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Regpulse Newsletter October 30 – November 13, 2020

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Regpulse Newsletter October 30 – November 13, 2020 Financial Services RegPulse Newsletter October 30 – November 13, 2020 Recent developments › FRB publishes its Financial Stability Report, highlighting climate risks for the first time › The Financial Stability Board releases its 2020 GSIB list › OCC and FRB release their semiannual supervisory and regulatory reports › FRB, OCC, and FDIC release a white paper outlining sound principles for operational resiliency › The Financial Stability Board releases white paper on managing third-party data risks › The Congressional Oversight Commission releases its sixth report on the FRB’s emergency leading facilities Regulatory Roundup | Deloitte Center for Regulatory Strategy, Americas 1 Introduction The Deloitte Center for Regulatory Strategy (DCRS) is a source of critical insight and advice, designed to help clients anticipate change and respond with confidence to the strategic and aggregate impact of national and international regulatory policy. The RegPulse Newsletter is a bi-weekly distribution that features the latest regulatory news and issues that are impacting the financial services and fintech industries. For a deeper analysis and discussion of regulatory developments, make sure to check out our RegPulse blog series, which are a collection of blogs that are contributed by our powerful team of former regulators, industry specialists, and trusted business advisors. US regulatory developments Congress Derivatives Banking & Capital Markets Investment Management Consumer Protection Insurance BSA/AML Fintech EMEA regulatory developments Featured DCRS content Key: Cross-sector The development covers multiple financial services sub-sectors or other industries. FBO The development pertains to or affects foreign banking organizations (FBOs). Blog/POV The development has been covered or is currently being analyzed by our team to be produced into either a RegPulse blog or broader point of view (POV). For more information, please refer to the featured DCRS content section. Regulatory Roundup | Deloitte Center for Regulatory Strategy, Americas 2 US regulatory developments Congress House and Senate Committees hold hearings on the Senator Sherrod Brown releases statement on the oversight of prudential regulators during the CFPB’s debt collection rule pandemic On October 30, 2020, US Senator Sherrod Brown (D-OH) On November 10, 2020, the Senate Banking Committee – ranking member of the US Senate Committee on met remotely on a hearing entitled "Oversight of Banking, Housing, and Urban Affairs – released a Financial Regulators.“ On November 12, 2020, the House statement after the CFPB released their final debt Financial Services Committee convened for a virtual collection rule. hearing entitled "Oversight of Prudential Regulators: Ensuring the Safety, Soundness, Diversity, and Source: US. Senate Committee on Banking, Housing, and Urban Affairs Accountability of Depository Institutions during the Pandemic.“ Source: US House Committee on Financial Services Banking & Capital Markets FSB releases its 2020 GSIB list NY Fed’s Kevin Stiroh speaks on the microprudential perspective of climate risks On November 11, 2020, the Financial Stability Board (FSB) released the 2020 list of global systemically On November 9, 2020, Federal Reserve Bank of New important banks, using end-2019 data and an York Executive Vice President Kevin Stiroh delivered a assessment methodology designed by the Basel speech entitled "A Microprudential Perspective on the Committee on Banking Supervision. Financial Risks of Climate Change" at the 2020 Climate Risk Symposium. Source: Financial Stability Board Source: Federal Reserve Bank of New York Vice Chair Randal Quarles testifies on the FRB’s FSB publishes discussion paper on third-party risks Supervision and Regulation report On November 9, 2020, the FSB published a discussion On November 10, 2020, the Federal Reserve Board (FRB) paper titled "Regulatory and Supervisory Issues Relating Vice Chairman for Supervision Randal K. Quarles testified to Outsourcing and Third-Party Relationships" for public on recently published Supervision and Regulation Report, consultation. The discussion paper draws on findings before the Committee on Banking, Housing, and Urban from a survey conducted among the FSB members. Affairs. Source: Financial Stability Board Source: Federal Reserve Board FRB releases periodic report on lending facilities OCC reports key risks and effects of pandemic on the US federal banking system On November 6, 2020, the FRB released its periodic report on outstanding lending facilities authorized by the On November 9, 2020, the Office of the Comptroller of Federal Reserve Board. the Currency (OCC) reported the key issues facing the federal banking system and the effects of the COVID-19 Source: Federal Reserve Board pandemic on the federal banking industry in its Semiannual Risk Perspective for Fall 2020 Federal agencies issue statement on reference rates for loans as part of LIBOR transition Source: Office of the Comptroller of the Currency FRB publishes its Financial Stability Report, On November 5, 2020, the OCC, the FRB, and the highlighting climate risk for the first time Federal Deposit Insurance Corporation (FDIC) issued a statement reiterating that the agencies do not endorse a On November 9, 2020, the FRB published its Financial specific replacement rate for the London InterBank Stability Report, which summarizes the Board’s Offered Rate (LIBOR). framework for assessing the resilience of the U.S. Source: Office of the Comptroller of the Currency financial system and presents the Board’s current assessment. Source: Federal Reserve Board Regulatory Roundup | Deloitte Center for Regulatory Strategy, Americas 3 US regulatory developments (continued) Banking & Capital Markets (continued) BSA/AML The Basel Committee releases its report on FinCEN issues advisory on the Financial Action implementation of Basel III regulatory reforms Task Force-identified jurisdictions with anti-money laundering, combating the financing of terrorism, On November 3, 2020, the Basel Committee released a and proliferation deficiencies report entitled "Implementation of Basel Standards: A Report to G20 Leaders on the Implementation of the On November 6, 2020, the Financial Crimes Enforcement Basel III Regulatory Reforms." Network (FinCEN) issued an advisory to inform financial institutions of updates to the FATF list of jurisdictions Source: Bank for International Settlements with strategic anti-money laundering and combating the financing of terrorism (AML/CFT) and counter- Congressional Oversight Commission releases its proliferation financing deficiencies sixth report on the emergency leading facilities Source: Financial Crimes Enforcement Network On November 2, 2020, the Congressional Oversight Commission released its sixth report on the implementation of the Main Street Lending Program by the Federal Reserve Board and the Treasury. Source: US Congressional Oversight Commission Federal agencies release paper on operational resilience On October 30, 2020, the FRB, the FDIC, and the OCC released a paper outlining sound practices designed to help large banks increase operational resilience that are drawn from existing regulations, guidance, statements, and common industry standards. Source: Federal Reserve Board The FRB updates terms for its Main Street lending program On October 30, 2020, the FRB updated the terms of the Main Street Lending Program to better target support to smaller businesses that employ millions of workers and are facing continued revenue shortfalls due to the pandemic. Source: Federal Reserve Board Investment Management SEC Commissioner Allison Herren Lee speaks on climate change risk in financial services On November 5, 2020, SEC commissioner Allison Herren Lee delivered a speech titled "Playing the Long Game: The Intersection of Climate Change Risk and Financial Regulation". Source: Securities and Exchange Commission SEC Chairman Jay Clayton speaks on the Exempt Offering Framework On November 2, 2020, SEC chairman Jay Clayton spoke on harmonizing, simplifying, and improving the Exempt Offering Framework and how it can benefit small and medium-sized business and their investors. Source: Securities and Exchange Commission Regulatory Roundup | Deloitte Center for Regulatory Strategy, Americas 4 EMEA regulatory developments Banking & Capital Markets • UK Parliament - The House of Lords EU Services Sub- Committee invited contributions to its ongoing enquiry • Financial Conduct Authority (FCA) - The FCA into FS after Brexit. Read more here. submitted further proposals to support consumer credit borrowers affected by COVID-19 in light of the second • Bank for International Settlements (BIS) - BIS lockdown. Read more here. published a report which summarizes the progress of member jurisdictions in implementing the Basel III • FCA - FCA proposed to extend the availability of payment standards, and summarizes the outcomes of the BCBS' deferrals to support borrowers who are experiencing Regulatory Consistency Assessment Programme (RCAP). payment difficulties because of COVID-19 following Read more here. updates in June and September. Read more here. • European Securities and Markets Authority (ESMA) • FCA - FCA published its approach to the Share Trading - ESMA published a report, which assesses the Obligation (STO), assuming mutual equivalence is not circumstances leading to Wirecard's collapse and agreed. Read more here. evaluates the supervisory response by BaFin and the German Financial Reporting Enforcement Panel (FREP).
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