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On 9 August 2024, the Australian Securities and Investments Commission (ASIC) released it’s financial advice update that discusses the importance of compliance across multiple critical areas. This update addresses the need for accurate record-keeping on the financial advisers register, ensuring that advisers meet required qualification standards, and maintaining stringent cybersecurity measures, especially concerning third-party exposures. Additionally, ASIC highlights ongoing concerns about unethical practices in the superannuation switching sector, specifically regarding cold calling and high-pressure sales tactics that can lead to poor consumer outcomes. The update also reminds AFS licensees of the imperative to register financial advisers properly before they provide personal advice, with strict compliance checks already identifying lapses in this area. Through this comprehensive update, ASIC reinforces its commitment to safeguarding investors and maintaining the integrity of the...

On July 25, 2024, the Financial Services Commission (FSC) officially announced the schedule for this year’s highly anticipated Korea Fintech Week, set to take place from August 27 to 29 at the iconic Dongdaemun Design Plaza in Seoul. This event, the largest of its kind in Korea’s history, is poised to be a landmark gathering for the fintech industry, focusing on the transformative impact of artificial intelligence (AI) within the financial sector. Under the theme “Beyond Boundaries: Fintech and AI Redefining Finance,” the expo will not only showcase cutting-edge technologies but also explore how these innovations are reshaping the global financial landscape. The expo will feature participation from leading fintech companies, financial institutions, academic bodies, and international organizations, making it a truly global event. Over the course of three days, attendees will have the opportunity to explore 85 meticulously curated exhibition booths spread across four specialized...

On August 13, 2024, in a compelling address at the International Association of Deposit Insurers (IADI) Asia Pacific Regional Committee (APRC) International Conference, Reserve Bank of India (RBI) Deputy Governor Michael Debabrata Patra highlighted the evolving challenges facing deposit insurers in an increasingly digital and climate-conscious world. Speaking at the conference hosted by the Deposit Insurance and Credit Guarantee Corporation (DICGC) in Jaipur, Patra emphasized the importance of fortifying crisis preparedness and the need for deposit insurers to stay ahead of emerging risks. Patra began by acknowledging the rapid digitalization of financial services and the opportunities it presents for deposit insurers to enhance their efficiency and effectiveness. He noted that while digitalization offers significant economies of scale and modernization in reimbursement, supervision, and resolution, it also brings new risks. The experience of banking sector stress in 2023, where...

On August 12, 2024, the Commodity Futures Trading Commission (CFTC) imposed a $100,000 fine on Cost Management Solutions, LLC (CMS), a Texas-based corporation, for operating as an unregistered Introducing Broker (IB). The order, which simultaneously files and settles charges, not only mandates the monetary penalty but also directs CMS to cease any further violations of the Commodity Exchange Act (CEA). The CFTC’s investigation, covering activities from May 2018 to the present, uncovered that CMS had been actively engaging in IB functions without the necessary registration. CMS's business primarily involved brokering swap and options transactions in energy commodities such as propane, heating oil, and crude oil. The firm’s activities included identifying potential counterparties, conducting price discovery, negotiating trade terms, and executing transactions on behalf of its clients—mainly propane retailers looking to hedge against market risks. Despite the extensive brokerage...

On August 12, 2024, the Securities and Exchange Commission (SEC) took decisive action against OTC Link LLC, a New York-based broker-dealer, for neglecting to file mandatory Suspicious Activity Reports (SARs) over a period exceeding three years. The firm has agreed to pay $1.19 million to settle the charges, marking a significant enforcement effort by the SEC to ensure adherence to anti-money laundering (AML) regulations within the securities industry. SARs are vital for detecting potential violations of securities laws and money laundering activities. Broker-dealers like OTC Link are legally required to file these reports when they identify transactions that appear suspicious. However, according to the SEC's findings, OTC Link failed to submit a single SAR from March 2020 through May 2023, despite operating three active alternative trading system (ATS) platforms—OTC Link ATS, OTC Link ECN, and OTC Link NQB. These platforms facilitate tens of thousands of transactions daily, many...

On 26 July 2024, the Securities Commission of the Bahamas (SCB) announced the Digital Assets and Registered Exchanges Act, 2024 (DARE Act) which came into effect on 29 July, 2024. It aims to establish a clear legal framework for the issuance, sale, and trade of digital assets, including NFTs and stablecoins, and to oversee the operations of digital asset businesses and exchanges. The Act replaces the Digital Assets and Registered Exchanges Act, 2020, providing more detailed regulations to adapt to the growing complexities of digital assets and their associated technologies. The Act establishes a comprehensive regulatory framework for various key structures in the digital asset industry. It mandates that Digital Asset Businesses, including exchanges, custody services, and staking operations, must be registered and regulated. The Act also enforces transparency and investor protection in Token Offerings and imposes stringent requirements on Stablecoins, including adequate reserves and...

On August 9, 2024, the Internal Revenue Service (IRS) released an early draft of the much-anticipated Form 1099-DA, a new tool designed to streamline and enhance the reporting of digital asset transactions. This form will become mandatory for brokers beginning in 2025, marking a significant advancement in the agency's efforts to ensure that digital assets are accurately reported and taxed in accordance with federal laws. Form 1099-DA, officially titled "Digital Asset Proceeds From Broker Transactions," represents the IRS's response to the growing complexity of digital asset transactions and the need for clearer reporting mechanisms. Brokers will be required to use this form to report sales and exchanges of digital assets, starting with transactions that occur in calendar year 2025. The finalized versions of these forms will be distributed to both taxpayers and the IRS in early 2026. However, it is important to note that Form 1099-DA is still a work in progress and should not be used...

On 1 August 2024, the Monetary Authority of Singapore (MAS) introduced its Guidelines on Licensing and Conduct of Business for Fund Management Companies (FMCs), with significant changes taking effect from 1 August, 2024 itself. These revisions are designed to address the evolving landscape of financial markets, particularly with the rising prominence of digital assets like cryptocurrencies. The new guidelines aim to ensure that all entities engaged in fund management within Singapore operate under stringent regulatory standards that prioritize transparency, investor protection, and market integrity. A FMC is broadly defined as any entity involved in managing investment portfolios on behalf of clients, which can range from individual investors to large institutional clients such as pension funds or insurance companies. The primary role of an FMC is to make informed investment decisions, oversee portfolio construction, and manage the execution of trades to achieve specific financial...

On July 26, 2024, the Monetary Authority of Singapore (MAS) issued a circular i.e. AMLD 08/2024, aimed at financial institutions (FIs) operating in the wealth management sector. The circular provides detailed guidance on establishing the sources of wealth (SOW) of customers, a critical component in mitigating money laundering and terrorism financing (ML/TF) risks. As Singapore continues to attract high-net-worth individuals (HNWIs) seeking wealth management services, this circular emphasizes the need for rigorous due diligence to ensure that the influx of funds remains legitimate. Singapore has long been recognized as a premier financial center for HNWIs, offering access to global and regional financial markets through a wide range of services and expertise. However, the wealth management business is inherently susceptible to higher ML/TF risks due to the nature of its clientele, the size of transactions, and the complexities involved in managing substantial wealth. Given this, MAS...

On August 8, 2024, the Commodity Futures Trading Commission (CFTC) advanced efforts to enhance data transparency within the financial sector by proposing new technical data reporting standards. Developed in collaboration with major financial regulatory agencies, this initiative aims to establish uniform standards for collecting and reporting financial information. The agencies involved include the Office of the Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Consumer Financial Protection Bureau, the Federal Housing Finance Agency, the Securities and Exchange Commission, and the Department of the Treasury. These standards will also apply to data collected on behalf of the Financial Stability Oversight Council. The proposed rule, now open for public comment, introduces common identifiers for legal entities, financial instruments, and other critical data points. The goal is to enhance consistency...

On August 08, 2024, the Commodity Futures Trading Commission (CFTC) announced a whistleblower award exceeding $1 million to an individual who provided crucial information and assistance that significantly contributed to a successful enforcement action in the digital asset markets. Director of Enforcement Ian McGinley highlighted the significance of the CFTC’s focus on digital asset-related misconduct, stating, "Identifying unlawful conduct in the digital asset marketplace is a major priority for the CFTC, especially as everyday Americans are increasingly victimized by digital asset scams." McGinley also noted that digital asset cases made up nearly half of the CFTC’s enforcement docket in the last fiscal year, emphasizing the critical role that whistleblowers play in uncovering violations within this rapidly evolving sector. The whistleblower in this case provided specific and credible information that the CFTC had not previously known, directly leading to the agency's enforcement...

On 08 August 2024, the Commodity Futures Trading Commission (CFTC) announced a landmark decision by the U.S. District Court for the Southern District of New York, which ordered FTX Trading Ltd. and Alameda Research LLC to pay a staggering $12.7 billion in monetary relief to victims of their fraudulent activities. This judgment is one of the largest in the history of financial fraud cases, reflecting the scale of the misconduct orchestrated by Samuel Bankman-Fried and his associated entities. The court's order requires FTX and Alameda to pay $8.7 billion in restitution to customers who suffered losses due to the misappropriation of their funds. An additional $4 billion is to be paid in disgorgement, which will be used to further compensate the victims through a supplemental remission fund. This resolution comes after a series of legal actions taken against Bankman-Fried and his companies, which began with the CFTC filing a complaint on 13 December 2022. The initial complaint alleged...