Global Payments Newsletter, March 2022

Key developments of interest over the last month include:

  • United States: President Biden issues US Executive Order on digital assets
  • European Union: EBA publishes final Guidelines on limited network exclusion under PSD2
  • Singapore: MAS publishes response on a digital Sing dollar

In this Newsletter:

For previous editions of the Global Payments Newsletter, please visit our Financial Services practice page.

Regulatory Developments

United States: President Biden issues US Executive Order on digital assets

On 9 March 2022, President Biden signed an Executive Order on digital assets, instructing federal agencies to coordinate their approach to the sector.

The Executive Order focuses on policy objectives in six key areas: consumer protection, financial stability, illicit activity, U.S. competitiveness, financial inclusion and responsible innovation. Among other things, it calls for measures to:

  • Protect U.S. consumers, investors and businesses by directing federal agencies to assess and develop policy recommendations to address the implications of the growing digital asset sector and changes in financial markets. The Order also encourages regulators to ensure sufficient oversight and safeguard against any systemic financial risks posed by digital assets.

  • Protect U.S. and global financial stability and mitigate systemic risk by encouraging the Financial Stability Oversight Council to identify and mitigate financial risks posed by digital assets and to develop appropriate policy recommendations to address any regulatory gaps.

  • Explore a potential U.S. central bank digital currency (CBDC) as a matter of urgency.

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European Union: EBA publishes final Guidelines on limited network exclusion under PSD2

On 24 February 2022, the EBA published its final Guidelines on the limited network exclusion under PSD2. These Guidelines clarify how national competent authorities should assess whether a network of service providers or a range of goods and services qualify as 'limited' and are, therefore, not subject to the Directive. Payment instruments that might benefit from this exclusion include store cards, fuel cards, public transport cards, and meal vouchers.

The Guidelines aim at addressing significant inconsistencies on how this exclusion has previously been applied across the EU, contributing to the Single Market for payment services in the EU and ensuring transparency for supervisors and customers.

Additionally, the Guidelines introduce provisions and, where relevant, criteria and indicators aimed at ensuring that payment instruments that can benefit from the exclusion are used in a limited way, thus reducing potential risks that may arise for the users of such instruments.

The Guidelines will apply as of 1 June 2022 with an additional 3-month transitional period for issuers that already benefit from the exclusion to submit a new notification to their national competent authority.

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Singapore: MAS publishes response on a digital Sing dollar

On 2 March 2022, the Monetary Authority of Singapore (MAS) published its response to the Committee of Supply 2022 (COS) regarding a digital Sing dollar.

MAS noted that it has been among the central banks at the forefront of experiments with central bank digital currencies (CBDCs), especially wholesale CBDCs. However, in common with central banks in a number of other jurisdictions, such as the Reserve Bank of Australia and the Bank of Canada, MAS has determined that the case for a retail CBDC for Singapore is 'not compelling' at this point in time. Explaining this decision, MAS commented that, while financial inclusion and payments efficiencies are frequently cited as reasons in support of introducing retail CBDCs, financial inclusion is 'not a significant problem in Singapore' and payments are 'pervasive, seamless and efficient'.

However, MAS has not ruled out introducing a retail CBDC at some point in the future, and it continues to develop its technological and institutional capabilities in the CBDC space.

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Global: FSB letter to G20 leaders

On 17 February 2022, the Financial Stability Board (FSB) published a letter to G20 leaders ahead of their February 2022 summit.

The letter covers the FSB's future policy work to ensure the stability of the global financial system and outlines the areas on which it will report to the G20 in October 2022, which include harnessing the benefits of digitalisation while containing its risks. Digital innovation continues to be a priority area with a view to bringing about cheaper, faster and more transparent and inclusive cross-border payment services, including remittances. The FSB, with others, will deliver a progress report on the G20 cross-border payments roadmap. It will also report on proposals for developing best practices for regulatory reporting of cyber incidents.

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United Kingdom: UK Finance publishes payments regulation review

On 17 March 2022, UK Finance (UKF) published a report on the impact of UK payments regulation, which makes suggestions on how industry and regulators can work together to strengthen and enhance the UK's payments infrastructure and regulatory and supervisory frameworks. Identified opportunities include:

  • Market change: The payments sector drives its own change through self-regulatory initiatives and technological advances, as well as through regulatory reform. UKF suggests that proactive engagement by market participants and legislative and regulatory stakeholders must be improved.

  • Regulatory co-ordination and public policy: The payments sector needs a flexible and proportionate regulatory framework, which can be enhanced by greater co-ordination of implementation requirements and timelines, and regulatory change that is informed by detailed and timely reviews of the effectiveness of past regulatory interventions.

  • EU and international: UKF thinks that the payments sector is keen to explore and build on the opportunities presented by Brexit, but warns that the UK's approach to alignment with, and divergence from EU regulation must not risk access to markets or infrastructure and must support the sector's continued competitiveness with EU and international markets.

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Global: FSB updates its assessment on the risks cryptoassets pose to financial stability 

On 16 February 2022, the Financial Stability Board (FSB) published a report on its updated assessment of risks to financial stability from cryptoassets.

The FSB report concludes that cryptoasset markets are fast evolving and could reach a point where they represent a threat to global financial stability due to their scale, structural vulnerabilities and increasing interconnectedness with the traditional financial system, especially in light of regulatory gaps. As a result, the FSB highlights areas including the following for ongoing vigilance:

  • Potential increasing bank sector involvement in the cryptoasset eco-system, especially where activities give rise to balance sheet exposure to cryptoassets not captured by (or not in compliance with) appropriate regulatory treatment.

  • Institutional investors increasing their exposures to cryptoassets relative to the size of their portfolios.

  • An acceleration in adopting cryptoassets for payments.

  • The growth, role and risks associated with cryptoasset trading platforms.

  • Losses in cryptoassets, where accompanied by leverage, liquidity mismatch and interconnections with the traditional financial system, may amplify systemic risk arising from wealth effects. Loss of confidence in stablecoins could also trigger sales of their reserve assets, potentially affecting the functioning of short-term funding markets.

  • The rapid growth in decentralised finance has led to an absence of clearly identifiable intermediaries or parties responsible for governance.

The FSB will continue to monitor developments and risks in cryptoasset markets and cryptoasset trading platforms, as well as explore potential regulatory and supervisory implications of unbacked cryptoassets. It will also continue its work to ensure effective implementation of its high-level recommendations for the regulation, supervision and oversight of "global stablecoin" arrangements.

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European Union: Report on proposed Regulation on markets in cryptoassets (MiCA) adopted by ECON

On 14 March 2022, the European Parliament's Economic and Monetary Affairs Committee (ECON) announced that it has adopted its report on the European Commission's legislative proposal for MiCA (2020/0265(COD)).

In the press release, the following amendments proposed by ECON are highlighted:

  • The Commission would be mandated to adopt a legislative proposal to include in the EU taxonomy for sustainable activities any cryptoasset mining activities that contribute substantially to climate change by 1 January 2025. The Commission is also called on by ECON to work on legislation addressing issues arising from other industries that consume energy resources, such as the video games and entertainment industry and data centres.

  • ESMA would be responsible for supervising the issuance of asset-referenced tokens and the EBA would be responsible for supervising electronic money tokens.

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United Kingdom: FMLC publishes letter addressing uncertainties about future cryptoasset regulation

On 15 March 2022, the Financial Markets Law Committee (FMLC) published a letter to HM Treasury which highlights the following potential areas of legal uncertainty in relation to the regulation of cryptoassets and related activities in the UK:

  • Although the existing financial promotion regime works together with and complements the regulated activities regime under the Financial Services and Markets Act 2000 (FSMA), there is little connection between the proposed regulation of cryptoasset promotions and the authorisation regime in FSMA which leads to creating a complex authorisation scheme.

  • The proposed requirement that an authorised firm is only permitted to approve financial promotions for authorised persons if the FCA has assessed the firm as suitable and competent to do so may, in practice, create a significant barrier to entry and restriction on innovation.

  • There is uncertainty regarding the dividing line between the proposed regulatory regime addressing stablecoins and the e-money regime, with implications for cryptoasset promotions, as it is proposed that the financial promotion regime will apply to stablecoins but not to e-money.

The FMLC recommends that authorities consider a co-ordinated approach to creating a bespoke regulatory regime for cryptoassets.

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United Kingdom: HM Treasury and BoE respond to House of Lords Economic Affairs Committee report on CBDCs

On 18 March 2022, the responses of HM Treasury and the Bank of England (BoE) to the recommendations in the House of Lords Economic Affairs Committee's January 2022 report on the potential for a UK retail central bank digital currency (CBDC) were published. Among other things, the responses include the following points:

  • Evaluation of the case for a CBDC is still in the research and exploration phase, and no decision has been made as to whether to issue a UK CBDC. The Joint CBDC Taskforce will continue to engage with Parliament and other stakeholders on its CBDC work. The government is also involved in significant international co-operation on CBDCs, although the focus of the Taskforce is on evaluating the UK position.

  • The planned 2022 consultation paper on CBDCs will set out the Taskforce's assessment of the case for a UK CBDC, evaluate the opportunities, risks and implications, and conclude on the merits of any further work to develop a UK CBDC operational and technology model. Among other issues, the consultation will include discussion of how the case for a CBDC relates to wider developments in the payments landscape, including cryptoassets and stablecoins.

  • The case for an alternative form of central bank money is being considered alongside cash and bank deposits and not as their replacement, and cross-border functionality is crucial to the success and uptake of any CBDC.

  • In response to the recommendation that the Taskforce consults on the use case for a wholesale CBDC alongside the retail CBDC consultation, it is pointed out that the BoE already provides wholesale digital central bank money through its real-time gross settlement (RTGS) system, which will move to a new modern platform in 2024, and the BoE will consult in Spring 2022 on the roadmap for further enhancements beyond 2024.

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European Union: IRSG publishes paper on proposed third-country regime for banking services under CRD VI

On 15 February 2022, the International Regulatory Strategy Group (IRSG) published a paper setting out its position on the third-country regime for banking services under the proposed Directive amending the CRD IV Directive (2013/36/EU) (CRD VI) (2021/0341(COD)). In the paper, the IRSG:

  • Considers that the new proposals mark a significant departure from the existing requirements, going beyond mere clarification of the status quo. The broad scope of the requirements will result in fragmentation of markets, creating problems for EU firms carrying out core banking services and for EU corporates due to a loss of access to financing and account options. The IRSG explains that it will be more problematic for EU entities and individuals to have bank accounts in non-EU jurisdictions, more challenging for EU corporates to raise finance or develop their businesses abroad, and harder for EU banks and investment firms to access international interdealer markets.

  • Considers that the EU proposals appear tougher than the regulations governing cross-border market access into other important jurisdictions. Subject to certain criteria, a local establishment is not required for EU entities to deal cross-border into either the UK, the US or Switzerland, for example. For this reason, the EU will be an outlier in comparison to other major jurisdictions.

  • Notes that, since CRD VI was adopted in October 20201, there have been statements from the European Commission suggesting an openness to consider narrowing the scope of the market access restrictions in the proposed Directive. The IRSG welcomes this and advises that it, along with other bodies, is working to identify what amendments may be required to the proposal.

Generally, the IRSG supports market access rules that increase harmonisation across the EU, and which do not unduly constrain the access to international markets and services currently enjoyed by EU entities and citizens.

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European Union: ECB publishes two opinions on legislative proposals that implement AML and CTF action plan

On 17 February 2022, the Council of the EU published two opinions of the ECB on legislative proposals that form part of the package of measures implementing the European Commission's anti-money laundering (AML) and counter-terrorist financing (CTF) action plan. The Commission adopted these legislative proposals in July 2021.

Although the ECB welcomes the initiatives, it recommends that the proposed legislation is amended in several areas. Specific drafting proposals are set out in separate technical working documents, which can be found attached to each opinion:

  1. Opinion on a proposal for a Regulation establishing the Authority for AML and CTF (AMLA): This opinion makes specific observations about the limited scope of the AMLA's direct and indirect supervision, the nature of the co-operation between the AMLA and the ECB, the processes to be employed in the AMLA's direct and indirect supervision of obliged entities, and the governance structure of the AMLA and continuity arrangements.

  2. Opinion on a proposal for a Directive and Regulation on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing: This opinion makes specific observations on the definition of obliged entities (specifically the status of central banks), the impact of the limitation on payments in cash, risk factors for customer due diligence, and suggests that a broader, technology-neutral definition of cryptoassets would be more compatible with FATF recommendations. The ECB also comments on various prudential supervisory aspects of the proposals including the compliance function within obliged entities, the powers of supervisory authorities to impose administrative sanctions and measures, and the performance of customer due diligence where an institution is failing or is likely to fail.

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European Union: Delegated Regulation amends list of high-risk third countries under MLD4

On 21 February 2022, Commission Delegated Regulation (EU) 2022/229, which amends Delegated Regulation (EU) 2016/1675 on the list of high-risk third countries with strategic anti-money laundering (AML) and counter-terrorist financing (CTF) deficiencies was published in the Official Journal of the European Union. The Delegated Regulation has been amended to:

  • Add third countries that have been identified as having strategic AML and CTF deficiencies, namely Burkina Faso, Cayman Islands, Haiti, Jordan, Mali, Morocco, the Philippines, Senegal and South Sudan.

  • Remove third countries that no longer present strategic AML and CTF deficiencies, such as the Bahamas, Botswana, Ghana, Iraq and Mauritius.

The Delegated Regulation entered into force on 13 March 2022.

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United Kingdom: HM Treasury publishes updated advisory notice on money laundering and terrorist financing controls in high-risk third countries

On 17 March 2022, HM Treasury (HMT) updated its Advisory Notice: Money Laundering and Terrorist Financing controls in high-risk third countries, which replaces all previous notices issued by HMT on the subject. The advisory notice follows two statements published by FATF on 4 March 2022 which identified jurisdictions with strategic deficiencies in their anti-money laundering and counter-terrorist financing regimes.

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United Kingdom: HM Treasury approves JMLSG final guidance on monitoring customer activity

On 15 March 2022, the Joint Money Laundering Steering Group (JMLSG) announced that it had received HM Treasury (HMT) ministerial approval for revisions to its guidance relating to monitoring customer activity and correspondent relationships. The JMLSG finalised a revised version of Chapter 5.7 of Part I of its guidance and a minor revision to Sector 16 in Part II in December 2021. The JMLSG also confirmed HMT approval for revisions to its guidance relating to trade finance and syndicated lending.

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European Union: European Commission proposes measures on fair access to and use of data in new Data Act and launches call for feedback

On 23 February 2022, the European Commission proposed new rules on who can use and access data generated in the EU across all economic sectors.

The new EU Data Act (in the form of a Regulation on harmonised rules on fair access to and use of data) will be aimed at ensuring fairness in the digital environment, stimulating a competitive data market, opening opportunities for data-driven innovation and making data more accessible for all. This is described by the Commission as the last horizontal building block of its data strategy and will play a key role in the EU’s digital transformation, in line with the Commission’s 2030 digital objectives.

The proposals for the new Data Act include:

  • Measures to allow users of connected devices to gain access to data generated by them, which is often exclusively harvested by manufacturers; and to share such data with third parties to provide aftermarket or other data-driven innovative services.

  • Measures to rebalance negotiation power for SMEs by preventing abuse of contractual imbalances in data sharing contracts. The Data Act will shield them from unfair contractual terms imposed by a party with a significantly stronger bargaining position. The Commission will also develop model contractual terms in order to help such companies to draft and negotiate fair data-sharing contracts.

  • Means for public sector bodies to access and use data held by the private sector that is necessary for exceptional circumstances, particularly in case of a public emergency, such as floods and wildfires, or to implement a legal mandate if data are not otherwise available. Data insights are needed to respond quickly and securely, while minimising the burden on businesses.

  • New rules allowing customers to effectively switch between different cloud data-processing services providers and putting in place safeguards against unlawful data transfer. 

On 14 March 2022, the European Commission launched a request for feedback on the new Data Act proposals. The Commission will summarise the feedback received (which will be published online) and present it to the European Parliament and the Council of the EU to inform the legislative debate. The feedback period closes on 11 May 2022.

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European Union: EDPB adopts final version of Guidelines on Code of Conduct as a tool for transfers

At its 61st Plenary Session on 22 February 2022, the European Data Protection Board (EDPB) adopted a final version of the Guidelines on Codes of Conduct as a tool for transfers (Guidelines). The Guidelines were adopted following a public consultation and provide clarification on the application of Articles 40(3) and 46(2)(e) of the EU GDPR and the use by a controller or processor of a code of conduct adopted in accordance with Article 40 as an appropriate safeguarding measure to transfer personal data to a third country or an international organisation.

At the same Plenary Session, the EDPB also adopted:

  • A letter in reply to the European Parliament's Civil Liberties, Justice and Home Affairs Committee (LIBE) regarding the Second Additional Protocol to the Cybercrime Convention, setting out its observations on the final draft of the Second Additional Protocol.

  • A letter on AI liability expressing the EDPB’s support for the European Commission’s proposals to strengthen the liability regime for producers of AI driven products and ensure the processing of personal data using AI systems remains trustworthy, and calling for providers of AI systems to be required to embed security by design throughout the entire lifecycle of the AI.

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United Kingdom: Annual review of Memorandum of Understanding on UK Payment Systems

On 14 February 2022, the FCA published a statement on the memorandum of understanding (MoU) it has entered into with the Bank of England, the PRA and the Payment Systems Regulator on the framework the authorities use to co-operate with one another in relation to payment systems in the UK.

The Financial Services (Banking Reform) Act 2013 requires the authorities to review the MoU annually and during 2021 the sixth review was carried out to assess whether co-operation pursuant to the MoU is working.

Overall, the authorities concluded that the MoU is working well. They have implemented a number of initiatives, such as the exchange of expertise, information and data. They have also identified further opportunities to deepen co-operation and co-ordination, for example by continuing effective cross-authority co-ordination on reforms to payments legislation and further enhancing the sharing of information and data. These will be implemented over the coming year.

In conducting the review, the authorities emphasised their on-going commitment to work closely together on issues of common regulatory interest and avoid duplication in their engagement with industry.

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United Kingdom: ASA publishes guidance on advertising cryptoassets

In February 2022, the Advertising Standards Agency (ASA) issued guidance on how the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code) applies to adverts for cryptoassets.

As CAP anticipates that the plans for FCA regulation of most cryptoassets will not take effect before 2023, in the interim advertising for unregulated cryptoassets must comply with the CAP Code.

Even after FCA regulation starts, the ASA will retain oversight of issues of responsibility across all forms of cryptoasset advertising. In addition, adverts for non-fungible tokens will remain fully within the ASA's remit as the FCA will not be regulating them.

The guidance sets out how the CAP Code applies to cryptoasset adverts, citing numerous relevant rulings. In particular, advertisers must:

  • Make clear that cryptoassets are not regulated by the FCA This information must be sufficiently clear and prominent so that it is both legible and easily seen.

  • Not take advantage of consumers' inexperience or credulity. It must be clear that profits from cryptoasset investments attract Capital Gains Tax.

  • Include all material information.

  • Make clear that value can go down as well as up, state the basis used to calculate any projections or forecasts and make clear that past performance is not a guide for future performance.

In a November 2021 statement, ASA announced that, as well as issuing guidance, it would be conducting "proactive monitoring and enforcement" to tackle non-compliant adverts for cryptoassets, which have become a 'red alert' priority issue.

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European Union: EPC updates mobile initiated SEPA (instant) credit transfer payments guidance

On 21 February 2022, the European Payments Council (EPC) published an updated version of its mobile initiated SEPA (instant) credit transfer (MSCT) payments and technical interoperability guidance.

The guidance was first published in 2019, and the EPC consulted on the updated guidance in Q3 2021. The updated guidance covers:

  • Necessary updating of chapters to reflect market and technical developments in recent years and address the consultation responses received.

  • Updates in view of the answers received on a number of questions that the EPC's multi-stakeholder group on MSCTs submitted.

  • The integration of a number of EPC documents on the technical interoperability of MSCTs and new MSCT interoperability models.

  • New work on MSCT interoperability regarding unsuccessful and "R-transactions" (that is, refunds, returns, rejects, refusals and reversals) and on MSCT technical interoperability messages.

  • Alignment with the EPC document on standardisation and governance of QR codes for instant payments at the point of interaction, which was published in November 2021.

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Italy: Decree on virtual asset service providers (VASPs) published in the Official Gazette

On 17 February 2022, following a public consultation, the decree of the Ministry of Economy and Finance regulating the business of virtual asset service providers (VASPs) in Italy was published in the Italian Official Gazette (Decree).

In order to operate in Italy, VASPs will now need to notify their business to the "Organismo per la gestione degli elenchi degli Agenti in attività finanziaria e dei Mediatori creditizi" (OAM) and enrol in a dedicated section of the register of money exchangers kept by the OAM (OAM Register, which is yet to be established). To this end, legal persons must have a registered office or, in the case of EU entities, a permanent establishment in Italy.

VASPs already operating in Italy will be required to notify the OAM within 60 days from the establishment of the OAM Register, which must occur within 90 days from the entry into force of the Decree. VASPs will also be required to provide the OAM with specific data relating to transactions carried out in Italy on a quarterly basis, by the 15th day of the month following the quarter of reference.

For more on this development, take a look at this Engage article by members of Hogan Lovells' Rome office.

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United Kingdom: PSR encourages firms to manage risks associated with Ukraine situation

On 2 March 2022, the Payment Systems Regulator (PSR) published a press release encouraging firms to consider how to manage any associated risks in the context of current events in Ukraine. In particular, the PSR highlights the following:

  • The ability to withstand attack from a sophisticated state actor.

  • Whether staffing levels are available to deal with an elevated cyber risk from state sponsored or other actors.

  • The implications on third party suppliers if there are sanctions.

  • The resilience of third party suppliers.

The PSR also notes that the National Cyber Security Centre (NCSC) has published guidance outlining the actions for organisations to take when the cyber threat is heightened. The NCSC is not aware of any current specific cyber threats to the UK in relation to the events in Ukraine, but it has advised organisations to be vigilant.

The PSR explains it is working closely with HM Treasury, financial authorities and other UK government agencies to help ensure the financial sector continues to work well and no harm comes to consumers and financial markets.

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United Kingdom: FCA webpage on operational and cyber resilience

On 8 March 2022, the FCA published a new webpage stating that although the National Cyber Security Centre (NCSC) is not aware of any current specific cyber threats to the UK following events in Ukraine, firms should be vigilant.

The FCA recommends that firms should review the NCSC's guidance outlining actions all organisations should consider in response to the current situation. The FCA also encourages firms to review the NCSC's Cyber Essentials scheme.

The FCA mentions that firms should:

  • Consider their ability and the ability of their third party providers to withstand a cyber-attack.

  • Take all appropriate steps to shore up their controls, including raising staff awareness that may, for example, include re-running staff ethical phishing campaigns.

  • Consider if their staffing levels are appropriate to deal with an elevated cyber risk.

  • Consider the implications of the continuing unrest and UK/US/EU sanctions and how that might impact it and its third-party providers including whether this could affect the delivery of important business services.

  • Ensure that their business continuity and incident management arrangements are up to date, ensuring that the firm can continue to function and meet its regulatory obligations in the event of unforeseen disruption.

  • Be ready to report material operational incidents to the FCA in a timely way.

  • Be alert to the risk of false information being shared about the operations of a particular firm or the financial services sector.

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United Kingdom: Joint FCA, BoE and OFSI statement on sanctions and the cryptoasset sector

On 11 March 2022, the FCA published a joint statement with the Bank of England (BoE) and the Office of Financial Sanctions (OFSI) on financial sanctions and the cryptoasset sector in the light of the conflict in Ukraine.

The statement outlines the legal and regulatory requirements on all firms, including those in the cryptoasset sector. The statement explains that financial sanctions do not differentiate between cryptoassets and other forms of assets, and as a result, the use of cryptoassets to circumvent financial sanctions is a criminal offence.

The FCA has written to all registered cryptoasset firms and those holding temporary registration status to highlight the application of sanctions on various entities and individuals.

Firms are reminded to check the financial services register to identify whether any cryptoasset business they do business with is registered or to check the equivalent register of the jurisdiction in which the cryptoasset business is based.

The statement also identifies steps firms can take to reduce the risk of sanctions evasion via cryptoassets. It stresses that authorities are ready to act in the event of sanctions breaches.

All the latest developments and updates to the key international sanctions regimes can be found on the Hogan Lovells Sanctions Navigator.

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United Kingdom: FCA publishes third consumer investments data review

On 3 March 2022, the FCA published its third consumer investments data review, which covers the period from April to September 2021 and provides information on the regulator's authorisation, enforcement and registration activities. The FCA’s findings included an increase in reports about possible cryptocurrency scams, both to its Supervision Hub (up 14% on the previous six months) and its ScamSmart website (up 49%). The FCA’s Cryptoasset team opened over 300 cases relating to potential unregistered cryptoasset businesses in this period, many of which are likely to be involved in scams. During the same period, it added 172 firms to its Unregistered Cryptoasset Businesses list.

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United Kingdom: Dormant Assets Act receives Royal Assent

On 24 February 2022, the Dormant Assets Act 2022 received Royal Assent, becoming law in the United Kingdom.

Among other things, the Act amends the Dormant Bank and Building Society Accounts Act 2008 to expand the existing dormant assets scheme to a wider range of dormant assets. This includes assets in the insurance and pensions, investment, wealth management and securities sectors. The dormant assets scheme enables unclaimed funds to be reinvested for the benefit of social or environmental purposes while protecting the rights of the individual customer.

The expansion of the scheme is expected to unlock a further £880 million of dormant assets – these are accounts that have been open but unused for at least 15 years and with which the provider has been unable to reunite the owner.

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United Kingdom: FCA launches new webpage on bank branch and ATM closures

On 23 February 2022, the FCA published a new webpage on bank branch and ATM closures or conversions, highlighting examples of good practice and areas for improvement and referring to its September 2020 final guidance outlining its expectations of how firms should conduct their closure processes. The FCA is seeking to ensure that closures and conversions of bank branches and ATMs are made in a way that takes proper account of customers' needs.

The webpage is part of the FCA's wider work on access to cash and banking services. The FCA explains that it will continue to supervise bank branch and ATM closures and conversions to ensure the fair treatment of customers. It is also supporting the government as it develops legislation to protect access to cash.

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United Kingdom: PSR issues new direction on maintaining free-to-use ATMs

On 3 March 2022 and following a consultation (CP21/9), the Payment Systems Regulator (PSR) issued a new specific direction (specific direction 12 or SD12) to Link Scheme Holdings Ltd (LINK) on maintaining free-to-use (FTU) ATMs in the UK. The PSR has also published a summary cost benefit analysis of SD12, the stakeholder submissions to CP21/9 and its response to feedback on CP21/9.

SD12 replaces the previous specific direction 8 (SD8) with effect from 3 March 2022.

The PSR explains that LINK has done a good job in supporting the broad geographic spread of FTU ATMs in the UK, supported by SD8. Accordingly, SD12 maintains a similar focus. However, reflecting the overall success of LINK's commitments, the PSR has made some changes to provide LINK with greater flexibility in the application and revision of its policies. The key changes are to:

  • Replace the "1km rule" with a "defined radius", giving LINK more flexibility to implement its policies to protect the geographic spread of ATMs.

  • Add a non-objection clause, allowing the PSR to object if LINK proposes to change its policies, if the PSR believes the change is likely to have an adverse impact on LINK's commitment.

  • Simplify monitoring requirements to reduce LINK's monitoring burden.

  • Require LINK to provide an annual report to the PSR that outlines the considerations given to improving resilience of the ATM replacement procedure.

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United Kingdom and Singapore: New digital trade deal signed

The new digital trade deal (the Digital Economy Agreement or 'DEA') was signed by the UK and Singapore on 25 February 2022, which followed the announcement of an agreement in principle on 9 December 2021. The DEA will enter into force after both parties have completed their respective domestic ratification and implementation procedures.

The DEA includes commitments:

  • Not to impose customs duties on electronic transmissions;

  • To support the development of safe and secure cross-border electronic payments, including by adopting internationally accepted standards and promoting interoperability between e-payment systems; and

  • To permit the transfer of financial information and data, promote transparency for accessing electronic payments, and co-operate on international standards and on innovative financial services such as financial and regulatory technology.

The parties have also committed to revitalise the existing UK-Singapore FinTech Bridge, and have signed a memoranda of understanding on cybersecurity, digital identities, and the digital facilitation of trade.

The UK has recently negotiated ambitious digital provisions in its trade agreements with Japan, Australia and New Zealand (see the next item), and is currently in negotiations with Israel, China and Mexico.

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United Kingdom and New Zealand: New free trade agreement signed

On 28 February 2022, the UK and New Zealand signed a new free trade agreement (FTA), which is the second brand new FTA to be negotiated by the UK post-Brexit, following the signing of an FTA with Australia in December 2021. The FTA is broad in scope and includes, for example, commitments relating to:

  • Trade in services and investment, and sectoral commitments on financial services, telecommunications, legal services and other areas.

  • Special visa arrangements for contractual service suppliers, independent professionals, intra-corporate transferees and business visitors.

  • Digital trade and cross-border data flows.

  • Regulatory standards, including in relation to labour and environmental standards and competition policy.

The parties will now need to complete their domestic requirements to ratify and implement the FTA before it can enter into force. The UK government has explained in its draft explanatory memorandum that it will need to introduce new primary and secondary legislation to implement the FTA.

The House of Commons International Trade Committee has published a new call for evidence seeking views on the new FTA by 3 April 2022.

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United Kingdom: Economic Crime (Transparency and Enforcement) Act 2022 receives Royal Assent

On 15 March 2022, the Economic Crime (Transparency and Enforcement) Act 2022 (ECA 2022) received Royal Assent. The government expedited the Parliamentary process for this new legislation in light of the Russia/Ukraine conflict.

The ECA 2022 establishes a register of overseas entities and their beneficial owners and requires overseas entities who own land to register in certain circumstances (Part 1). It also makes amendments to financial sanctions law (Part 3) and reforms the UK’s Unexplained Wealth Orders (UWOs) to empower criminal investigators (Part 2).

Parts 1 and 2 of the ECA 2022 come into force on such day as the Secretary of State may appoint in regulations. Chapter 1 of Part 3 comes into force on such day as HM Treasury may by regulations appoint. Chapter 2 (Imposition of sanctions etc) of Part 3 came into force on 15 March 2022 (the day the Act was passed).

All the latest developments and updates to the key international sanctions regimes can be found on the Hogan Lovells Sanctions Navigator.

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United Kingdom: Economic crime (anti-money laundering) levy (ECL) developments

On 1 March 2022, the Finance Act 2022 was published. Among other things, Part 3 of the Act contains provisions relating to the new economic crime (anti-money laundering) levy (ECL). The ECL will be imposed on businesses subject to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017/692). It will be used to help fund new government action to tackle money laundering and ensure it delivers on reforms set out in the Economic Crime Plan 2019-22. The FCA will collect the ECL from firms it supervises.

The ECL is intended to raise approximately £100 million per year and the first levies will be collected in 2023-24 based on UK revenues reported in 2022-23. The government has promised to undertake a review of the ECL by the end of 2027.

The Act received Royal Assent on 24 February 2022. The provisions in Part 3 will take effect for the financial year beginning in April 2022.

On 10 March 2022, the Economic Crime (Anti-Money Laundering) Levy Regulations 2022 (SI 2022/269) were made. They provide for the assessment, payment, collection and recovery of the ECL. The explanatory memorandum to the Regulations confirms that regulations dealing with appeals, debt transfers, information sharing and enforcement will be laid in draft "later in 2022", and that guidance will be published in Autumn 2022.

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United Kingdom: FCA updates SCA webpage in relation to reauthentication exemption

On 1 March 2022, the FCA updated its webpage on strong customer authentication (SCA) to add a new section containing information relating to the SCA reauthentication exemption. 

In the new section, the FCA explains that, following consultation, it introduced several changes to its technical standards on SCA and common and secure methods of communication (UK SCA-RTS). These changes were set out in a November 2021 policy statement.

The changes include the creation of a new exemption under Article 10A of the UK SCA-RTS that, if adopted by account servicing payment service providers (ASPSPs), means customers will not need to reauthenticate when they access their account information through a third party provider (TPP). Instead, TPPs will be required to obtain explicit consent from customers at least every 90 days.

The FCA strongly encourages ASPSPs to apply the exemption as soon as possible after the changes to the UK SCA-RTS come into effect on 26 March 2022, with a view to the widespread adoption of the exemption by 30 September 2022. It states that implementing this change will help remove the barriers the FCA has identified to the continued growth of open banking and support competition and innovation in the sector.

The FCA expects TPPs to be technically ready to reconfirm customer consent under Article 36(6) of the UK SCA-RTS as soon as possible after 26 March 2022. However, until 30 September 2022, the FCA will not object if TPPs do not reconfirm customer consent, provided SCA is applied at least every 90 days during that period. This approach is designed to limit the risk of consumer disruption and ensure that either SCA has been applied or re-consent obtained in any 90-day period.

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United Kingdom: Fraud Act 2006 Committee publishes call for evidence

On 8 March 2022, the House of Lords Committee on the Fraud Act 2006 and Digital Fraud published its call for evidence, inviting the public to provide their views on what measures should be taken to tackle the increase in cases of fraud. It points out that the pandemic fuelled growth in the use of online services such as banking, and this dependency on digital technology has left more and more people vulnerable to increasingly sophisticated fraudsters. The Committee will look at a wide range of issues including:

  • How the provisions in the Fraud Act 2006 are used in practice for the detection, prevention and prosecution of fraud.

  • Whether the Act is in need of reform.

  • How the Act is being applied to tackle fraud committed online or through digital means.

  • What more needs to be done across the public and private sector to stop fraud committed through digital services.

The deadline for submissions is midday on Friday 22 April 2022.

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United Kingdom: LSB outlines key work programme initiatives for 2022

On 3 March 2022, the Lending Standards Board (LSB) outlined some of its key work programme initiatives for 2022 in its LSBulletin. Among other initiatives, the LSB confirmed that it will continue to work on the Contingent Reimbursement Model (CRM) Code for authorised push payment (APP) scams, including: ​

  • Publishing an updated customer information document; ​

  • Making further updates to the wording of the CRM Code;​

  • Working with the industry to define the CRM Code's success measures;​ and

  • Considering how the CRM Code could be applied more broadly across other business models in the financial services industry, eg cryptocurrencies.

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United Kingdom: FCA announces successful applicants for Green FinTech Challenge

On 3 March 2022, the FCA announced that ten firms have been accepted into its Green FinTech Challenge 2021, five of which are approved for the regulatory sandbox, and the other five will receive the FCA's Direct Support services.

The aim of the Green FinTech Challenge is to support the development and live market testing of new products and services that will facilitate the transition to a net-zero economy. The programme was first launched in 2018, and this (2021) is the programme's second iteration. The FCA has also published a case study of the fintech Cogo, which was part of the 2018 challenge.

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United Kingdom: OFSI launches consolidated sanctions list search tool

On 28 February 2022, the Office of Financial Sanctions Implementation (OFSI) launched a searchable version of the Consolidated List of financial sanctions targets. The platform allows for the option of a "fuzzy search" which will identify close matches even where names are incorrectly or partially entered. The search facility can be broken down by sanctions regime, whether the target is an individual, entity or ship and further differentiates according to whether the target is of the asset freeze or the asset ban type.

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United Kingdom: PRA publishes policy statement on operational resilience and continuity

The PRA has published a policy statement (PS2/22) which provides feedback and final policy following its November 2021 consultation (CP21/21) on operational resilience and continuity in resolution for firms under Solvency II and the Capital Requirements Regulation (CRR) and for financial holding companies.

Following the consultation feedback, the PRA has made amendments to the version consulted on to allow more time for implementation of the governance procedures and to clarify other points raised by respondents.

The amended SS1/21 (‘Operational resilience: Impact tolerances for important business services’) is effective from 31 March 2022. The implementation date for the amended Operational Resilience and Group Supervision Parts of the PRA Rulebook is 31 March 2022, and is 1 January 2023 for the amended Operational Continuity Part of the PRA Rulebook.

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United Kingdom: Digital regulation – DCMS publishes letter to DRCF and summary of views received on government's Plan for Digital Regulation

On 9 March 2022, a letter dated 8 March 2022 from the Department for Digital, Culture, Media and Sport (DCMS) to the Digital Regulation Cooperation Forum (DRCF) was published.

The letter focuses on how the DCMS and the DRFC can collaborate to drive forward a pro-innovation approach to regulating digital technologies, highlighting the government's priorities for the digital regulatory landscape, as well as cross-cutting policy areas relevant to the DRCF's work. Additionally, the letter details the areas where the government thinks the DRFC can make a vital contribution including helping the government to understand:

  • How the DRCF propose to use their horizon scanning capabilities to support the government and wider regulatory community in identifying the key regulatory questions the UK will face in future years; and

  • If there are opportunities for collaboration in the following areas: AI governance; online advertising; supporting the government's ongoing implementation of the National Data Strategy, particularly in relation to data availability for the economy and society; and ensuring cooperation and coherent regulatory approaches on online safety, data, and competition policy.

Also on 9 March 2022, the DCMS published a summary of views received on the government's Plan for Digital Regulation (July 2021), which set out the government's vision for a pro-competition and pro-innovation approach to regulation of the digital sector.

The DCMS describes 2022 as a landmark year for the rules that govern digital technologies. The government intends to establish important foundations for its pro-innovation digital regulatory regime, including a new pro-competition regime for digital markets, reforms to data protection rules and introduction of the Online Safety Bill (which was introduced to Parliament on 17 March 2022 – see the separate item below). The government will set out next steps through its planned Digital Strategy. This will include how it intends to address some of the themes raised in response to the Plan.

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United Kingdom: Online Safety Bill introduced to Parliament

On 17 March 2022, the government introduced its Online Safety Bill to Parliament, following publication of the draft Bill in May 2021 and subsequent redrafting of the proposals.

The main additions to the Bill include new obligations on search engines and platforms hosting user generated content to prevent or minimise the publication and hosting of fraudulent advertising. As well as the Bill and its explanatory notes, the Department for Digital, Culture, Media and Sport (DCMS) has published the government response to the Joint Committee report on the draft Bill (as reported on in the January 2022 edition of this Newsletter) and a press release.

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United Kingdom: Government publishes response to digital identity and attributes consultation

On 10 March 2022, the Department for Digital, Culture, Media and Sport (DCMS) published a response to its July 2021 consultation on digital identity and attributes.

Points of interest include:

  • The government has no plans to make the use of digital identities compulsory. The proposals are limited to creating trust and confidence in digital methods of proving identity and eligibility.

  • Feedback from respondents on the location of a governance function was inconclusive, so the government has decided to establish an interim governance function within the DCMS, to be named the Office for Digital Identities and Attributes.

  • When parliamentary time allows, the government will seek to introduce legislation that will enable a robust accreditation and certification process. This will allow organisations to prove their adherence to the rules of the trust framework. Also, organisations certified against the trust framework will be given a trust mark to demonstrate their compliance and will be defined as being a trust-marked organisation. Details of these organisations will be published by the governance function in a list of trust-marked organisations that would be publicly viewable.

  • The government will also seek to introduce legislation (again, when parliamentary time allows) that will give government departments and agencies the power to allow checks against personal data they hold (with people’s agreement) by trust-marked organisations via a legal gateway. Data held by public bodies that are then shared digitally through the gateway will be equivalent to the same data shared through traditionally accepted forms of identification, e.g. physical passports.

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United Kingdom: FCA and BoE publish Artificial Intelligence Public-Private Forum final report

On 18 February 2022, the Bank of England (BoE) and the FCA published their final report on the role of Artificial Intelligence (AI) in financial services, setting out recommendations on how AI can be safely adopted and used in the financial services sector. Key findings of the report included:

  • The private sector wants regulators to have a role in supporting the safe adoption of AI in UK financial services, building on what they already have. Regulators should provide clarity on existing regulation and policy. ​

  • Firms should have a central body within their organisations that sets out AI governance standards and the role of senior leadership.​

  • There should be an industry body for practitioners, that could set out a voluntary code of conduct, establish an auditing regime and certify practitioners. ​

  • Regulators should identify the most important and high-risk AI cases in financial services with the aim of developing mitigation strategies and policy initiatives. ​

  • There should be more structured and regular engagement on best practices and industry guidelines with a formal consultation process allowing for feedback. ​

The BoE and the  FCA will publish a discussion paper on AI later in 2022 to help address the question of how existing regulation and legislation may be applied to AI and whether AI can be managed through extensions of the existing regulatory framework, or whether a new approach is needed.

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Global: BCBS publishes newsletter on artificial intelligence and machine learning

On 16 March 2022, the Basel Committee on Banking Supervision (BCBS) published a newsletter on artificial intelligence (AI) and machine learning (ML).

The BCBS is analysing banks' use of AI and ML and the potential implications for bank supervision, given the increasing adoption of this technology to improve banks' operational efficiency and risk management. It has identified several areas for continued analysis by supervisors, including in relation to outsourcing of development of AI-ML models, cyber risk and data governance, and the risks arising from biases and inaccuracies in the data that AI-ML models are trained on. The BCBS also highlights the importance of banks having appropriately skilled staff, including model developers, model validators, model users and independent auditors.

In terms of next steps, the BCBS will focus on the extent and degree to which the outcomes of models can be understood and explained and the governance structures for AI-ML models, including responsibilities and accountability for decisions. It will also consider the potential implications of broader usage of AI-ML models for the resilience of individual banks and for financial stability.

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United Kingdom: FOS Quarterly complaints data

On 23 February 2022, the Financial Ombudsman Service (FOS) published its quarterly complaints data on financial products and services for October to December 2021.

The data shows that complaints about current accounts, credit cards, car or motorcycle insurance, personal loans and packaged bank accounts feature in the top five most complained about products. Except for packaged bank accounts, these products have featured in the top five since the first quarter of this financial year. In a related press release, the FOS explains what it considers a mis-sold packaged bank account to be.

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United Arab Emirates: Dubai adopts new Virtual Asset Regulation Law

On 9 March 2022, it was reported that the emirate of Dubai has adopted its first law governing virtual assets – the Dubai Virtual Asset Regulation Law. A new agency, the Dubai Virtual Assets Regulatory Authority, will supervise the development of a business environment for virtual assets in terms of regulation, licensing, and governance.

The new Law will be applicable throughout Dubai, including special development zones and free zones, except for the Dubai International Financial Centre (DIFC). The DIFC's regulator, the Dubai Financial Services Authority (DFSA), is reportedly working on its own regulation of the virtual asset market.

The Law will become effective on its publication in the Official Gazette.

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Australia: SEC’s 2022 priorities to include addressing deceptive crypto promotions

On 3 March 2022, the Chair of the Australian Securities and Investments Commission (ASIC), Joe Longo, set out ASIC's priorities for 2022 in a speech.

The speech highlighted the growing number of scams relating to unregulated cryptoassets and set out the ASIC's intention to address the deceptive promotion of riskier asset classes such as crypto. The speech also covered the work carried out by the ASIC Regulatory Efficiency Unit, which will be tasked with addressing the unregulated cryptoasset scams issue.

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Japan: Amendments to Act on the Protection of Personal Information

On 1 April 2022, amendments to the Japanese Act on the Protection of Personal Information (APPI) will take effect, requiring companies to take additional measures to protect the personal data of data subjects. For more on this development, take a look at these Engage webinars led by members of Hogan Lovells' Tokyo office.

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Global: FATF amends Recommendation 24 on beneficial ownership

On 4 March 2022, the Financial Action Task Force (FATF) formally amended  Recommendation 24 (on transparency and beneficial ownership of legal persons) of its International AML and CTF Standards to require its member countries to collect information on the beneficial ownership of legal persons through a combination of different mechanisms. Member countries will have to hold the information either through a publicly managed registry or an equivalent alternative mechanism.

FATF says its recent mutual evaluations of various jurisdictions have shown a 'generally insufficient level of effectiveness in combating the misuse of legal persons for money laundering and terrorist financing globally'. Both the evolving AML risks and the widely publicised leaks of misuse of shell companies show that the current standards need to be updated.

The amended Recommendation also imposes further restrictions on bearer shares and more robust transparency requirements for nominee arrangements.

FATF is also reviewing Recommendation 25, which covers the beneficial ownership of legal arrangements other than legal persons.

FATF expects all countries to take concrete steps to implement the new standards promptly.

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United Kingdom: Ring-Fencing and Proprietary Trading (RFPT) Review Panel publishes final report

On 15 March 2022, the Ring-Fencing and Proprietary Trading (RFPT) Review Panel published its final report and a related press release (the Panel’s interim statement was reported on in the February 2022 edition of this Newsletter).

The Panel concludes that the ring-fencing regime is worth retaining at present, although it considers that the benefits of the regime will diminish over time, especially as the UK's bank resolution regime is embedded. On proprietary trading, the Panel considers that, while the risks of these activities in the UK banking sector are appropriately mitigated, risks from proprietary trading activities undertaken in the non-bank sector should be monitored and mitigated. Its recommendations on the ring-fencing regime (RFR) include the following:

  • The scope of the RFR should be changed to focus on large, complex banks. While the deposit threshold of £25 billion should be retained, banks with deposits above £25 billion that do not undertake excluded activities above a certain level should be exempt from the regime.

  • HM Treasury should consider how to align the ring-fencing and resolution regimes, with a view to introducing a power for the authorities to remove banks that are judged to be resolvable from the RFR.

  • The restrictions on servicing relevant financial institutions should be adjusted. ​

  • Ring-fenced banks should be permitted to establish operations or service customers outside the EEA.

  • The excluded activities under the RFR should be reviewed.​

In a statement made to the House of Commons, John Glen MP, Economic Secretary to the Treasury, stated that HMT welcomes the Panel's recommendations. It will establish a taskforce with the Bank of England with immediate effect to assess the recommendations and options for taking them forward. HMT will publish a formal response later in 2022.​

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Payment Market Developments

Argentina: Santander launches agriculture loans secured by cryptoassets

On 7 March 2022, Santander announced that it is working with Agrotoken, the first global tokenisation infrastructure for agricultural commodities, to offer loans to the agricultural sector in Argentina, secured by tokens related to agricultural products such as soya beans, corn and wheat. According to the announcement, this is the first global experience in backing loans with tokens related to agricultural commodities.

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Sweden: Swedish bank Rocker launches biometric cards to consumers

On 28 February 2022, Swedish digital bank Rocker partnered with IDEMIA and IDEX Biometrics to launch Rocker touch, a biometric card for consumers. The biometric card allows customers to use their fingerprints to make payments instead of using their PIN numbers, enhancing security.

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United Kingdom: Lloyds Bank announces £1 billion three year digitalisation strategy

On 24 February 2022, Lloyds Banking Group announced it plans to spend £1 billion over the next three years on overhauling its technology infrastructure and self-service capabilities. This overhaul will involve the offering of new products and services that will help their customers and businesses become more efficient and agile.

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Vietnam: Visa partners with VNPAY to drive digital payments across Vietnam

On 23 February 2022, Visa announced its strategic partnership with Vietnam-based fintech, VNPAY, to make cashless payments more accessible across Vietnam. Together they will expand and strengthen the Visa network across Vietnam and encourage the rapid adoption of contactless payments.

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Global: Vodafone launches blockchain Economy of Things platform

On 28 February 2022, Vodafone launched a new global blockchain-based Economy of Things platform, which enables connected devices to perform secure automated transactions on a customer's behalf. The platform enables devices to communicate and transact securely with other devices using wallet and payment technology secured by the mobile SIM.

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United States: Shake Shack launches bitcoin rewards for customers

On 14 March 2022, popular burger chain Shake Shack launched a new bitcoin-based rewards programme for all payments made via Cash Card, a blockchain-based payment system. The programme is an effort to attract younger consumers and test potential long-term adoption.

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Ukraine: Revolut launches payment services for Ukrainian refugees

On 14 March 2022, Revolut announced that it is offering payment services for anyone fleeing Ukraine, as well as providing access to additional currencies and saving mechanisms. They have also eased requirements on setting up an e-money account so that those fleeing can set up an account as soon as possible.

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United States: Buy-Now-Pay-Later platform Klarna announces 'Klarna Card' to the US market

On 17 February 2022, Klarna, the Buy-Now-Pay-Later platform, announced that its waitlist for the Klarna Card is open to all US customers. The launch of the physical Klarna Card in the US comes 3 weeks after the UK rollout drew close to half a million sign ups.

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Global: CloudPay partners with Visa to deliver faster digital pay options

On 15 March 2022, it was reported that CloudPay, a global employee pay solutions provider, announced a new partnership with Visa to reduce payroll payment cycles that typically take 2-3 days through banking systems, down to seconds.

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Surveys and Reports

United Kingdom: Amount spent per contactless payment rises by almost 30%

On 16 March 2022, UK Finance published its latest card spending data. This data shows the average amount spent per contactless card transaction rose by almost 30% following the contactless limit increase to £100 in October 2021.

In September 2021, when the contactless limit was £45, the average spend per contactless payment was £11.86. This increased to £15.30 in December. The total value of contactless transactions in 2021 also increased, reaching £165.9 billion. This is 46% higher than in 2020 and 106% more than 2019.

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United States: Visa survey shows the growing importance of mobile spending

On 7 February 2022, Visa announced the results of their study on the mobile spending habits of smartphone users.

In particular, the survey notes that:

  • 83% of smartphone users view their connected devices as a way to save time and reduce frustration when paying for things.

  • Online spending is especially gaining traction in the clothing, home furnishings and electronics categories.

  • When it comes to buying travel services, consumers shop online 35% more than in a physical store.

  • When it comes to buying entertainment (other than reading materials) consumers shop online 30% more than in a physical store.

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Asia: Asian markets account for 43% of global cryptocurrency activity

In early 2022, Chainanalysis published its 2021 Geography of Cryptocurrency report.

According to the report, Asian markets accounted for 43% of global cryptocurrency activity or $296 billion in transactions between June 2020 and June 2021. The report further highlighted that the Central and Southern Asia and Oceania crypto market is the fourth largest in the world, and transaction activity there increased 706% in the same time frame.
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Authored by Virginia Montgomery and Julie Patient

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