In our weekly regulatory roundup we give a brief overview of the most recent regulatory news and developments in the financial services sector. Courtesy of our partner firm, RegAlytics.ai.
- SEC: Regulatory Agenda
The Office of Information and Regulatory Affairs released the Spring 2021 Unified Agenda of Regulatory and Deregulatory Actions. The report, which includes contributions related to the Securities and Exchange Commission, lists short and long-term regulatory actions that administrative agencies plan to take. Notable areas of focus for the SEC’s regulatory agenda include disclosure relating to climate risk, human capital, including workforce diversity and corporate board diversity, and cybersecurity risk.
- SEC Rule List
- Third Party Services, Gamification and Fraud for SBS
The report also includes plans for new rules on Third Party Service Providers, Gamification, and Fraud rules for Security-Based Swaps.
- Climate Change Disclosures and Corporate Board Diversity
The report highlights that Climate Change Disclosure and Corporate Board Diversity are at the Proposed Rule Stage.
Some dissenting commissioners are upset about omissions from the list, including clarity for digital assets, and rules for gig economy workers.
Additionally, changes that came out last year are now up for renegotiation.This includes ‘proxy voting’ and the ‘definition of accredited investor’. Renegotiation is now open for these topics despite the fact that they have endured substantial public scrutiny and that there is general understanding throughout the industry that the current rules strike a nice balance between protecting investors and creating a free market.
- Developments in Digital Currency
- International Experiment: CBDCs for Cross Border Settlement.
A heavyweight set of European players announced an experiment using wholesale central bank digital currencies for cross border settlement. These players include: the Swiss National Bank, the Banque de France, the BIS Innovation Hub and a private sector consortium led by Accenture that includes Credit Suisse, Natixis, R3, SIX Digital Exchange and UBS.
- A Senate hearing on Digital Currencies was held on June 09, 2021.
The hearing provided an interesting array of political perspectives on crypto and digital currencies in general. During the hearing Senator Warren (D) called crypto a “lousy way to buy and sell things…a lousy investment… [and] a haven for illegal activity.”
Senator Sherrod Brown (D), said CBDCs and the digitization of payments could help poorer Americans become a part of the financial system. He stressed the importance of competing with other countries and said the United States must “lead the way”.
Pat Toomey (R) said we should encourage the development of private digital currencies while remaining hesitant about central bank digital currency. Toomey also wrote a letter to the Treasury urging it to reconsider a recent crypto proposal by FinCEN related to the regulation and oversight of cryptocurrencies. Toomey is worried that the transparency requirements will cause bad actors to go further underground and avoid using financial institutions all together. There is a sense that Republicans want crypto to stay private and Democrats want it to become more transparent.
- Basel: Prudential Treatment of Bank Crypto Asset Exposure.
In other crypto news, the Basel Committee on Banking Supervision issued a public proposal for the prudential treatment of banks’ crypto asset exposures.
- State-Chartered Banks Can Custody Crypto
Finally in State news, the Texas Department of Banking now officially allows Texas state-chartered banks to provide custody services for virtual currency.
We’ll be updating the blog weekly with regulatory updates. Stay connected to learn more.