Archive: March 2023

In this edition of Regulation Around the World we review the position regarding beneficial ownership registers which has come into the spotlight following work by the Financial Action Task Force and the introduction of reforms in a number of jurisdictions. Identifying beneficial owners has always been a difficult task for both regulators and financial institutions themselves given that it can be obscured through, for example, shell companies and/or complex ownership and control structures, and the position has recently become even more pressing following the sanctions levied on Russia following its invasion of Ukraine. Should beneficial ownership registers become more common they would provide an important tool for cross-checking underlying customer data and proactively identify relevant sanctions exposure by looking beyond immediate corporate ownership.

As privacy laws and requirements become more technically sophisticated, businesses may want to consider how they can follow suit.

Cyberattacks have become more frequent, problematic and complex over the years – so much so that they now represent a real threat to economic activities. The French Information and Digital Security Experts Club (CESIN) has estimated that 54% of French companies were subject to cyberattacks in 2021, while France Assureurs has put cyberattack risks on top of all other risks for the sixth year in a row.

On February 22, the Canadian Securities Administrators (CSA) published Staff Notice 21-332 – Crypto Asset Trading Platforms: Pre-Registration Undertakings — Changes to Enhance Canadian Investor Protection (SN 21-332). SN 21-332 supplements the CSA’s August 2022 update (the August update), which required unregistered crypto asset trading platforms (CTPs) to provide “pre-registration undertakings” (PRUs), pending review of their applications to become registered dealers. The August update effectively modified the registration framework previously set out in Staff Notice 21-329 – Guidance for Crypto-Asset Trading Platforms: Compliance with Regulatory Requirements (SN 21-329).

On 16 March 2023, the FCA published a Dear CEO letter on its priorities for payments firms. The letter was sent to CEOs of firms within the FCA’s payments portfolio, including those authorised or registered under the Payment Services Regulations 2017 (PSRs) and the Electronic Money Regulations 2011 (EMRs).

As many of you are aware, Silicon Valley Bank (SVB), a bank licensed by the State of California whose deposits are insured by the FDIC, was seized by the California Department of Financial Protection and Innovation and placed into FDIC receivership on Friday, March 10.

On 14 March 2022, the Committee on Economic and Monetary Affairs (ECON) published a press release on the European Parliament’s website regarding new rules on cryptocurrencies in the EU. The press release reports that members of European Parliament (MEPs) have agreed on draft rules concerning the supervision, consumer protection and environmental sustainability of cryptoassets, including cryptocurrencies such as bitcoins. The key provisions agreed cover transparency, disclosure, authorisation and supervision of transactions. The agreed text also includes measures against market manipulation and to prevent money laundering, terrorist financing and other criminal activities. To reduce the high carbon footprint of crypto-currencies, particularly of the mechanisms used to validate transactions, MEPs have also asked the Commission to present a legislative proposal to include in the EU taxonomy (a classification system) for sustainable activities any crypto-asset mining activities that contribute substantially to climate change, by 1 January 2025. A decision to enter into negotiations with EU governments on the final shape of the bill was adopted with 33 votes to 25.

Among the documents that the Government published last December as part of its Edinburgh reforms was a consultation paper on reforming the UK’s Consumer Credit Act 1974. We have published a new briefing note on the consultation paper which can be found here.

EDPB Guidelines on the interplay between Article 3 and the provisions in Chapter V of the General Data Protection Regulation on international data transfers

In our previous update, we summarized key operational elements that businesses should be aware of under the proposed Consumer Privacy Protection Act (CPPA), and provided practical tips to help businesses comply with these new requirements. As currently drafted, the CPPA codifies a number of best practices and recommendations issued by the Office of the Privacy Commissioner of Canada under the Personal Information Protection and Electronic Documents Act.