The rules and regulations of the financial sector are always evolving. As new technologies come along, new treats too. Cyber attacks continue to increase. Crypto assets have also changed the financial landscape while adding many new challenges to regulations. Whether it is about cyber tracks or geopolitical uncertainty, the financial sectors along with regulations are put to the test.
Let’s take a look at some of the regulatory guidance and compliance development before you go for a regulatory audit in 2023.
Financial Services Legislation
The Financial Services and Markets Bill 2022-2023 (FSMB) implements the new rule. The bill suggests that FCA and PRA now take on new secondary objectives for medium to long-term growth and international competitiveness. The FSMB will impact firms in different ways ranging from increased regulatory scrutiny to the removal of inefficient regulations. This will entail additional cost and management time for those firms that need to update their compliance policies and other procedures.
Digital assets
As the new framework and guidelines start to bring assets closer to mainstream adoption, now firms are more concerned that they may be held liable for the crypto-trading activity of their own employees. Central bank governors and heads of supervision have now endorsed a global prudential standard for banks’ exposures to crypto assets. This was developed by the Basel Committee on Banking Supervision. The standard will permit 2% crypto reserve exposure among banks, which will come into effect by January 1, 2025.
In 2023, regulators will be about bringing order to the highly fragmented digital asset landscape. This might lead to tighter regulations on digital tokens and exchanges. This may involve banning the co-mingling of customer capital, with assets to be held in custody, which is separate from the main business.
Bottom Line
Changes to existing legislation over time and staying in compliance with new rules and regulations can be challenging for any financial organization. With a specialist technology solution from a trusted partner, you can simplify compliance with existing and future regulations for submitting regulatory audits.
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