Clifford Chance

Welcome to this week's global fintech round-up, summarising fintech regulatory developments that have happened around the world along with our Clifford Chance fintech publications and upcoming events.

Details of these and previous developments can also be found on our Fintech Topic Guide on the Clifford Chance Financial Markets Toolkit.

SPOTLIGHT: Webinar: Regulating AI - examining glogal developments

In this webinar our expert panel looked at the global development of regulatory frameworks for artificial intelligence (AI), including emerging trends and diverging approaches being taken in different jurisdictions. This included the EU’s AI Act, US developments at federal and state level, the UK perspective and the measures being taken in China to tackle regulation of generative AI and deepfakes.

CLIFFORD CHANCE PUBLICATIONS

• (1 May 2024) Talking Tech article – US Publishes Draft Rules for Cyber Incident Reporting for Critical Infrastructure Companies
• (30 Apr 2024) Clifford Chance webinar – Regulating AI – examining global developments

GLOBAL LEGAL AND REGULATORY UPDATES, INDUSTRY GUIDANCE AND PUBLICATIONS

International

• (2 May 2024) Bank for International Settlements (BIS) working paper which uses granular transaction-level data from the Aave V2 protocol to shed light on agents' motivations to engage in decentralised finance (DeFi) borrowing and lending activity, contrasting them with those in traditional finance to highlight the unique nature of DeFi. | Webpage
• (30 Apr 2024) The BIS Innovation Hub Nordic Centre has launched Project Raven, which is intended to create a new artificial intelligence (AI) solution to help authorities comprehensively assess the cyber security and resilience maturity readiness of their countries' financial systems. | Project webpage

APAC

Indonesia:    

• (4 May 2024) The Commodity Futures Trading Regulatory Agency (Bappebti) has established a new Crypto Asset Committee tasked with encouraging and monitoring the development of cryptoasset trading in Indonesia. | Press release (in Indonesian)

Europe

EU:  

• (7 May 2024) The European Banking Authority (EBA) has published three sets of final draft regulatory technical standards (RTS) and one set of final draft implementing technical standards (ITS) under the Markets in Cryptoassets Regulation (MiCA) relating to: 
• • the authorisation as issuer of asset-referenced tokens (ARTs);
  • the information for the assessment of acquisition of qualifying holdings in issuers of ARTs; and
  • the procedure for the approval of white papers for ARTs issued by credit institutions.
• (2 May 2024) European Securities and Markets Authority (ESMA) Securities and Markets Stakeholder Group advice to ESMA on its consultation papers on reverse solicitation and the qualification of cryptoassets as financial instruments in the context of MiCA. | Webpage
• (2 May 2024) Corrigendum which corrects some minor errors in the adopted text of MiCA, along with extending the period allowed for Member States to make a notification to the EU Commission, ESMA and the EBA about the existence of certain national law administrative penalties and measures in relation to MiCA.

UK:

• (7 May 2024) Speech by Bank of England Financial Policy Committee (FPC) member Jonathan Hall on how the use of AI models could create potential risks to financial stability.
• (1 May 2024) HM Treasury Anti-money laundering and counter-terrorist financing: Supervision Report: 2022-23, which notes the Financial Conduct Authority (FCA)’s view that, in the reporting year 2022-23, cryptoasset firms, along with retail banking (including payments), wholesale banking, and wealth management remained particularly vulnerable to financial crime and posed the greatest risk of being exploited for money laundering.

EVENTS

• Global Financial Markets Perspectives Series: AI Series: Regulation of artificial intelligence in the UK and EU insurance sectors (hybrid, 16 May 2024): Our panel will take a closer look at developments in the regulation of AI systems in the UK and EU that are directed specifically at the insurance sector. This includes comparing the EU AI Act with the latest information on the PRA and FCA’s approach to AI regulation that will affect the insurance sector value chain. We will consider how the insurance sector in the UK and EU could prepare for these new regulations, with a focus on the potential implications for governance arrangements and systems and controls. | To register, please see the event series registration form
• Global Financial Markets Perspectives Series: AI Series: Contracting for AI (online, 13 June 2024): What makes procuring AI different from procurement of other software or services? How does this affect your contract terms and supplier onboarding and management processes? When there is limited scope for negotiation, where should you focus your efforts? In this session we will discuss strategy and practical tips for contracting for AI. | To register, please see the event series registration form