CFTC on Future Crypto Legislation
CFTC released a keynote address by Commissioner Christy Goldsmith folowing the collapse of FTX. Goldsmith discussed the crisis of trust in the crypto market and necessary legislation based on lessons learned from FTX, as well as proactive steps the sector should take. Goldsmith supports Congress enacting a comprehensive statutory framework throughout the federal government that would require customer protections, instilling market integrity, closing regulatory gaps, and reducing regulatory arbitrage. To achieve it, the resolution of conflicts of interest with respect to insiders and affiliated entities and a ban on commingling customer assets with company assets is needed.
C-OSFI Life Insurance Capital Guidelines
C-OSFI issued clarifications to the 2023 Life Insurance Capital Adequacy Test (LICAT). Clarifications and adjustments address topics of volatility adjustments, owner-occupied property, cryptocurrency assets, and capital composition and limitations. Tax adjustments and amounts recoverable related to negative reserves under unregistered reinsurance should be included in specified items for first capital composition limit. Life insurers must apply the guideline for annual reporting periods from January 1st, 2023.