US
The Office of the Comptroller of the Currency (OCC) Issues Federal Register (2024-06594) Regarding Revised Bank Activities and Operations Collections
The OCC issued a Federal Register requesting comment on a number of collections under “Bank Activities and Operations: Investment in Bank Premises”. The on occasion or quarterly collections under review (comment period ending 4/29/2024) include the following: Investment in National Bank/Federal Savings Association Premises, Sale of Money Orders at Nonbanking Outlets, Tax Equity Finance Transactions, Payment Systems, Derivatives Activities, Corporate Governance Procedures, State Corporate Governance, Indemnification of Institution-Affiliated Parties-Written Agreement Required for Advancement and Issuing Stock in Certificate Form.
The U.S. Treasury Department Issues Report on Managing Financial Sector Artificial Intelligence (AI) Risks
The U.S. Department of the Treasury issued the report “Managing Artificial Intelligence-Specific Cybersecurity Risks in the Financial Sector,” which includes an overview of current AI use cases, trends in terms of threats and risks, best-practice recommendations, and challenges and opportunities. The interview participants include representatives from the financial services sector, information technology (IT) firms, data providers, and anti-fraud/anti-money laundering (AML) companies. Interview participants generally agreed that the safe adoption of AI requires cross-enterprise collaboration among model, technology, legal, compliance, and other teams, which presents other challenges.
Global
International Accounting Standards Board (IASB) Webcast Outlining Upcoming Standard (IFRS 18) on Financial Statements
The IASB published a webcast giving a technical team overview of the forthcoming IFRS 18 Accounting Standard, “Presentation and Disclosure in Financial Statements”. IFRS 18 will set out overall requirements for presentation and disclosures in response to investor demand for better information on firms’ financial performance, specifically in profit and loss (income) statement presentation. It will affect all companies and investors. The 11/15/2023 update meeting included agreement/finalization on aspects of IFRS 18, in particular, sweep issues related to subtotals and categories, aggregation and disaggregation, as well as other topics. The IASB expects to issue IFRS 18 on April 9, 2024.
The Bank of International Settlements (BIS) Basel Committee Issues Working Paper: Pre-Publication Revisions of Financial Statements
The Basel Committee issued a working paper entitled “Pre-Publication Revisions of Bank Financial Statements: A Novel Way to Monitor Banks?”, which analyzed the frequency and the severity of revisions banks made prior to publishing their financial statements. The Committee concluded that revisions may contain forward-looking insights into bank risk, potentially offering early indicators of future problems. The study focused on the flow of private information from banks to supervisors. It showed that 78% of all revisions occur before publication of bank financials and frequency of revisions tend to exhibit higher risk levels in the future, as measured by certain indicators (i.e., CAMELS ratings).
Canada
FATCA reporting: On April 5, 2024, the CRA published updates to the "Guidance on the Canada-U.S. Enhanced Tax Information Exchange Agreement. Part XVIII of the Income Tax Act."
“Summary of published changes:
Chapter 5: The First Home Savings Accounts (FHSA) will be added to the list of the excluded accounts and shouldn’t be reviewed, identified, or reported.
Chapters 9 and 10: GIIN alone is not considered sufficient to determine whether an entity account holder is a specified U.S. person.”
Common Reporting Standard (CRS): On April 5, 2024 the CRA published updates to the "Guidance on the Common Reporting Standard. Part XIX of the Income Tax Act."
“Summary of published changes:
Chapters 9 and 10: GIIN alone is not considered sufficient to determine whether an entity account holder is a specified U.S. person. Therefore, the Canadian financial institutions should consider taking additional steps to reasonably determine the account holder’s status.”