RegTech Intelligence

RegRoundup 23 May: Locking down cyber-security

In a week which has seen cyber-risk cement itself on the agendas of regulators across the world, we’ve witnessed action in the trading space with plenty of developments occurring in Europe’s markets in financial instruments’ overhaul, as well as a concerted effort to rethink the way in which regulations and regulators work in the financial services industry.


In MiFID II and MiFIR news, we have seen a final agreement being reached by the Permanent Representatives Committee (COREPER) on behalf of the European Council, confirming a one-year extension to the deadline for Member States to transpose MiFID II into national legislation, thereby making the new deadline 3 July 2017.  It also confirmed that the date of application of both MiFID II and MiFIR would be set for 3 January 2018.  On 18 May, the Commission adopted two delegated regulations supplementing MiFIR and MiFID II.  The first delegated regulation supplements MiFIR with regard to definitions, transparency, portfolio compression and supervisory measures on product intervention and positions, while the second appends MiFID II in the area of regulatory technical standards for the ratio of unexecuted orders to transactions in order to prevent disorderly trading conditions.

The Payment Systems Regulator (PSR) has issued its final guidance on the designation of alternative switching schemes under the Payment Accounts Regulations 2015.  It includes guidance on the PSR’s powers and processes under the regulations and advice on penalties for non-compliance.


There has been an exciting new FinTech development with HM Treasury announcing that a new FinTech Bridge will be established between the UK and Singapore.  The aim is to help UK FinTech firms and investors gain access to the Asian market and allow expansion to Singapore, as well as attracting Singaporean FinTech companies and investors to the UK.  The agreement will enable the regulators to refer FinTech firms to their counterparts across the globe and represents a major milestone for both the UK and Singapore.

The European Commission has published a summary of contributions received in response to its call for evidence on the impacts of EU financial regulation.  Some of the comments included references to the burden of MAR on SMEs, possible barriers of the potential financial transaction tax and the negative implications of the liquidity coverage ratio.

Along with the Commission’s insight into the effectiveness of the European regulatory space, the US Government Accountability Office is also conducting research into whether US regulators are working together collaboratively and sharing sufficient information in order to help prevent another economic crisis.  While it does not have regulatory powers, this GAO report could be influential in effecting change to the way in which certain regulators, including the Commodity Futures Trading Commission, Securities and Exchange Commission, the Office of the Comptroller of the Currency, etc., operate in relation to each other.

The European Central Bank (ECB) has launched its second public consultation on harmonising options and discretions available in Union law.  It addresses eight options and discretions to add to the existing guide of 115 options and discretions and the consultation period closes on 21 June.


Cyber-security has been a hot topic over the past few weeks.  This week alone has seen the US Commodity Futures Trading Commission outlining its intention to focus on protecting against cyber-attacks in the industry as leading stakeholders struggle to protect against breaches or attempted breaches into customer data.  European Union institutions have also been active in this area with the Council formally adopting new rules to step up the security of network and information systems across the EU, and the European Central Bank introducing a real-time cyber-attack alert system across all Eurozone banks.  As the Bank of England’s Chief Information Security Officer (CISO), Will Brandon, said in a recent speech on the topic:

Cyber risk is one of many risks.  It is certainly serious, but it can be understood, and it can be quantified.  So it needs to be managed like anything else that could damage a firm’s business.”

The PRA have released a Consultation Paper looking at Pillar 2 liquidity with a specific focus on intraday risk, debt buyback and non-margined derivatives.  It provides an overview of planned future work to develop the Pillar 2 approach and requests specific feedback from interested parties.  The consultation closes on Friday 12 August 2016.

In other publications this week, the European Parliament have released the adopted text extending exemptions for commodity dealers under CRR.

Financial crime

The Queen’s speech this week included plans to introduce a criminal finances bill which aims to reform the proceeds of crime legislation and allow the government to recover more illicit income.  The bill will make it a criminal offence for corporations who fail to stop their staff facilitating tax evasion and enforcement agencies will be given stronger powers to help prevent criminal activities in the financial services sector.

Last week we saw a record sentence handed out to Martyn Dodgson, a senior investment banker, in a case brought by the FCA which takes the total number of convictions in the Operation Tabernula insider dealing investigation to five.  This week, we also witnessed the FCA imposing a lifetime ban on Peter Johnson, who was the former compliance officer of Keydata Investment Services Ltd., from performing any regulated financial activity.  It was found that Johnson failed to act with integrity in his role and directly misled the Financial Services Authority (FSA) on a number of occasions.

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