On June 2, 2021 the OFAC sanctioned three Bulgarian individuals for their extensive roles in corruption in Bulgaria, as well as their business networks encompassing 64 entities. This constituted the largest Global Magnitsky action taken on a single day in the history of the program. By applying their laws extraterritorially, the United States seeks to police and prevent serious human rights abuses and large-scale corruption. By imposing tangible and significant consequences on perpetrators’ property and interests, the US protects not only its interests, but also the global financial system. At the same time, designated sanctions raise many questions when it comes to legality, justice and compliance, especially when it comes to local markets and smaller businesses.
Continue reading…

Regulatory reforms implemented since the financial crisis significantly helped banks absorb the shock caused by the Covid-19 pandemic, the Basel Committee on Banking Supervision said on Tuesday in an interim report assessing the effectiveness of post-crisis reforms. The report, Early lessons from the Covid-19 pandemic on the Basel reforms, indicates that the banking system would have faced greater stress during this period had the Basel III reforms not been adopted, and in the absence of extraordinary support measures taken by public authorities to mitigate the impact of the pandemic. Continue reading…

To enhance consumer protection in the funeral plans market, the FCA has confirmed the rules funeral plan providers will have to follow when they come under regulation from 29 July 2022. The new rules will introduce high standards in the funeral plans market and require firms to ensure that plans are sold fairly, perform as expected and provide value for money. These rules mean:

Funeral instalment plan products will always deliver a funeral (after a moratorium period) as we will be banning those that don’t guarantee this; Cold calling will be banned and new standards on advertising will be implemented to ensure plans are sold fairly;
Commission payments to intermediaries will be banned to ensure products represent fair value; Those selling funeral plans are subject to full checks on their fitness to operate to improve governance standards and oversight.

Continue reading…

The Financial Stability Board (FSB) has recently published a consultation report with policy proposals to enhance money market fund (MMF) resilience. The proposals form part of the FSB’s work programme on non-bank financial intermediation (NBFI). The FSB’s Holistic review of the March 2020 market turmoil highlighted structural vulnerabilities in MMFs and related stress in short-term funding markets. MMFs are susceptible to sudden and disruptive redemptions, and they may face challenges in selling assets, particularly under stressed conditions. These features can make individual MMFs, or even the entire MMF sector, susceptible to runs, and may also give rise to system-wide vulnerabilities. Continue reading…

by Elena Pykhova

During the COVID-19 pandemic, in addition to dealing with financial challenges such as a drop in assets or liquidity, organisations are faced with issues that go to the core of operational risk management – people, systems, processes and the external environment. The crisis acted as a real-life stress test of existing frameworks and processes, and lessons learnt from the pandemic will trigger changes to how firms view and manage their operational risks.  Continue reading…

Judicial experts and practitioners in the field of cybercrime will focus on new trends in their domain and how to tailor investigations, during the 10th Plenary Meeting of the European Judicial Cybercrime Network (EJCN), which takes place today and tomorrow. The EJCN Plenary, hosted by Eurojust in an online format, will also give special attention to supporting victims of cybercrime. One of the particular topics in this regard is the recent taking down of the Emotet malware bot in a major cross-border operation with support from Eurojust and Europol. Continue reading…

by Michel Klompmaker

It was coming. Another crypto scandal. Now two South African brothers seem to have run off with 69,000 bitcoins from customers who had entrusted their money to Africrypt. This amounts to several billion euros. The two brothers had founded their company in 2019 in Johannesburg. As usual in this market, they promised high returns and they targeted high net worth individuals. Last April, there was a glitch in which customers were warned that the company had been hacked and that online crypto wallets were at risk. Let’s go back to the seventeenth century just to be sure. How did it come to sit with the tulips again? Continue reading…

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has approved the registrations of the first two securitisation repositories (SRs) under the Securitisation Regulation (SECR). The registration decisions will become effective on 30 June 2021. The following entities are registered as SRs for the European Union: European DataWarehouse GmbH based in Germany; and SecRep B.V. based in the Netherlands.
Continue reading…

The European Banking Authority (EBA) has recently published a Report on the treatment of incoming third country branches (TCB) under the national law of Member States. The Report, which is addressed to the European Parliament, the Council and the Commission, illustrates the results of a stock-taking exercise conducted with competent authorities about their national regulatory law/regulations and supervisory practices and a mapping of the TCBs established in the Member States. Considering the increased volume of activities carried out by TCBs in a context of regulatory fragmentation across the EU, the Report lays down 14 high-level policy recommendations for further harmonisation of EU law. Continue reading…

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published its Annual Report, which reviews its achievements in 2020 against its priorities and objectives in meeting its mission of enhancing investor protection and promoting stable and orderly financial markets in the European Union. The Report provides an overview of the work carried out by ESMA in 2020, following the entry into force of the revised ESMA Regulation and the amendments to the European Market Infrastructure Regulation (EMIR 2.2), updating ESMA’s governance and introducing new mandates for the organisation, which are shifting ESMA’s focus towards supervisory convergence. In addition to fulfilling its mandates, ESMA had to respond to the combined effects on financial markets of the COVID-19 pandemic and the United Kingdom’s withdrawal from the European Union. Continue reading…