This newsletter covers some of the more recent regulatory changes impacting Banking, Capital Markets, Insurance, Energy, Utilities, Life Sciences, Communications & Media and Software & Platforms firms. We track more than 100 regulatory and industry bodies across North America, Europe and Asia Pacific. The shortlisted entries highlight the risks covered and business processes affected by the regulatory reforms.

CURRENT REGULATIONS:

European Central Bank (ECB):
ECB Banking Supervision to supervise securitisation requirements for banks
Publication Date: May 14th 2021

Risks Covered: Operational Risk
Business Processes Impacted: Business Continuity Management
The agency has announced to start ensuring that the banks it directly supervises comply with the requirements for risk retention, transparency and resecuritisation, which are set out under Articles 6 to 8 of the EU Securitisation Regulation.1

US Food and Drug Administration (FDA):
FDA finalizes QIDP Q&A guidance
Publication Date: May 11th 2021

Risks Covered: Operational Risk
Business Processes Impacted: Data Quality Management
The guidance finalizes a draft version released for comment in 2018 and includes a revised question and answer section providing clarification on the types of products the agency considers to be anti-bacterial or anti-fungal drugs for the purposes of the designation.2

Financial Conduct Authority (FCA):
CP21/13: A new Consumer Duty
Publication Date: May 14th 2021
Risks Covered: Conduct Risk
Business Processes Impacted: Consumer/Investor Protection
The agency is consulting on a Consumer Duty that would set clearer and higher expectations for firms’ standards of care towards consumers.3

Financial Conduct Authority (FCA):
CP21/11: The stronger nudge to pensions guidance
Publication Date: May 4th 2021
Risks Covered: Compliance Risk
Business Processes Impacted: Finance & Performance Management
The authority is consulting on additional rules to implement the provisions of the Financial Guidance and Claims Act 2018.4

Financial Conduct Authority (FCA):
CP21/15: Benchmarks Regulation: how we propose to use our powers over use of critical benchmarks
Publication Date: May 19th 2021
Risks Covered: Conduct Risk
Business Processes Impacted: Business Continuity Management
The agency is seeking views on how we propose to use two new authorities’ powers introduced through amendments to the Benchmarks Regulation (BMR) under the Financial Services Act 2021 (FS Act).5

European Commission (EC):
Veterinary medicines – rules on the distribution of active substances
Publication Date: May 12th 2021
Risks Covered: Operational Risk
Business Processes Impacted: Data Quality Management
The agency is seeking views on the distribution of active substances used in veterinary medicines.6

European Systemic Risk Board (ESRB):
Adverse scenario for the EIOPA 2021 EU-wide insurance sector stress test
Publication Date: May 7th 2021
Risks Covered: Operational Risk
Business Processes Impacted: Risk Management & Stress Testing
This document presents the adverse scenario that insurance undertakings are required to use in the 2021 EU-wide stress-testing exercise coordinated by the agency.7

European Commission (EC):
Extension of the transitional provisions related to own funds requirements for exposures to central counterparties
Publication Date: May 6th 2021
Risks Covered: Compliance Risk
Business Processes Impacted: Lending & Investment
The authority has extended the initiative by 12 months (until 28 June 2022) the transitional periods during which institutions can treat exposures to a third-country central counterparty (CCP) that has not been recognised in accordance with Regulation (EU) No 648/2012 as if they were exposures to a recognised CCP.8

Monetary Authority of Singapore (MAS):
Consultation Paper on Proposed AML Notices for Cross-Border Business Arrangements of Capital Markets Intermediaries under Proposed Exemption Frameworks
Publication Date: May 12th 2021
Risks Covered: Operational Risk
Business Processes Impacted: Fraud and Financial Crime
This consultation seeks comments on the draft Notices setting out the proposed anti-money laundering and countering the financing of terrorism requirements under both the proposed Branch Framework and notified FRC framework.9

Office of the Privacy Commissioner (Canada):
Joint Statement by Federal, Provincial and Territorial Privacy Commissioners
Publication Date: May 19th 2021
Risks Covered: Conduct Risk
Business Processes Impacted: Consumer/Investor Protection
Vaccine passports must be developed and implemented in compliance with applicable privacy laws. They should also incorporate privacy best practices in order to /seek the highest level of privacy protection commensurate with the sensitivity of the personal health information that would be collected, used or disclosed.10

Federal Deposit Insurance Corporation (FDIC):
Request for Information and Comment on Financial Institutions’ Use of Artificial Intelligence, Including Machine Learning
Publication Date: May 24th 2021
Risks Covered: Operational Risk
Business Processes Impacted: Business Continuity Management
Multiple agencies has requested for information and comment on Financial Institutions’ Use of Artificial Intelligence, Including Machine Learning. The comments period has extended from June 1, 2021 to July 1, 2021.11

Federal Deposit Insurance Corporation (FDIC):
FDIC Issues Request for Information on Digital Assets
Publication Date: May 17th 2021
Risks Covered: Operational Risk
Business Processes Impacted: Data Quality Management
The agency is exploring emerging digital assets ecosystem to help inform it’s understanding of the industry’s and consumer’s interest in this area. The last date for sending comments is July 16, 2021.12

Financial Conduct Authority (FCA):
PS 21/5: General insurance pricing practices market study
Publication Date: May 28th 2021
Risks Covered: Compliance Risk
Business Processes Impacted: Consumer/Investor Protection
The agency is introducing new product governance rules to facilitate that firms deliver fair value on all insurance products. The effective date for systems and controls, product governance is 1 October 2021 and for pricing and auto-renewal remedies is 1 January 2022.13

Financial Conduct Authority (FCA):
CP21/15: Benchmarks Regulation: how we propose to use our powers over use of critical benchmarks
Publication Date: May 20th 2021
Risks Covered: Operational Risk
Business Processes Impacted: Business Continuity Management
The agency is seeking views on how to propose using two new powers introduced through amendments to BMR. This would facilitate the appropriate regulatory powers to help reduce risk in the wind-down period before LIBOR ceases permanently.14

Financial Conduct Authority (FCA):
Dear CEO Letter: Ensure your customers understand how their money is protected
Publication Date: May 18th 2021
Risks Covered: Conduct Risk
Business Processes Impacted: Funding & Liquidity Management
The agency expresses concerned that many e-money firms are not adequately disclosing the differences in protections between their services and traditional banking, in particular, that FSCS protection does not apply.15

International Swaps and Derivatives Association (ISDA):
The Future of Risk, Capital and Margin Reporting
Publication Date: May 20th 2021
Risks Covered: Operational Risk
Business Processes Impacted: Portfolio Advisory & Management
The whitepaper has been developed to set out a vision of what is required to reduce the operational complexity and costs associated with the proliferation of standards aimed at capturing portfolio risk data.16

European Banking Authority (EBA):
Mapping Climate Risk – Main findings from the EU-wide pilot exercise
Publication Date: May 21st 2021
Risks Covered: Climate Risk
Business Processes Impacted: Risk Management & Stress Testing
The process of integrating climate risks into standard financial stability monitoring and supervision has already kicked off, building on recent EU initiatives on sustainable finance.17

European Commission’s Medical Device Coordination Group (MDCG):
MDCG offers guidance on clinical investigations in Eudamed’s absence
Publication Date: May 21st 2021
Risks Covered: Compliance Risk
Business Processes Impacted: Business Continuity Management
The agency has issued guidance providing a set of templates that  would be used to fulfill the application/notification  submission requirements for clinical investigations under the Medical Device Regulation (MDR) prior to the availability of the Eudamed clinical investigations and performance studies module.18

Australian Prudential Regulation Authority (APRA):
Market Risk Modelling: Risks-not-in-VAR
Publication Date: May 18th 2021
Risks Covered: Market Risk
Business Processes Impacted: Fraud and Financial Crime
The authority is aiming to improve the consistency of the application, capitalisation and reporting of RNIV for ADIs accredited to use the internal model approach (IMA) to traded market risk.19

Prudential Regulation Authority (PRA):
PRA Rulebook: CRR Firms: Operational Continuity Instrument 2021
Publication Date: May 28th 2021
Risks Covered: Operational Risk
Business Processes Impacted: Business Continuity Management
The agency is amending the definition of critical services as a result of CP20/20. For a firm to be in scope of the rules, it must receive critical services supporting critical functions, and must meet one of the three thresholds set out in Operational Continuity 1.1. The amended Operational Continuity Part would be effective from Sunday 1 January 2023.20

FORTHCOMING REGULATIONS:

The Board of Governors of the Federal Reserve System (The Fed):
Developments in the Credit Score Distribution over 2020
The distribution of household credit risk can vary with aggregate economic and credit conditions. Analysis of the credit score distribution, payment history, and other main determinants of credit scores point toward forbearance largely driving the increase in scores.21

Postal Service (PS):
Privacy Act System of Records
The agency is proposing to create a new General Privacy Act System of Records.22

European Commission (EC):
Energy labelling of mobile phones and tablets – informing consumers about environmental impact
This initiative complements the parallel implementing Regulation on eco-design. It aims to introduce, when relevant, labelling requirements that support eco-design by giving consumers better information regarding product sustainability.23

European Commission (EC):
EFSI 2.0 ex-post Evaluation
The objective of the action is to perform an independent evaluation as required by the EFSI Regulation as regards with the extension of the duration of the European Fund for Strategic Investments as well as the introduction of technical enhancements for that Fund and the European Investment Advisory Hub. This would cover the EFSI, the EIAH and the EIPP.24

European Commission (EC):
Medical devices – EU rules on setting up and maintaining the EUDAMED database
The agency is seeking comments on setting up and maintaining the EUDAMED database. The comments can be shared by 22 June 2021.25

European Securities and Markets Authority (ESMA):
ESMA responds to European Commission consultation on the ESAs
The agency has published its response to the European Commission’s consultation on the functioning of the European Supervisory Authorities (ESAs).26

European Commission (EC):
Pharmacovigilance – Good practice for veterinary medicines (new rules)
The agency informs that the draft of the implementing act of the European Commission laying down rules for the application of Regulation (EU) 2019/6 of the European Parliament and of the Council on the necessary measures on good pharmacovigilance practice for veterinary medicinal products and on the format and content of the reference dossier of the pharmacovigilance system. The comments can be shared by 08 June 2021.27

European Securities and Markets Authority (ESMA):
ESAs’ report on the implementation and functioning of the securitisation regulation
The joint committee of the European Supervisory Authorities has published its report on the implementation and functioning of the securitisation regulation.28

Footnotes:

  1. “Updates on EU Securitisation regulation,” European Central Bank (ECB), May 14, 2021. Access at: ECB Banking Supervision to supervise securitisation requirements for banks.
  2. “Q&A on the types of products,” US Food and Drug Administration (FDA), May 11, 2021. Access at: FDA finalizes QIDP Q&A guidance.
  3. “Open consultation on consumer duty,” Financial Conduct Authority (FCA), May 14, 2021. Access at: CP21/13: A new Consumer Duty.
  4. “Consultation on the provisions of pensions guidance,” Financial Conduct Authority (FCA), May 4, 2021. Access at: CP21/11: The stronger nudge to pensions guidance.
  5. “Seeking inputs on benchmarks regulation,” Financial Conduct Authority (FCA), May 19, 2021. Access at: CP21/15: Benchmarks Regulation: how we propose to use our powers over use of critical benchmarks.
  6. “Seeking inputs on distribution of active substances used in veterinary medicines,” European Commission (EC), May 12, 2021. Access at: Veterinary medicines – rules on the distribution of active substances.
  7. “EU wide stress testing,” European Systemic Risk Board (ESRB), May 7, 2021. Access at: Adverse scenario for the EIOPA 2021 EU-wide insurance sector stress test.
  8. “Extension of CCPs,” European Commission (EC), May 6, 2021. Access at: Extension of the transitional provisions related to own funds requirements for exposures to central counterparties.
  9. “Seeking comments on proposed AML/CFTC framework,” Monetary Authority of Singapore (MAS), May 12, 2021. Access at: Consultation Paper on Proposed AML Notices for Cross-Border Business Arrangements of Capital Markets Intermediaries under Proposed Exemption Frameworks.
  10. “Statement on vaccine passports,” Office of the Privacy Commissioner (Canada), May 19, 2021. Access at: Joint Statement by Federal, Provincial and Territorial Privacy Commissioners.
  11. “Request on using AI including ML,” Federal Deposit Insurance Corporation (FDIC), May 24, 2021. Access at: Request for Information and Comment on Financial Institutions’ Use of Artificial Intelligence, Including Machine Learning.
  12. “Digital Assets ecosystem,” Federal Deposit Insurance Corporation (FDIC), May 17, 2021. Access at: FDIC Issues Request for Information on Digital Assets.
  13. “New product governance rules for insurance products,” Financial Conduct Authority (FCA), May 28, 2021. Access at: PS 21/5: General insurance pricing practices market study.
  14. “Amendments for BMR,” Financial Conduct Authority (FCA), May 20, 2021. Access at: CP21/15: Benchmarks Regulation: how we propose to use our powers over use of critical benchmarks.
  15. “Issues in e-money firms over disclosures,” Financial Conduct Authority (FCA), May 18, 2021. Access at: Dear CEO Letter: Ensure your customers understand how their money is protected.
  16. “Whitepaper on reducing operational complexity,” International Swaps and Derivatives Association (ISDA), May 20, 2021. Access at: The Future of Risk, Capital and Margin Reporting.
  17. “EU initiative on sustainable finance,” European Banking Authority (EBA), May 21, 2021. Access at: Mapping Climate Risk – Main findings from the EU-wide pilot exercise.
  18. “Guidance for clinical investigations,” European Commission’s Medical Device Coordination Group (MDCG), May 21, 2021. Access at: MDCG offers guidance on clinical investigations in Eudamed’s absence.
  19. “To improve internal model approach,” Australian Prudential Regulation Authority (APRA), May 18, 2021. Access at: Market Risk Modelling: Risks-not-in-VAR.
  20. “Amendments for operational continuity instrument 2021,” Prudential Regulation Authority (PRA), May 28, 2021. Access at: PRA Rulebook: CRR Firms: Operational Continuity Instrument 2021.
  21. “Credit score distribution,” The Board of Governors of the Federal Reserve System (The Fed), April 30, 2021. Access at: Developments in the Credit Score Distribution over 2020.
  22. “Proposal to create new general privacy act,” Postal Service (PS), May 11, 2021. Access at: Privacy Act System of Records.
  23. “Support on eco-design,” Eruopean Commission (EC), May 31, 2021. Access at: Energy labelling of mobile phones and tablets – informing consumers about environmental impact.
  24. “Evaluation by EFSI Regulation,” European Commission (EC), May 31, 2021. Access at: EFSI 2.0 ex-post Evaluation.
  25. “Seeking comments on EUDAMED database,” European Commission (EC), May 28, 2021. Access at: Medical devices – EU rules on setting up and maintaining the EUDAMED database.
  26. “Response on the functioning of ESAs,” European Securities and Markets Authority (ESMA), May 26, 2021. Access at: ESMA responds to European Commission consultation on the ESAs.
  27. “Measures on good pharmacovigilance practice,” European Commission (EC), May 11, 2021. Access at: Pharmacovigilance – Good practice for veterinary medicines (new rules).
  28. “Report on functioning of securitization regulation,” European Securities and Markets Authority (ESMA), May 17, 2021. Access at: ESAs’ report on the implementation and functioning of the securitisation regulation.

 

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Regulatory Compliance Team

Regulatory Compliance Team

Accenture Regulatory Compliance Team, Finance & Risk Practice

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