Regulations Round-Up – April 2021

The financial industry focused on the rising bond yields in the United States and other Western countries in March. There was also a focus on the cryptocurrencies industry as Bitcoin struggled to move above its all-time high. As an agency specialising in financial marketing, our team has rounded up the top regulation changes in March, and now we’re looking at what’s coming up in April 2021.

OkEx shuts South Korea operations

In a statement in March, OkEx, one of the biggest cryptocurrency exchanges in the world, said that it would shutter its South Korean operations. It urged its country’s customers to withdraw their funds by April 7 this year. In a later statement, the company attributed the move to the difficult regulatory environment in the country. The country has recently implemented strict anti-money laundering laws and forced exchanges to report suspicious transactions. Binance, the biggest crypto exchange in the world, has also moved away from South Korea.

India cryptocurrencies ban

In March, the price of major cryptocurrencies declined as the market reflected on the potential cryptocurrencies ban in India. According to Reuters, the government has come up with a bill that will ban mining, trading, and ownership of all cryptocurrencies other than those created by the central bank. If passed, India will be the first major country to ban ownership of digital currencies. Still, while India is a big country, its market share in cryptocurrencies remains relatively low, with estimates placing the total ownership of currencies at more than $3 billion.

ASIC plans on leverage

The Australian Securities and Investment Commission (ASIC) is pressing on with harsh regulations on contracts for difference (CFDs). The regulator has decided to cap the amount of leverage that a broker can offer to their customers to 1:30, in line with the European MIFID regulations. While this move will affect brokers’ income and volume, many of them have welcomed the restrictions as being necessary. The regulations went into effect on March 29 this year.

Thailand regulator withdraws harsh crypto rules

The Thailand Securities and Exchange Commission (TSEC) withdrew the harsh cryptocurrencies regulations it had proposed after it received a substantial backlash from the public. The regulations stated that a crypto investor had to have a minimum net worth of about $33,000, which is high since the country has a GDP per capita of about $7,800. Also, the regulations called for a mandatory disclosure of income. In a statement, the regulator’s Secretary-General backtracked saying:

“I proposed the criteria that many considered too tough to prompt people to express their opinions on the matter and did not intend to say these are the exact qualifications that will be implemented”

ESMA MMF reforms

The European Securities Markets Authority (ESMA) responded to the recent liquidity issues in the money market fund (MMF) industry by launching a consultation process on the needed reforms. The paper will explore reforms dealing with the liabilities side of the strategies, liquidity buffers, and reforms that are external to the strategies themselves. The paper said:

“In this context, this consultation document discusses the potential reforms of the EU MMF regulatory framework that could be envisaged, in light of the lessons learnt from the difficulties faced by MMFs during the COVID-19 crisis in March 2020.”

SEC focuses on SPACs

Special Purpose Acquisition Companies (SPACs) have become relatively popular recently. They have raised more than $70 billion from investors this year. Now, the SEC is starting a review on these vehicles and how Wall Street banks mitigate risks associated with them. It is also looking at the fees the banks charge and other internal protocols.

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