IA Fintech Member Insights: Clausematch 

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Good morning!

I hope you had a great weekend.🍁

In this week’s edition of the RegTech X, you’ll find plenty of news in relation to major financial regulators across the world. In Europe, the European Securities and Markets Authority has recently published the results of a peer review, while in the US, the Securities and Exchange Commission is cracking down on cryptocurrency token sales.

Aside from regulatory news, RegTech features heavily in this week’s digest. I’m excited to announce that ClauseMatch is now working with a large Italian bank Intesa Sanpaolo.

You’ll also find the latest developments in relation to crypto regulation, regulatory fines, and money laundering, as well as a good podcast on Volcker rule revisions.

Read on to find out more! ☕

Cheers,

Evgeny

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Regulator UK 

The Financial Conduct Authority (FCA) has begun meeting junior staff at London’s biggest investment banks in an effort to improve conduct within the capital’s financial industry. The regulator has so far met junior employees from 16 investment banks, including JPMorgan, Citi and Barclays. The move comes after the FCA said recently that non-financial misconduct had emerged as a “significant concern.” (FN Financial News) 2 mins

The FCA has said that traders and research analysts across London are continuing to flout conflict-of-interest policies by trading in personal accounts, despite efforts to ban such behaviour. The regulator warned that it will crack down on firms that fail to stop this behaviour. (Bloomberg) 2 mins

The chief executive of the FCA, Andrew Bailey, has warned that there is not enough transparency in the process it follows to request powers from the government to allow it to act outside of its current regulation. Bailey said there could be a more “structured and transparent approach” for identifying and engaging with HM Treasury on perimeter changes. (FT Adviser) 2 mins

Users of the FCA’s data collection system, Gabriel, have suggested ways that the platform could be improved. Based on the feedback, users want to see improvements in system speed, support when accessing it, the layout of schedules, and viewing previous data submissions. (Money Marketing) 2 mins

The FCA could improve the way it monitors off-exchange derivatives trades to spot potential risks, according to the European Securities and Markets Authority (ESMA). A review by ESMA revealed that aspects of the FCA’s data checking and analysis processes need improvement. (Reuters) 2 mins

The Queen’s Speech, which took place on 14 October, laid out UK prime minister Boris Johnson’s Financial Services Bill. The bill aims to bring certainty, stability, and new opportunities to the UK banking industry and ensure that the UK maintains its world-leading regulatory standards in finance and FinTech. (FinTech Futures) 2 mins

European Economic Area (EEA) firms will no longer be able to passport into the UK after Brexit. To continue to do business in the UK, they will need to notify the FCA and enter its Temporary Permissions Regime (TPR) before 30 October. The TPR allows EEA firms and funds to continue to do business in the UK whilst they seek a full authorisation from the FCA. (FCA) 1 min


Regulator EU

Last week, ESMA published the results of a peer review it conducted into supervisory actions of six National Competent Authorities (NCAs) regarding their approaches to enhancing the quality of derivative data reported under the European Market Infrastructure Regulation (EMIR). ESMA said that it sees “significant room for improvement.” You can find the results of the review here(ESMA) 3 mins

The European Banking Authority (EBA) has published its detailed annual work programme for 2020. This lists the specific activities and tasks that the regulator will undertake in the coming year. (EBA) 1 min

The EBA has also pushed back the deadline for the Strong Customer Authentication (SCA) standards to 31 December 2020, giving national regulators a 15-month extension to implement the new rules. Initially scheduled for introduction last month, the EBA has acknowledged the complexity of the requirements. (Finextra) 1 min


Regulator US

The US Securities and Exchange Commission (SEC) recently announced that it is taking action against two offshore entities, Telegram and its wholly owned subsidiary, TON Issuer, for holding an unregistered token sale. The SEC has obtained a temporary restraining order against Telegram and TON, seeking ‘certain emergency relief,’ as well as permanent injunctions, disgorgement with prejudgment interest, and civil penalties. (Coin Telegraph) 2 mins

The Office of the Comptroller of the Currency (OCC) is fining Citibank $30 million, as the bank repeatedly violated holding period regulations on foreclosed real estate. Citibank allegedly committed more than 200 violations between April 2017 and August 2019. (Banking Dive) 2 mins


Regulator Asia 

An agreement has been made between the People’s Bank of China (PBOC) and the Monetary Authority of Singapore (MAS) to allow designated Singapore banks to offer trading and custody services for China’s bond market. DBS is the first bank to be granted a licence. (Regulation Asia) 2 mins


Regulator Australia

The Australian Prudential Regulation Authority (APRA) said last week that some Australian banks may have to raise additional capital as a result of its review of how much equity banks must hold to support subsidiaries. “These proposed measures seek to support the resilience of the major banks’ Australian operations,” APRA deputy chair John Lonsdale said. (News.com.au) 2 mins


Crypto regulation

Over the last month, Facebook’s mission to launch a revolution in global finance has gone badly awry. The Libra cryptocurrency project now faces existential threats from world leaders and central bankers worried about its harmful potential. In recent weeks, a number of high-profile partners in the project have quit in dramatic fashion including PayPal, eBay, Visa, and Mastercard. (The Guardian) 4 mins

Facebook’s digital currency project must not go ahead until the technology giant demonstrates that it is safe and secure, according to a recent G7 report. While the report didn’t single out Facebook’s digital currency specifically, it said that global stablecoins that have the potential to scale rapidly pose a range of possible problems. (City AM) 2 mins

Meanwhile, in a letter to G20 finance ministers on 13 October, Randal Quarles, the head of the global Financial Stability Board (FSB) said cryptocurrency regulatory gaps need to be assessed as a matter of priority. (FinTech Futures) 2 mins

Cryptocurrency markets are currently faced with significant operational challenges, leading to low investor confidence, says Saeed Patel, director of product strategy at KRM22. Patel says that in terms of crypto regulation, Asian regulators are leading the way. (Finextra) 3 mins

The Swiss Financial Market Supervisory Authority (FINMA) has said that Facebook’s Libra project falls under the category of financial market infrastructure regulation. As such, FINMA would have to grant the project a license for its payment system in accordance with the Financial Market Infrastructure Act (FMIA). (Cryptopolitan) 2 mins


RegTech

I’m excited to announce that ClauseMatch is now working with Italian bank Intesa Sanpaolo. The bank has implemented the ClauseMatch platform within the Cost Management Office governance area, which is an advanced online document management and collaboration solution designed to optimise and streamline the process of creating and managing intra-group service contracts. (London Loves Business) 3 mins

X Companies that are ignoring the advantages and empowerment of RegTech and not using it are losing out, according to Patrick Conroy, managing director of ACA Compliance Group. Conroy says that RegTech delivers a number of benefits including efficiency gains, cost reductions, and risk reduction, and it can also flag regulatory challenges before infringements occur. (FT Adviser) 3 mins

To get the best out of any RegTech solution, firms need to be confident that it is being built on a coherent IT infrastructure, says Thomson Reuters RegTech expert Susannah Hammond. Even the very best RegTech solutions will not be able to deliver the expected benefits if it is deployed on an inconsistent or unreliable IT system. (JDSUPRA) 3 mins

When industry incumbents feel threatened by upstart technologies, you can expect them to defend their territory. ‘Tech washing’ is the practice of slapping a trendy, new label on legacy solutions. We’re now seeing this happening in the RegTech industry, says Kayvan Alikhani, CEO and Co-Founder of Compliance.ai. (Forbes) 3 mins

Apiax, a Swiss RegTech startup, has announced the completion of a €6 million Series A funding round. The capital will support Apiax’s global growth plans for its solution for mastering complex regulations digitally. (EU-Startups) 1 min


White Paper 

“Over the past decade, compliance has been propelled into the spotlight.”

What will compliance look like in 10 years?

Compliance 2030: Technology’s Promise for Banking’s Future. I’m excited to share this new research paper. The ClauseMatch team has interviewed 10 industry experts to find the answers to questions about the future of compliance, the challenges digitalising compliance at banks and FIs as well as identify the roadmap to implement RegTech successfully. And so much more. Here’s the link to download the new Whitepaper. (ClauseMatch) appr. 1 hr


AML

UBS has agreed to pay more than €10 million to settle a money-laundering investigation in Italy. The financial institution has been dealing with two separate probes in Italy and a court case in France over allegations it enabled cross-border tax cheats to hide assets in Switzerland. (Reuters) 2 mins

Deutsche Bank took five years to disclose suspect money transfers with Danske Bank, a person with direct knowledge of the matter has said. Danske Bank was ejected from Estonia this year after admitting that €200 billion of suspicious money flowed through its branch there between 2007 and 2015. (Reuters) 2 mins


Podcast

Earlier this month, the five federal financial regulatory agencies responsible for the Volcker rule announced that they finalised revisions to simplify its compliance requirements. These revisions provide market participants with much-needed clarity on compliance issues. In a podcast here, Securities Industry and Financial Markets Association (SIFMA) president and CEO, Kenneth E. Bentsen, Jr. explains why these revisions are important to the markets and the economy. (SIFMA) 13 mins


Events

This week, MENA’s leading FinTech festival will take place in Abu Dhabi. The festival, which is in its third year, will feature over 2,000 start-ups, scale-ups, and SMEs. It’s not too late to buy tickets. (FinTech Abu Dhabi) 1 min