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Mar 21, 2024

This Week in Compliance Vol. 2

this week in compliance spektr 2

What's been occupying our compliance attention lately? Here's a rundown of notable updates and regulatory happenings from the past weeks.

JP Morgan Chase Fined $348M for Surveillance Issues

JP Morgan Chase has been fined $348.2 million by the OCC and the US Federal Reserve for trade surveillance deficiencies. These fines arise from two investigations highlighting monitoring trading activities and market conduct.

The fines highlight regulators' increasing emphasis on market integrity in finance, stressing the importance of trade surveillance in banks and setting a standard for thorough monitoring to prevent misconduct and maintain banking standards.

FCA Identifies Weaknesses in Financial Crime Controls

The Financial Conduct Authority (FCA) has highlighted critical shortcomings in the financial crime controls of banking institutions. Key areas needing improvement include risk assessments, customer due diligence, and transaction monitoring. These gaps pose significant risks, leading to potential regulatory and reputational damage for firms within the banking sector.

The FCA recommends adopting more comprehensive risk assessments and improving customer due diligence and transaction monitoring systems to reinforce financial institutes defenses against financial crimes and uphold the integrity of their financial system.

EU introduces Instant Payments Regulation

The European Council has adopted a regulation to enable instant payments in euros across the EU and EEA, streamlining financial transactions for consumers and businesses. This regulation mandates that payment service providers offer instant euro transfers with charges, if any, comparable to standard credit transfers. The move aims to reduce reliance on third-country financial institutions and promotes the strategic autonomy of the European financial sector.

The new regulation enables cross-border euro transactions, boosting cash flow mobility, yet it introduces AML/CFT challenges. These include the high velocity of transactions potentially undermining conventional money laundering checks and elevating the risk of rapid cross-border movement of illicit funds.

UK FCA Greenlights cETNs for Professional Investors

The UK's Financial Conduct Authority (FCA) has approved Recognised Investment Exchanges (RIEs) to establish a UK-listed market segment for crypto asset-backed Exchange Traded Notes (cETNs), targeting professional investors only. Despite increased data and insights into these products, the FCA maintains a ban on selling cETNs and crypto derivatives to retail consumers.

This decision marks a cautious advancement in the UK's approach to crypto asset regulation, balancing innovation with investor safety. The move also reflects the FCA's ongoing efforts to position the UK as a leader in fintech regulation, highlighting the need for careful oversight in the rapidly evolving digital assets market.

US Agencies Clarify Compliance Under Sanctions Law

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC), the Bureau of Industry and Security (BIS), and the Department of Justice (DOJ) have collaboratively issued guidance on the compliance obligations of non-US companies with US sanctions and export control laws.

This marks a critical step in clarifying the reach of US sanctions and export control laws beyond American borders. It impacts global businesses, particularly those involved in international trade, emphasizing the need for a thorough understanding and management of the associated legal risk. This guidance emphasizes the need for non-US entities to develop compliance programs to effectively manage complex US legal requirements

Nigeria Demands Binance Data Amid Regulatory Tensions

Nigerian authorities have detained two Binance executives and are demanding detailed data on the top 100 local customers, including six-month transaction histories. This move is part of Nigeria's push to regulate cryptocurrency activities and stabilize their currency, the naira.

In response, Binance removed the naira from its trading platform, escalating the situation. Many Nigerian crypto traders are now using platforms like Telegram and WhatsApp for peer-to-peer transactions, bypassing traditional exchanges. This situation highlights the global challenge of regulating digital currencies and the evolving response of crypto exchanges.

At spektr, we understand that keeping up with regulatory changes and maintaining compliance can feel overwhelming. Let's have a chat about your compliance needs and how we can customize solutions to match your unique business requirements!


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