International Financial Regulatory Dynamics

International organizations

1. The Financial Stability Board released its 2020 work plan, focusing on fintech and stablecoins

On December 2019, 12, the Financial Stability Board (FSB) released its 17 work plan, which includes many aspects of digital and innovative financial development. The plan states that the FSB will

Continue to monitor the development of financial innovation, conduct in-depth analysis of the impact of large technology companies' entry into financial markets on emerging market and developing economies, and conduct research on regulatory technology practices;

Launched a public consultation in April 2020 on how to address stablecoin regulatory issues;

Develop and deliver to the G20 a planned roadmap to enhance global cross-border payments, in coordination with the Committee on Payments and Market Infrastructures and other relevant international organizations and standard-setting bodies, leveraging digital innovation to improve the efficiency and inclusiveness of cross-border payment services. （Source）

2. The International Monetary Fund issued a document discussing central bank digital currency, suggesting that countries weigh the pros and cons according to the situation

On December 2019, 12, the International Monetary Fund (IMF) released a feature article, "Central Bank Digital Currencies: 12 Questions and Answers", discussing the benefits and challenges brought by central bank digital currencies. The IMF is currently investigating the impact of cross-border central bank digital currencies (CBDCs) and can inform policy debates; The IMF can help foster cooperation between countries and interested parties, as well as help countries assess policies regarding CBDCs and study alternative means to improve payment systems. According to the IMF, there are large differences between countries in the extent to which digital currencies are actively explored and the distance to issuing such currencies. At the same time, central bank digital currencies have benefits in reducing cash costs, enhancing financial inclusion and the stability of payment systems, but still face various challenges such as central bank costs and operational risks. In conclusion, each country must weigh the pros and cons of the CBDC case against its actual circumstances. （Source）

3The Financial Stability Board publishes a special report to explore the impact of large technology companies and cloud computing on financial stability

On December 2019, 12, the Financial Stability Board (FSB) released two reports:

BigTech in finance: Market developments and potential financial stability implications

Third-party dependencies in cloud services: Considerations on financial stability implications

The report points out that large technology companies and third-party cloud service providers can indeed bring many benefits to the financial industry, such as providing more, faster and more flexible service models and tools to promote financial inclusion and emerging markets, but they also bring liquidity, stability and cyber security threats, so regulators must be prepared to deal with these additional financial regulatory challenges. （Source）

 

European Union

1. The European Central Bank's legal digital currency PoC was exposed for the first time, and small transactions can be anonymous

On December 2019, 12, the European Central Bank (ECB) released its Exploring anonymity in central bank digital currencies report, outlining a proof of concept for anonymous central bank digital currencies that attempt to combine privacy with compliance. The plan was developed through Corda, a distributed ledger technology platform, and built on a proof-of-concept basis based on the technology. The core of this PoC project is to allow users who make small transactions to use anonymous tickets, so they do not need to disclose their identities, while larger transactions require AML/CFT checks. （Source）

2. EU: 30 recommendations for fintech regulation, innovation and financing

In June 2018, the European Commission set up an expert panel to review the applicability of existing EU laws and regulations to the fintech industry. On December 6, 2019, the panel completed its review and published a final report of the Expert Group on Regulatory Obstacles to Financial Innovation: 12 recommendations on regulation, innovation and finance). The panel pointed out that fintech is an ever-evolving industry, and future EU regulators should continue to uphold this multi-dimensional and collaborative regulatory approach and strive to maintain high standards of consumer protection, market integrity and financial system stability. To this end, the expert group specifically recommends bolder policy actions in the area of crypto assets and financial data, adjust the applicability of existing regulations, and keep up with the speed of market development. For example:

Head-on the challenges posed by new technologies (especially artificial intelligence and distributed ledger technologies) and their risks;

Establish a regulatory framework to ensure that the same regulatory rules are applied to activities that generate the same risks and ensure a fair and equitable market playing field;

Improve regulatory integrity, particularly in the area of customer due diligence (KYC), and reduce the threat posed by decentralized regulation to a level playing field in a fair playing market;

Crack down on the monopolistic behavior of large-scale vertically integrated platforms, maintain a market innovation environment, and provide consumers with more choices;

Adjust data supervision rules in a timely manner, and reasonably consider the impact of financial data and inclusive financial development on consumers.

In addition, the panel noted that international cooperation is also important in developing fintech regulatory standards and enhancing the interoperability of regulatory policies. （Source）

 

United Kingdom

1. The Bank of England plans to conduct climate risk stress tests for financial firms

On 2019 December 12, the Bank of England said it would stress test the financial risks posed by climate change over the next two years to understand the resilience of banks, insurers and the financial system to the current business models of climate risks. Compared with conventional macro-finance and insurance stress tests, climate risk stress tests appear later and have more challenges. To this end, the Bank of England has published a discussion paper seeking advice from experts (including financial firms, climate scientists, economists, other industry experts and informed stakeholders) on the design of stress tests. The deadline for comments is 18 March 2020. （Source）

2. The UK Financial Services Authority consults on how open finance can transform financial services

Based on the concept of "Open Banking", Open Finance provides users and enterprises with more investment and service channels through data sharing, which has a positive role in promoting the development of general insurance, cash savings and mortgage markets, which can effectively improve efficiency and encourage innovation. On December 2019, 12, the Financial Conduct Authority (FCA) launched a consultation on the industry opportunities presented by open finance, hoping to help the FCA better understand the market and consumer needs. The consultation closes on March 17, 2020, and feedback will be published in the summer of 3. Previously, the FCA also established an advisory group composed of industry experts, consumers, business representatives, academics and government departments to advise on the development of open finance. On 17 December 2020, the group also released a proposal document on open finance at the same time. （Source ）

　　3. 英国P2P监管新政正式生效

　　2019年6月，英国金融行为管理局（Financial Conduct Authority，简称FCA）发布P2P行业监管新政，并为相关企业预留了6个月的过渡整改期。2019年12月9日，这项新政就将正式生效。新政要求：1）除高净值投资者或资深投资者外，普通投资者最多只能将自身资产的10%进行P2P贷款投资；2）平台出现问题时，要实行逐步减少业务直至关停的业务步骤；3）加大对公司治理、风险管理和投资信息披露等方面的要求。Ratesetter首席执行官Rhydian Lewis认为，这将成为英国P2P行业的分水岭。（Source）

　　4. 英国央行行长受聘成为联合国气候行动与金融问题特使

　　2019年12月1日，英格兰银行行长Mark Carney正式被任命为联合国气候行动和金融问题特使，通过推动气候行动和改变气候资金来支持秘书长的气候战略，例如吸引更多私人资本进驻气候金融投资领域。Mark Carney自2013年开始担任英格兰银行行长。2018年，为给英国脱欧提供必要的支持和保障，Carney的任期被延迟到了2020年1月。Mark Carney一向对金融科技创新都保持支持态度。近日，他还提议创建一种由公共部门管理，并由多种中央银行数字货币支持的“合成霸权货币”（SHC）。这种数字货币有可能取代美元成为主要的储备货币。（Source）

 

法国

　　1.法国央行计划在2020年一季度测试数字货币

　　2019年12月4日，在法国审慎监管管理局（French Prudential Supervision and Resolution Authority，简称ACPR）举办的会议上，法国央行行长Fran?ois Villeroy de Galhau表示法国央行数字货币将于近期开始。不过，他同时告诫法国需要以“严肃、有条理的”方式试验此项新技术。此前，法国经济和财政部长Bruno Le Maire在欧盟议会上呼吁建立“公共数字货币”。Le Maire曾表示反对Facebook的天秤座项目，称如果该项目未能解决其对货币政策的潜在威胁，法国应当阻止该项目进行。（Source）

 

瑞典

1. The Riksbank and Accenture have partnered with Accenture to develop digital currencies

In recent years, the use of cash in Sweden has been declining year by year. In response to this problem, Riksbank launched the central bank's digital currency research project in the spring of 2017, hoping to provide Swedish residents with a state-guaranteed digital means of payment. Sweden's central bank recently announced that it is ready to sign a one-year "e-krona" pilot agreement with Accenture to try to provide a user interface for electronic payments through bank cards, smartphones and wearables. The agreement will start with one year and will be adjusted later according to the Riksbank plan for up to seven years. However, the Riksbank has made it clear that it is only an experimental study, but the agency has not yet made a final decision on whether to launch an "electronic krona". （Source）

 

Denmark

1. The Danish government sends a tax notice to cryptocurrency holders

In early December 2019, a number of Danish cryptocurrency users received a letter from the Danish tax authority Skattestyrelsen (hereinafter referred to as Skat), requesting comprehensive information on cryptocurrency transactions from fiscal years 12 to 2016, including the exchange rate of each transaction, information on the purpose of obtaining cryptocurrency, documents related to creating a cryptocurrency wallet, and screenshots of participation in cryptocurrency exchange activities (including personal names and account creation agreements). In addition, Skat also wants to check the bank account statements of cryptocurrency holders during the said time. The deadline for submission of the above materials is December 2018, 2019, and those who fail to provide information within the deadline will face fines.

In 2018, Skat "identified" 2700,2019 cryptocurrency holders who were required to pay Bitcoin gains tax through inspections and prepared to confirm and follow up on the tax payments. In January 1, the Danish Tax Commission authorized Skat to obtain information about all cryptocurrency transactions on three domestic cryptocurrency exchanges. At the time, tax authorities planned to make the first adjustments to the tax treatment of specific cases by the summer of 2019 based on newly obtained information, and the amendments would include whether the transactions of individual traders or businesses need to be included in their taxable income. （Source）

 

United States

1. The Office of the Comptroller of the Currency again appealed the FinTech license

Since the end of 2016, the Comptroller of the Currency (OCC) has published a feature article exploring the issuance of a national special banking license for fintech companies. In July 2018, the OCC announced that it would allow fintech companies to apply for this license. However, two months later, a federal judge named Victor Marrero said that under the National Banking Act, only deposit-taking companies can obtain a national bank license, so he ruled that OCC did not have the authority to issue special national banking/fintech licenses to non-banking institutions. Recently, the OCC has appealed this decision to the U.S. Second Circuit. （Source）

2. The Fed opens a new Twitter account to highlight academic research

On December 2019, 12, the Federal Reserve announced the opening of a new Twitter account, @FedResearch. It is reported that this new account will focus on introducing and publishing working papers, policy watches, special reports, discussion papers, etc. of more than 18 economists and researchers of the Federal Reserve, expanding the scope of researchers' views. The previous @FederalReserve will remain and will be mainly responsible for releasing official Fed news and information. （Source）

3. To support financial innovation, the Federal Reserve opened a FinTech Dialogue mechanism

On December 2019, 12, the Federal Reserve Board announced that it will conduct a series of "fintech innovation office hours" in 17. Through this mechanism, banks, start-ups and Fed staff meet one-on-one to discuss fintech developments and problems. The Fed believes that such an openness policy will help both community banks and their potential fintech partners. The Dialogue will be co-hosted by the Federal Reserve and Local Reserve Banks, with the first event taking place at the Federal Reserve Bank of Atlanta on February 2020, 2020. In addition, the Fed has also opened a fintech innovation content section on its official website, summarizing fintech regulatory opinions through the Federal Reserve's Consumer Compliance Supervision Bulletin and providing information for fintech market participants. （Source）

4. The U.S. Securities and Exchange Commission held a special meeting to discuss changes to the definition of "accredited investor"

On December 2019, 12, the U.S. Securities and Exchange Commission (SEC) held a public meeting on the topic of discussing the definition of the investor group "accredited investor." Some market analysts believe that the current way of defining investors by wealth criteria lacks effectiveness and ignores the value of investors' investment experience and acumen. The meeting was broadcast live on the SEC website during the same period. （Source）

The New York Department of Financial Services (NYDFS) plans to update the terms of the BitLicense for the first time in 5 years

On December 2019, 12, the New York State Department of Financial Services (NYDFS) posted proposed guidelines on the adoption or issuance of virtual currencies on its website, inviting all interested parties and the public to comment by January 11, 2020. The newly proposed guidelines relate specifically to BitLicense. This is a major cryptocurrency business license that defines operational rules regarding cryptocurrencies, asset management, administration, and more. This new guidance includes two major updates to the process for New York State cryptocurrency-related businesses to launch new coins:

· NYDFS will provide a list of currencies that businesses can do without prior permission from the agency to conduct business activities related to these virtual currencies.

Propose a framework for listing templates that could be implemented to create a specific currency list or adoption policy.

The NYDFS notes that if approved, the guidelines would allow for the listing or adoption of new coins capable of self-certifying in addition to the currencies listed in Proposal 1. （Source）

6. The five major U.S. financial regulators issued a joint statement supporting the use of alternative data

On December 2019, 12, the Federal Reserve Board, the U.S. Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the National Credit Union Administration and the Office of the Comptroller of the Currency issued a joint statement on the use of "Alternative Data." The statement noted that the aforementioned institutions are aware that banks and non-bank financial companies (collectively, the "Company") are using, or are considering the use of, alternative data in credit underwriting, fraud detection, marketing, pricing, services, and account management. This statement focuses on the consumer protection implications of the use of alternative data in the credit underwriting process, highlighting the potential benefits and risks. The five agencies said that the use of alternative data can indeed improve the speed and accuracy of credit decisions, help companies assess the creditworthiness of consumers who currently do not have access to credit in the mainstream credit system, and enable consumers to obtain more products and/or better pricing/terms based on enhanced assessments of repayment ability. These innovations reflect the evolving nature of automated underwriting and credit scoring models with the potential to reduce the cost of credit and increase access to credit. A well-designed compliance management program provides a comprehensive analysis of relevant consumer protection laws and regulations, with appropriate testing, monitoring, and management, to ensure that companies understand opportunities, consumer protection risks, and other compliance requirements before using alternative data. （Source）

7. The SEC appoints the head of the Cyber Enforcement Division

On December 2019, 12, the U.S. Securities and Exchange Commission (SEC) announced the appointment of Kristina Littman as head of cyber law enforcement to prevent cyber-related misconduct and protect investors and the market. Since August 2, Littman has served as a senior advisor to SEC Chairman Jay Clayton, where he focuses on enforcement and committee adjudication. She also advises on regulatory policies related to cryptocurrencies and digital assets, international affairs, trading and markets, and investment management. （Source）

 

Canada

1. Bank of Canada: It has not yet decided whether to issue a digital currency, and next year will focus on emerging payment technologies such as stablecoins

On December 2019, 12, Bank of Canada Governor Stephen Poloz delivered a year-end speech focusing on inflation, population growth, monetary policy and other issues affecting the structure of Canada's economy. Speaking about the impact of digitalization and the future of money, Poloz said that Canada has not yet reached a final opinion on the issuance of digital currency, but the emerging industry will still affect Canada's financial regulatory policies in the coming year. Currently, the Bank of Canada is working with payments company Payments Canada to modernize its core payments system. In addition, the Bank of Canada has been researching innovations through technology sandboxes. （Source）

 

Korea

1. Korea Open Bank officially launched

On December 2019, 12, the Financial Services Commission (FSC) and the Korea Financial Telecommunications & Clearings Institute jointly held an event to announce the official launch of Korea's open banking system. On October 18, 2019, the Korean Open Banking System began trial operation, with a total of 10 banks participating. During the trial phase of the system, a total of about 30.10 million users registered 310.773 million open bank accounts. In the future, the South Korean government will update regulations by amending the Electronic Financial Transactions Act to expand the scope and functions of open banking services. （Source）

2. Toss Bank received the third Internet banking license in Korea

From December 2019 to 12, 12, the Financial Services Commission (FSC) of Korea conducted an audit of the third batch of Internet banking license applicants. A total of three institutions submitted applications this time, and the FSC set up an evaluation committee to review the work. Among them, Familia Smart Bank submitted its withdrawal application before the start of the evaluation committee review on December 14. According to the results of the review, the third chapter of South Korea's Internet banking special license finally "spent" Toss Bank. The evaluation committee found that its business plan demonstrated sufficient innovation, inclusiveness and stability. It is reported that Toss Bank has obtained a preliminary license, and the agency plans to start operations within 12 months after obtaining final approval. Another applicant, Soso Smart Bank, was not competitive enough in terms of financing scale and business plan, so it failed to pass the review. （Source）

3. The South Korean government plans to tax capital gains from virtual currency transactions

On December 2019, 12, South Korea's Ministry of Economy and Finance officials said that the government is discussing taxing capital gains from virtual currency transactions and plans to push for tax regulations changes in the first half of 8, according to local media reports. Currently, a bill to improve the transparency of virtual asset transactions is still awaiting review by South Korea's National Assembly. Once approved, the bill will enter into force one year after its enactment. However, for now, regardless of whether the bill is passed or not, the South Korean government is trying to impose a capital gains tax on virtual currencies. However, the South Korean government also needs to determine whether to classify such gains as stock trading gains. If this is the case, the government must obtain relevant transaction records from virtual currency exchanges before imposing taxes. Unlike stock prices, the price of virtual currencies varies from exchange to exchange, so determining the market price of a trading point is more complicated. In addition, the Virtual Asset Exchange Act requires virtual currency exchange operators to identify traders and keep separate records for each trader. （Source）

4. South Korea: 2020 key tasks for fintech development in 24

On December 2019, 12, the Financial Services Commission (FSC) of Korea announced that it would vigorously promote the large-scale development of the fintech industry and launched 4 measures in different areas, covering 8 key tasks. These include: improving the current regulatory sandbox system, implementing regulatory reforms to promote fintech development, lowering the barrier to entry in the financial industry, establishing a regulatory foundation for the digital age, developing new growth engines for financial innovation, promoting fintech investment and establishing a venture capital ecosystem with private sector investment as the core, assisting fintech companies to expand overseas and expanding public sector support for fintech companies. （Source）

 

India

1. The Reserve Bank of India is about to launch its central bank digital currency program

This week, Reserve Bank of India (RBI) Governor Shaktikanta Das said at a press conference that India has launched its own central bank digital currency research program. He said that the issuance of currency is a sovereign act and cannot be completed by private institutions. At present, the technology related to central bank digital currency is still in its early stages, and discussions and development are still ongoing. There is no clear timeline for when India will launch the "digital rupee". （Source）

2. The Reserve Bank of India raises the cap on lending funds in the P2P sector

On December 2019, 12, India's central bank, the Reserve Bank of India (RBI), announced that in order to promote the development of the P5P industry, the total amount of investment allowed by fund lenders will be increased to 2 million rupees in the future. Secondly, lenders who invest more than Rs 500 on a P2P platform should obtain and issue a minimum net worth certificate from a practicing chartered accountant with a minimum net worth of Rs 100 million on the P2P platform. In addition, all lenders should submit a statement to the P500P platform informing them that they are aware of all the risks associated with lending transactions. （Source）

 

Singapore

1. The Singapore Digital Bank documents are updated and the relevant applications close at the end of this month

In June 2019, the Monetary Authority of Singapore (MAS) announced that it would allow applications for digital banking licenses. Applications open in August 6 and the deadline is December 2019, 8. It is reported that this MAS will issue 2019 digital bank licenses in batches and phases, including 12 fully virtual bank licenses and 31 digital wholesale bank licenses, and the application results will be announced in 5. On December 2, 3, MAS released the second Frequently Asked Questions (2020nd set of FAQ) on digital banking license applications, covering application form filling, institutional and personnel structure, etc., hoping to help applicant enterprises clarify the application steps at the final stage. （Source）

 

Australia

1. Questioning cybersecurity, Australia's open banking reform was delayed for six months

The Australian Competition and Consumer Commission (ACCC) said Australia's open banking reforms would be delayed for six months as "technical issues" led the government to raise concerns about the cybersecurity environment. In addition, the effective date of the first revision of Australia's Consumer Data Right (CDR) has been postponed from February 2020 to July 2. This means that Australian fintech startups have to wait at least 2020 months for data that bank users legally share and authorise. It is reported that the ACCC has previously selected a total of 7 startups to participate in the country's open banking test. （Source）

2. The Australian Securities and Investments Commission releases the 18-19 Regulatory Technology Research Report

The Australian Securities and Investment Commission (ASIC) has long recognised the development of Regtech. In August 2018, ASIC received funding from the Australian Federal Government to take this opportunity to promote compliance issues such as risk management in the financial services industry and establish Australia as a world-leading RegTech hub. To this end, ASIC conducted 8 dedicated studies in 2018-2019 to test the potential of improving corporate compliance by selecting RegTech areas that are just starting or in development rather than already mature. The tests focus on financial marketing materials (traditional and non-traditional), financial advice, speech analysis and speech-to-text conversion, and technology-assisted coaching tools. On December 4, 2019, ASIC released a special report (ASIC's Regtech Initiatives 12-20) for these four studies in 18-19, fully affirming the ability of the above technologies to assist enterprises in completing compliance tasks. In the next year of the RegTech study, ASIC will focus on digital record storage in financial services and structured financial information for listed companies. （Source）

 

South Africa

1. South Africa drafts new regulations to strengthen cryptocurrency controls

Since 2014, South Africa's financial regulator has been working on cryptocurrencies. Kuben Naidoo, deputy governor of South Africa's Reserve Bank (hereinafter referred to as Sarb), said on December 2019, 12 that Sarb is drafting a new regulation on cryptocurrency controls, which is expected to take effect in the first quarter of 2. According to local media reports in recent weeks, several major South African banks, including FNB and FirstRand, have planned to close business accounts of cryptocurrency exchanges and intermediaries in March 2020. In addition, Sarb also wants to ensure that cross-border fund transfers via cryptocurrencies also comply with South Africa's current cross-border fund transfer requirements, such as allowing each South African citizen to transfer up to R2020 million (about US$3,1100) per year abroad. （Source）