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

• Talking Tech article – Financial services face up to deepfake risks

GLOBAL LEGAL AND REGULATORY UPDATES, INDUSTRY GUIDANCE AND PUBLICATIONS

International

• (23 Oct 2024) Financial Stability Board (FSB) report on depositor behaviour and interest rate and liquidity risks in the financial system, drawing on lessons from the March 2023 banking turmoil. The report summarises the main findings from FSB work over the past year to assess vulnerabilities in the global financial system related to solvency and liquidity risks amid rising interest rates, the influence of technology and social media on depositor behaviour during bank runs, and how the use of technologies may affect the planning and execution of a resolution. | Press release
• (22 Oct 2024) The FSB has published a letter from its Chair, Klaas Knot, to G20 Finance Ministers and Central Bank Governors, ahead of their meeting on 23-24 October. The letter outlines the work the FSB has undertaken on financial innovation, payments systems, and cyber and operational resilience. | Press release
• (22 Oct 2024) FSB report on the financial stability implications of tokenisation. | Webpage
• (22 Oct 2024) FSB status report on the G20 Cryptoasset Policy Implementation Roadmap. | Webpage
• (21 Oct 2024) The FSB has published: (i) a consolidated progress report for 2024 on work being done under the G20 Roadmap for Enhancing Cross-Border Payments; (ii) a progress report on the implementation of the Legal Entity Identifier (LEI); and (iii) an annual progress report on meeting the improved user experience targets for cross-border payments. | Press release
• (21 Oct 2024) Bank for International Settlements (BIS) report to the G20 on tokenisation and its implications for the role of central banks in payments, monetary policy and financial stability. | Webpage | Press release
• (17 Oct 2024) G7 Cyber Expert Group public statement (dated September 2024) on the opportunities and risks of quantum computing for financial authorities and institutions. Noting possible new quantum applications relevant to the financial system, such as optimisation of processes, the statement also highlights likely future threats to encryption, especially to traditional cryptographic algorithms and confidential data. | HM Treasury press release
• (17 Oct 2024) FSB consultation on the format for incident reporting exchange (FIRE), the common format for financial firms' reporting of operational incidents, including cyber incidents. Deadline for comments: 19 December 2024. | Press release

Americas

US:

• (22 Oct 2024) The Consumer Financial Protection Bureau (CFPB) has issued a final rule to activate the personal financial data rights established by the Consumer Financial Protection Act of 2010. The final rule requires banks, credit unions, and other financial service providers to make consumers’ data available upon request to consumers and authorised third parties in a secure and reliable manner; defines obligations for third parties accessing consumers’ data, including privacy protections; and seeks to promote fair, open, and inclusive industry standards. | Press release
• (18 Oct 2024) Speech by Federal Reserve Board Governor Christopher J. Waller on whether centralised finance and decentralised finance (DeFi) are substitutes or complements to each other.

APAC

Indonesia:

• (20 Oct 2024) The Commodity Futures Trading Regulatory Agency (Bappebti) has given crypto exchanges an extension until the last week of November 2024 to comply with the requirements to be regulated as physical cryptoasset traders (Pedagang Fisik Aset Kripto, or PFAKs). | Press release (in Indonesian)

Europe

EU:

• (23 Oct 2024) The EU Commission has adopted the following Level 2 measures under the Digital Operational Resilience Act (DORA): a Delegated Regulation setting out regulatory technical standards (RTS) specifying the content and time limits for the initial notification of, and intermediate and final report on, major ICT-related incidents, and the content of the voluntary notification for significant cyber threats; and an Implementing Regulation laying down implementing technical standards (ITS) with regard to the standard forms, templates, and procedures for financial entities to report a major ICT-related incident and to notify a significant cyber threat.
• (22 Oct 2024) European Banking Authority (EBA) Decision (dated September 2024) setting out procedural aspects relating to significance assessments of asset-referenced tokens (ARTs) and e-money tokens (EMTs) under the Markets in Cryptoassets Regulation (MiCA) and the transfer of supervisory responsibilities, including the establishment of supervisory colleges for significant ARTs (s-ARTs) and significant EMTs (s-EMTs). | Press release
• (21 Oct 2024) The European Central Bank (ECB) has announced a set of initiatives intended to improve cross-border payments within the EU, building on the Eurosystem’s TARGET Instant Payment Settlement (TIPS) service. In particular, the ECB will implement a cross-currency settlement service in TIPS, which will allow instant payments originating in one TIPS currency to be settled in another TIPS currency and in central bank money. It will also carry out exploratory work on linking TIPS with other fast payment systems. This will include developing links with partners outside the EU to improve cross-border payments globally. | Press release
• (18 Oct 2024) The Eurosystem has revised its cyber resilience strategy, which now incorporates additional entities in addition to financial market infrastructures (FMIs). The new entities covered under the revised strategy are those overseen under the Eurosystem oversight framework for electronic payment instruments, schemes and arrangements (PISA). | Press release
• (18 Oct 2024) The ECB has launched a public consultation on the planned recast of the regulation laying down oversight requirements for systemically important payment systems (SIPS Regulation). The planned recast of the SIPS Regulation includes: (i) a revision of the definition of a SIPS operator so as to exceptionally include a euro area branch of a legal entity located outside the euro area, as well as amendments catering for the oversight of such a branch; (ii) new requirements on how SIPS operators are governed; (iii) the addition of a new article on cyber risk requirements; and (iv) the  addition of a new article setting out key requirements for outsourcing. Deadline for comments: 29 November 2024. | Press release
• (18 Oct 2024) European Securities and Markets Authority (ESMA) survey on legal entity identifiers. The survey aims to raise awareness of recent developments and discussions around the use of alternative identifiers for legal entities, including the opinion published by the European Supervisory Authorities (ESAs) in October 2024. ESMA is consulting the industry to collect feedback on the potential impact of adding other alternatives to the LEI in future reporting or record keeping regimes, or in the review of existing reporting requirements. Specifically, the survey is addressed to financial market participants subject to reporting regimes; entities such as cryptoasset service providers (CASPs) subject to MiCA; and financial entities subject to DORA. Deadline for comments: 12 November 2024. | Press release
• (18 Oct 2024) Speech by Elizabeth McCaul, Member of the Supervisory Board of the ECB, on supervisory expectations on cloud outsourcing. McCaul indicated that the ECB intends to finalise its guide on outsourcing cloud services to cloud service providers by the end of the year.
• (17 Oct 2024) The EU Commission has adopted an Implementing Regulation on cybersecurity of critical entities and networks under the Network and Information Security Directive (EU) 2022/0383 (NIS 2). The implementing act details cybersecurity risk management measures as well as the cases in which an incident should be considered significant and companies providing digital infrastructures and services should report it to national authorities. | Press release

France:

• (15 Oct 2024) The Minister of Economy, Finance and Industry has issued: Ordinance No. 2024-936 (in French) relating to cryptoasset markets, which adapts the provisions of the Monetary and Financial Code and other codes and laws to ensure consistency with the Markets in Cryptoassets Regulation (MiCA), and Ordinance No. 2024-937 (in French) relating to the strengthening of obligations to combat money laundering and terrorist financing in the area of cryptoasset transfers, which transposes into the Monetary and Financial Code the provisions of Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing in their wording as amended by Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain cryptoassets. The provisions of the two ordinances will enter into force on 30 December 2024, except for the provisions of Ordinance No. 2024-936 relating to EMTs and ARTs, which entered into force the day after its publication. The provisions of the ordinance definitively ending the national regime for digital asset service providers (DASPs or PSANs) will enter into force on 1 July 2026, at the end of the transitional period provided for PSANs already authorised before the date of entry into force of MiCA. Report accompanying Ordinance No. 2024-936 | Report accompanying Ordinance No. 2024-937 |  Press release (in French)

UK:

• (22 Oct 2024) The Financial Inclusion Commission (FIC) has published new research highlighting growing financial exclusion in the UK and called for a Government-led National Strategy for Financial Inclusion to promote inclusive growth. | Report: Financial Inclusion in the UK | Report: Achieving full financial inclusion in the UK: current realities and potential solutions | Press release
• (22 Oct 2024) The Financial Conduct Authority (FCA) has announced that it is interviewing 20 'finfluencers' under caution, as it launches targeted action against finfluencers who may be touting financial services products illegally. The FCA has also issued 38 alerts against social media accounts operated by finfluencers which may contain unlawful promotions. | Press release
• (21 Oct 2024) FCA blog post on cryptoasset registrations
• (18 Oct 2024) UK Finance blog post on whether digital currencies and cryptocurrencies pose a higher risk of money laundering
• (17 Oct 2024) HM Treasury consultation paper outlining its plans to regulate the buy-now pay-later (BNPL) market, which are intended to ensure that people using BNPL products have access to simple, clear, and understandable information, avoid unaffordable borrowing, and are protected when issues arise. The consultation seeks input from stakeholders on the draft Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) Order 2025, which would bring BNPL agreements under the regulation of the FCA. Deadline for comments: 29 November 2024. | Press release
• (17 Oct 2024) FCA report which provides an overview of the firms supported under Project Innovate, data on the FCA's innovation services and case studies on various sectors including distributed ledger technology (DLT), payments and open banking and artificial intelligence (AI). | Webpage | Speech by Jessica Rusu | FCA AI Spotlight participation pack | AI Lab webpage
• (17 Oct 2024) Speech by the Master of the Rolls, Sir Geoffrey Vos, on the digital trading revolution

EVENTS

• Global Financial Markets Perspectives Series: AI Series: Data and cyber considerations for AI (online, 14 November 2024): Organisations developing, deploying or using AI systems and tools must navigate privacy, data protection and cybersecurity requirements alongside AI-specific regulations. These parallel, and at times overlapping, frameworks and rules raise new challenges but also enable fresh opportunities for organisations. Our global panel will share practical and market insights at the intersection of these developments, including in the context of governance and compliance programmes, risk management and contractual negotiations. | To register, please see the event series registration form
• Global Financial Markets Perspectives Series: Digital bonds – evolution and scaling (London, 26 November 2024): The benefits of using blockchain or distributed ledger technology for bond issuances into the capital markets is a topic that has garnered strong interest in recent years. Our panellists will look at the latest legal, regulatory and market developments that have shaped the digital bond landscape, explore what the future for digital bonds may look like, and discuss how true scaling of the digital bond ecosystem may be achieved in the years to come. | To register, please see the event series registration form
• Global Financial Markets Perspectives Series: Outsourcing – new technologies, new regulations and new vulnerabilities (online, 10 December 2024): New technologies, major shifts in the global regulatory landscape, and the need for digital resilience require global enterprises to fundamentally rethink their outsourcing strategies and outsourcing relationships. In this session, we will look at the key trends and developments that are shaping the future of outsourcing and the strategies that organisations can adopt to meet these new challenges. | To register, please see the event series registration form