Regulatory Updates

ESG Regulation EU 2020/852 (EU Taxonomy): Regional Initiative. Global Impact. Looming Deadline.

The UMR-driven FX clearing environment.
The introduction of Uncleared Margin Rules (UMR) significantly impacted the foreign exhange (FX) clearing world. It substantially increased trading costs for uncleared derivatives and thus, accelerated the expansion of clearing programs globally.

The issuance in March 2022 of a discussion paper on the APRA Comprehensive Data Collection program came as no surprise to APRA watchers/and regulated authorized deposit-taking institutions (ADI). The Australian Prudential Regulation Authority has long been voicing its intent to realize significant objectives including to

The Basel reforms are now just over the horizon for Canada. Under the new framework, many banks will face significant changes to RWA and capital ratios, and lower return on equity; they need to prepare now. Basel IV can be a strategic opportunity for firms implementing new rules, if they can get their response to the technical and functional challenges right.

The Swiss Financial Market Supervisory Authority (FINMA) has set out requirements for selected Swiss entities to begin parallel reporting runs in January 2023. The FINMA and Swiss National Bank (SNB) revisions reflect the final round of the internationally agreed-upon final Basel III (aka Basel IV) reforms for credit, market, operational, leverage, and liquidity risk management, capital requirements, and the related disclosure guidelines.

Effective on January 1, 2023, BACEN’s Resolution 229 poses challenging requirements that impact the way financial institutions currently calculate credit risk and how they report it. In March 2023, all banking segments must include its new requirements in their DLO submissions. Although all BACEN-regulated banks are affected, the most significant impact is on the largest banks (Segments 1-3).

With its long-expected Rewrite (DFA Parts 43 and 45), the CFTC aims to bring the US market into alignment with harmonized critical OTC derivatives data elements. Where this Rewrite is heading, so follows the EMIR Refit, and it is anticipated that the rest of the global regimes will follow suit, quickly reflecting CFTC and EMIR changes.