutton, Director of FinTech, on the response and recovery of FinTech in light of Covid-19. Mr Mutton addresses, amongst other things:

  • why FinTech matters;
  • the BoE’s FinTech priorities;
  • the need for response and recovery;
  • the right regulation; and
  • central bank digital currency (CBDC). [26 Oct 2020]





ASX increases the scope of CHESS replacement and resets the go-live date to April 2023

On 28 October 2020, ASX released a media statement confirming the new go-live date for the CHESS replacement system as April 2023, with increased project scope and a 12-month extension to the proposed date consulted upon mid-year. This follows careful consideration of the feedback from the 100 organisations that participated in the extensive industry consultation, engagement with regulatory agencies, detailed discussions with ASX’s technology partners, and completion of a comprehensive project review.  [28 Oct 2020]





Hong Kong

SFC Chief Executive Officer discusses EDSP requirements at Compliance Forum 2020 

The SFC has published opening remarks made by its Chief Executive Officer, Mr Ashley Alder, at the SFC Compliance Forum 2020.  Mr Alder discussed the key challenges faced by the industry as a result of Covid-19 and geopolitical issues, and in particular, the requirements set out by the SFC in a circular in October 2019 on the use of external electronic data storage (EDSP requirements).

Mr Alder commented that:

  • the EDSP requirements were prompted in part by the International Organisation of Securities Commissions’ work on outsourcing and cloud computing, which commenced in 2017, prior to the advent of the current geopolitical issues;
  • the SFC’s primary purpose was to enable firms to store their regulatory records using external providers for electronic data storage, including the cloud, but in a way which complies with key regulatory objectives and requirements; and
  • critically, the prospect of a case not being pursued just because the SFC could not obtain regulatory records located outside Hong Kong would be unacceptable.

Mr Alder indicated that in light of feedback from the industry, the SFC will (subject to certain criteria) adopt the industry’s suggestion that a firm’s Managers-In-Charge be designated to bear primary responsibility for ensuring compliance in this area, in line with the SFC’s broader objective to reinforce the accountability of senior management. The SFC will publish a set of frequently asked questions shortly to explain in more detail how this will work.  [30 Oct 2020]








SCM revised Guidelines on Digital Assets

The Securities Commission, Malaysia (SCM) has revised its ‘Guidelines on Digital Assets’ to regulate Initial Exchange Offerings (IEO) and Digital Asset Custodians (DAC). These came into effect on 28 October 2020.

On 15 January 2020, the SCM had announced a framework to enable companies to raise funds via the issuance of digital tokens in Malaysia through an IEO platform registered by the SCM. Under the Guidelines, IEO platform operators will be required to assess and conduct the necessary due diligence on the issuer, review the issuer’s proposal and the disclosures in the whitepaper, and assess the issuer’s ability to comply with the requirements of the Guidelines and the SCM’s Guidelines on Prevention of Money Laundering and Terrorism Financing.

The Guidelines also include rules and regulations on DAC to facilitate interested parties who wish to provide custody services for digital assets.

With the issuance of the revised Guidelines, interested parties who wish to register as an IEO platform operator or DAC can start submitting their applications. The deadline for applications to be registered as an IEO platform operator is 15 February 2021.  [28 Oct 2020]








FINRA: Podcast on AML and Cybersecurity Risks

The Financial Industry Regulatory Authority (FINRA) has released a podcast titled ‘Overlapping Risks’, which is the first in a two-part series on the intersection of a firm’s anti-money laundering (AML) and cybersecurity risks.  [27 Oct 2020]

LabCFTC: Registration Open for Empower Innovation 2020 Event on November 17, 2020

The CFTC has opened registration and released the agenda for LabCFTC’s final Empower Innovation 2020 event. The third session, which will be on “The Future of Digital Finance,” will feature:

  • talks on technology and panel discussions with global innovation leaders; and
  • the announcement of the winner of Project Streetlamp.

Information on registering for the event can be found on the CFTC’s webpage.  [23 Oct 2020]

FinCEN and Fed Request Comment on Proposed Rule under BSA

The Financial Crimes Enforcement Network (FinCEN) and the Fed have announced a request for comment on a proposed rule that would amend the recordkeeping and travel rule regulations under the Bank Secrecy Act (BSA). Under the proposed changes, financial institutions would have to collect, retain and transmit certain information related to funds transfers and transmittals of funds over $250 for international transactions. The threshold for domestic transactions would remain unchanged at $3,000. The proposed rule also makes clear that – by clarifying the meaning of ‘money’ as used in certain defined terms – the aforementioned regulations apply to transactions above the applicable threshold involving convertible virtual currencies, as well as transactions involving digital assets with legal tender status.

The recordkeeping rule amendment is proposed jointly by FinCEN and the Fed, whilst the travel rule amendment is proposed solely by FinCEN.

Feedback is requested by 30 days after publication in the Federal Register.  [23 Oct 2020]



Third UK-US Financial Regulatory Working Group Meeting

The Department of the Treasury has announced that the UK and US have held the third meeting of the UK-US Financial Regulatory Working Group on October 20, 2020. The Working Group meeting focused on five key themes: (1) the economic response to, and potential financial stability impacts of, the COVID-19 crisis, (2) international cooperation and 2021 priorities, (3) cross-border rules and overseas recognition/equivalence/substituted compliance regimes, (4) sustainable finance, and (5) financial innovation. It will continue engage bilaterally on these topics, as well as other topics of mutual interest ahead of the next meeting which is expected to take place in H1 2021.  [22 Oct 2020]

CFTC DSIO Issues Advisory on Virtual Currency for FCMs

The CFTC’s Division of Swap Dealer and Intermediary Oversight (DSIO) has issued an advisory to futures commission merchants (FCMs) regarding the holding of virtual currency in segregated accounts. It provides guidance:

  • on how to hold and report certain deposited virtual currency from customers in connection with physically-delivered futures contracts or swaps; and
  • that FCMs should follow when designing and maintaining risk management programs concerning the acceptance of virtual currencies as customer funds.  [21 Oct 2020]