Financial Regulation Roundup: September 22, 2017

Eamon Levesque  Follow

Here are the top stories on the financial regulatory landscape in the U.S., EU and around the world over the past two weeks.

U.S. News:

Dodd-Frank: A Newsweek op-ed this week argued that even though the Dodd-Frank Act was not perfect in all respects, it represents a framework that can mitigate systemic risks. Author Markus Demary of the Cologne Institute for Economic Research argued that the fact that financial market regulation is adjusted from time to time is normal. He posits that instead of rolling back Dodd-Frank, Democrats and Republicans would be better served working to fix the disadvantages of the Dodd-Frank Act without sacrificing its advantages over the pre-crisis regulatory framework. (Newsweek: read more)

Derivatives Rules: Postcrisis derivatives rules should be revised to reflect how markets are functioning nearly a decade after the financial meltdown, senior Trump administration and regulatory officials told an industry gathering on Monday. Policy makers should assess whether rules governing swaps trading, clearinghouses and international coordination have achieved their purpose, and change them where necessary, the officials said. (The Wall Street Journal: read more)

Wells Fargo Scandal: The CFPB calculated that it could have pursued a $10 billion penalty against Wells Fargo over its sales practices scandal before settling on a much smaller fine, according to government documents released by House Republicans on Tuesday. (The Wall Street Journal: read more)

E.U. News:

EU-US officials ‘negotiating intensely’ over transatlantic MiFID II deal: Transatlantic negotiations are underway to secure MiFID equivalence for the securities and derivatives markets. It was announced on Wednesday that a decision on equivalence for US trading venues should be expected in November as opposed to October following delays to negotiations. Hong Kong and Singapore are currently not expected to receive equivalence determinations before next year, prompting talk of delayed implementation of the new trading obligations if an agreement is not reached before the January 3rd deadline. (Financial Times: read more)

FCA strikes fintech agreement with Hong Kong authorities: The Financial Conduct Authority (FCA) has struck a new agreement with the Hong Kong Insurance Authority (IA) to support fintech innovation, to help bolster development of the industry in both territories. The City regulator and the IA have agreed to work together by sharing information, including referrals of innovative firms seeking to enter the counterpart's market. (CityAM: read more)

FCA finalises PSD2 requirements: The FCA has published its approach to implementing the revised Payment Services Directive (PSD2). PSD2 aims to improve consumer protection, make payments safer and more secure, and drive down the costs of payment services. The new regime will be in force from 13 January 2018. More services will be brought within the FCA’s scope by PSD2, including account aggregation services which aim to help consumers manage their finances by bringing all of their bank account data together in one place, and services that allow consumers to make payments in different ways online without using a credit or debit card. (FinExtra: read more)


MiFID II: Mizuho Financial Group Inc. will start artificial-intelligence trading this month to bolster its Japanese equity business, according to people with knowledge of the plan. Japan’s third-biggest lender will begin offering an algorithm-based AI trading service to some large institutional clients in Japan and elsewhere in Asia. Global banks are seeking to improve the quality of their trading execution and equity research before the European Union’s revision of MiFID II comes into force in January. (Bloomberg: read more

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