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Prosek’s Financial Regulation Roundup: May 19, 2017

Rupert Eyles

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:


  • The pending repeal of Dodd-Frank, formerly a rallying point for the GOP, now seems to be the last thing on anyone’s mind this week. After the reveal of the “CHOICE” act earlier in the month, Trump mandated a piece-by-piece review of Dodd-Frank which will no longer be complete in early June as anticipated. Affairs surrounding Comey’s recent dismissal may delay matters even further (read here).

G-7 Meeting

  • At the recent G-7 meeting in Bari, Italy, finance ministers and central bankers from the world’s foremost economic powers advised members of the Trump administration against breaking the “global consensus” for healthy trade and financial regulation. French Finance minister Michel Sapin stated that it was in the interest of the U.S and the world to let free trade continue unabetted (read here).


  • IBM has begun to direct the focus of its Watson AI division towards financial regulation. Beginning with key compliance points—familiarity with AML, KYC and surveillance—IBM hopes to use the adaptive learning technologies of Watson to create a repository of regulatory data that can better aid compliance officers (read here).


  • A New York based Bitcoin broker has asked the SEC to propose rules which would formally cover blockchain based assets. The unregulated nature of such currencies has long been an appeal for some investors, but the SEC’s relative silence on the matter has unnerved more conservative parties with an interest in cryptocurrency (read here).

E.U. News:


  • FT Investment Adviser reports that a requirement for clients to receive tailored data about their holdings in a given fund will be a source of potential issues for compliance professionals. Post-sale reports especially are anticipated to create a great deal of headache, as they require personalized breakdowns of an investor’s holdings in a given fund (read here).

FCA to Repeat Suitability Review in 2019

  • The Financial Conduct Authority (FCA) has announced that it will repeat its suitability review in 2019. Alongside the findings of the current review, the FCA said it would repeat the suitability review in 2019 to look at how advisers have complied with new rules such as MiFID II. The FCA has said they intend to measure how the sector has responded to their findings and communications plan and will not only look at suitability of advice and compliance with their disclosure rules, but also compliance with any new relevant rules, including those under MiFID II, PRIIPS and IDD (read here).

FCA Launches Retail Banking Review

  • The FCA has launched a review into the business model of retail banks, due to the significant economic, technological, social and regulatory changes the sector faces. In a statement the FCA said: “We have been considering what we need to do in order to build a robust evidence base to enhance our understanding of the state of competition and conduct in retail banking markets at a pivotal time of change (read here).

Banks Face Overhaul of Bond Syndication Ahead of Mifid II

  • Bankers who help companies and governments raise debt are starting to grapple with a little-noticed part of sweeping regulations set to come into force next year: a demand to justify decisions about which investors get to buy a bond. The rule, part of the EU’s looming Mifid II regulation, is forcing banks to make sweeping changes to the way they sell bonds in the primary market as regulators push for greater clarity on how dealmakers operate. The update to the Mifid rules takes effect in January and entails far-reaching implications across European financial markets, with much of the focus on the way banks charge for research and ensure transparency in secondary market bond trading (read here).

Bank of England

  • The BoE announced that it would widen access to its interbank payment system, allowing financial firms of a variety of sizes to access the high-speed transaction infrastructure that handles the bulk of the country’s private financial transactions (read here).

Asia News:

China Regulatory Policy

  • Worries regarding excessive or restrictive regulation have had a drastic impact on the Chinese markets for a number of securities. Specifically, the repricing of interbank rates by the central Chinese banking authority has led to worries that selling pressure may increase in the coming months (read here). Perhaps in response, CCP Premier Li-Keqiang indicated (subtly) that China may slow or reconsider its new regulatory policies. A statement from the state news agency indicated his belief that “China should not trigger new risk from managing risks” (read here).

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