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

• (9 Dec 2024) Clifford Chance briefing – Navigating The Future: Australia's Proposed Digital Platform Regulation
• (3 Dec 2024) Talking Tech article – Inclusive AI for people with disabilities: Key considerations

SPOTLIGHT

 Hong Kong Monetary Authority launches Digital Bond Grant Scheme

On 28 November 2024, the Hong Kong Monetary Authority (the HKMA) launched the Digital Bond Grant Scheme (the DBGS) to promote the development of the digital securities market in Hong Kong and to encourage broader adoption of tokenisation technology in capital market transactions. We expect that, as with the Green and Sustainable Finance Grant Scheme which has proven to be popular, corporate issuers and their advisers will be incentivised to consider the issuance of digital bonds to take advantage of the grants available under the DBGS

GLOBAL LEGAL AND REGULATORY UPDATES, INDUSTRY GUIDANCE AND PUBLICATIONS

International

• (4 Dec 2024) Financial Stability Board (FSB) press release on its plenary meeting held in Hong Kong on 3 December 2024. Amongst other things, the plenary discussed the financial stability outlook, including recent developments in cryptoasset markets and global stablecoins; cross-border payments, including the need to further progress priority actions and implement measures to address ongoing legal, regulatory and supervisory challenges, such as the finalisation of FSB recommendations on data frameworks; and the FSB’s work programme for 2025, which will be published in early 2025.
• (3 Dec 2024) Bank for International Settlements (BIS) paper which analyses how retail central bank digital currencies (CBDCs) and fast payment systems (FPS) compare with each other and why some jurisdictions have opted for a retail CBDC, while others have chosen to introduce an FPS or both. | Webpage

Americas

US:

• (6 Dec 2024) Financial Stability Oversight Council (FSOC) 2024 Annual Report, which reviews developments in financial markets, identifies vulnerabilities and emerging threats to US financial stability, and makes recommendations to mitigate those vulnerabilities and threats. Amongst other things, the report reiterates the FSOC's prior recommendation that Congress pass legislation to create a comprehensive federal prudential framework for stablecoin issuers. The report also recommends that Congress pass legislation providing federal financial regulators with explicit rulemaking authority over the spot market for cryptoassets that are not securities. | Press release
• (5 Dec 2024) Commodity Futures Trading Commission (CFTC) staff advisory on the use of artificial intelligence in CFTC-regulated markets by registered entities and registrants. The advisory reminds CFTC-regulated entities of their obligations under the Commodity Exchange Act and the CFTC’s regulations as these entities begin to implement AI. | Press release | Statement of Chairman Rostin Behnam | Statement of Commissioner Kristin N. Johnson

APAC

Hong Kong:

• (6 Dec 2024) The Hong Kong Government has gazetted the Stablecoins Bill, which establishes a regulatory regime for issuers of fiat-referenced stablecoins (FRS) in Hong Kong. The Bill will be introduced into the Legislative Council for its first reading on 18 December 2024. | Press release 

Singapore:

• (5 Dec 2024) Monetary Authority of Singapore (MAS) information paper on artificial intelligence (AI) model risk management. The paper is based on a thematic review of banks’ AI (including generative AI) model risk management practices in mid-2024. It sets out good practices that were observed during the review, focusing on the following areas: (a) AI governance and oversight; (b) AI identification, inventorisation and risk materiality assessment; and (c) AI development, validation, deployment, monitoring and change management.
• (5 Dec 2024) The MAS and the Association of Banks in Singapore (ABS) have announced that two new payments solutions, the new electronic deferred payment (EDP) and EDP+ solutions, will be launched in mid-2025 to support the transition to e-payments for both corporate and retail cheque users. The MAS has also launched a consultation to provide details on the transition plan from cheques to e-payments, as well as proposed initiatives that focus on addressing the needs and concerns of corporates and individuals. Deadline for comments: 17 January 2025. | Press release

Europe

EU:

• (10 Dec 2024) European Supervisory Authorities (ESAs) final report on joint guidelines on templates for explanations and opinions, and the standardised test for the classification of cryptoassets, under Article 97(1) of the Markets in Cryptoassets Regulation (MiCA). The guidelines will be translated into the official EU languages and published on the ESAs’ websites. They will apply from three months after the publication of the translations. | Press release
• (4 Dec 2024) ESAs statement on the application of the Digital Operational Resilience Act (DORA). The statement calls on financial entities and third-party providers to ensure they are prepared for DORA applying from 17 January 2025.
• (4 Dec 2024) The EU Council has adopted its negotiating mandate on the EU Commission's proposal for a regulation on a framework for financial data access (FIDA). The proposed FIDA framework, which forms part of the EU Commission's June 2023 financial data access and payments package, is intended to improve customer data sharing between financial institutions. The Council's position broadly supports the Commission's original proposal and its incremental implementation, while seeking to clarify the framework's scope by defining specific data sets, products and sectors, and the timeframe for when data sharing obligations will apply. The position also seeks to reinforce the rules governing third country financial information service providers (FISPs). The EU Parliament agreed its negotiating position in April 2024. The co-legislators will now enter trilogue negotiations in order to agree on a final version of the text. | Press release
• (4 Dec 2024) Joint European Banking Authority (EBA) and European Securities and Markets Authority (ESMA) guidelines on the assessment of the suitability of the members of the management body of issuers of asset-referenced tokens and of cryptoasset service providers (CASPs), which have been translated into the EU official languages and apply from 4 February 2025. | Webpage
• (4 Dec 2024) EBA consultation on draft regulatory technical standards (RTS) regarding the appointment of central contact points by CASPs. The RTS specify the criteria according to which CASPs should appoint a central contact point to ensure compliance with the anti-money laundering and countering the financing of terrorism (AML/CFT) obligations of the host Member State. This includes the circumstances in which appointing a central contact point is appropriate and the functions of those central contact points. As the same considerations apply to electronic money issuers (EMIs) and payment service providers (PSPs) as they do to CASPs, the EBA is proposing to retain the structure and approach set out in the RTS on appointing central contact points for EMIs and PSPs (Delegated Regulation (EU) 2018/1108) and extend the existing provisions to CASPs, as well as introducing new provisions for CASPs where necessary. Deadline for comments: 4 February 2025. | Webpage | Press release

Germany:

• (6 Dec 2024) German Federal Financial Supervisory Authority (BaFin) consultation (in German) on a draft ordinance amending the Investment Institutions Audit Report Ordinance (WpIPrüfbV) and the Crowdfunding Service Providers Audit Report Ordinance (SchwarmfdPV) in order to ensure that compliance with the requirements of DORA is adequately considered and reviewed as part of the annual audit of investment institutions under the Investment Institutions Act and of crowdfunding service providers under the Securities Trading Act and Regulation (EU) 2020/1503. Deadline for comments: 27 December 2024.

Luxembourg:

• (5 Dec 2024) Commission de Surveillance du Secteur Financier (CSSF) communiqué informing the public that it has signed a strategic agreement on AI with Clarence, the Luxembourg sovereign air-gapped cloud, designed to meet the needs of businesses, administrations, and public institutions. An internal CSSF task force has started identifying an initial list of pilot projects to be deployed in the first quarter of 2025. The goal is to integrate AI into critical processes to enhance performance, transparency and efficiency while improving interactions with the public and supervised entities.
• (5 Dec 2024) CSSF communiqué on DORA, with reminders and advice on preparedness.

Poland:

• (9 Dec 2024) The Ministry of Finance has published draft regulations (in Polish) on the operation of online currency exchange offices as part of the draft Act on the cryptoasset market. The draft regulations define non-cash Polish and foreign means of payment, as well as non-cash currency exchange. Only payment service providers keeping accounts for service recipients will be allowed to carry out this exchange, and entities that do not meet the criteria of this definition and conduct currency exchange activities on the internet will have three months to adapt their operations or to terminate the provision of these services. The consequences of violating the regulations stipulated in the draft will be fines of up to PLN 5 million or imprisonment of up to two years.

UK:

• (5 Dec 2024) HM Treasury has published the terms of reference for the Financial Inclusion Committee, which has held its first meeting and is being tasked with tackling barriers to individual and households’ ability to access affordable and appropriate financial products and services. The Committee’s objectives are to develop, coordinate and implement interventions to support financial inclusion in the UK, and advise the UK Government on the development of its financial inclusion strategy. | Press release