2022 horizon scanning: Regulation around the world

We look ahead to the trends and new requirements that we may see over the next twelve months for institutions operating in the financial services space.

A number of common themes are emerging. For example, automation and digitalisation will continue to be key issues with consumers expecting greater choice and flexibility in their relationships. As a consequence of this consumer protection, transparency and the strengthening of financial services regulation will continue to be a key focus for regulators. ESG will be another key theme for 2022 with a general expectation that we may see some enforcement action on disclosures. Keeping with enforcement, the regulatory focus on anti-money laundering and financial crime generally looks set to continue as does an increase in whistleblowing complaints.

Key risks include:

• UK – The Financial Conduct Authority is expected to publish by the end of July 2022 its final rules for a new Consumer Duty and its appetite to open enforcement investigations and take enforcement action in relation to financial crime shows no sign of waning. HM Treasury’s broad programme of work regarding the UK’s regulatory landscape post Brexit continues and amendments to the UK’s anti-money laundering regime are expected.
• United States – The Securities and Exchange Commission has issued significant new proposals designed to increase the regulation of private equity fund and hedge fund disclosures to investors. The 2022 regulatory agenda impacting the US banking industry is crowded and varied. This includes access to Federal Reserve Bank accounts and payment services with some chartering authorities authorizing novel types of bank charters under state banking laws.
• Europe – A packed legislative agenda includes legislative proposals implementing the final Basel III reforms. Trilogue negotiations on the EU Regulation on digital operational resilience for the financial sector (DORA) are expected to be completed this year. Amendments to MiFID II and MiFIR will also go through trilogue this year (and into 2023).
• Netherlands – A report on expected trends for 2022 from the Dutch Authority for the Financial Markets foresees continued focus on sustainability and anti-money laundering. The Dutch Central Bank will also be spearheading a number of topics this year including technological innovation.
• France - 2022 is a crucial year for France, as it opened with the French presidency of the Council of the European Union. In this unique context, the actions of the French financial markets authority focus, for the greater majority, on collaborating on the elaboration and the implementation of the EU regulatory framework. Also, two bill proposals have been adopted by the French National Assembly that amend the French framework on whistleblowing.
• Hong Kong - Further integration with the Chinese Mainland is expected, e.g. though the bedding in of the Wealth Connect Scheme. An investor identification regime is also expected to be launched in the second half of 2022. Furthermore the Hong Kong Monetary Authority will be considering the responses to its discussion paper on how to expand Hong Kong’s regulatory framework for crypto-assets.
• Australia - A new regulatory and tax framework for the corporate collective investment vehicle commences on 1 July 2022. A new Financial Accountability Regime Bill expands the current Banking Executive Accountability Regime.

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