November was a busy month in the regulatory space as policymakers reacted to the election of Donald Trump in the United States. This election means that US policies will start to change, reflecting the new Republican majority in the Senate, House of Representatives, and presidency. As an agency specialising in financial services marketing, our team has rounded up the biggest changes that happened last month and what’s coming up. Here’s our Regulations Roundup, December 2024.
Donald Trump considers Paul Atkins to head the SEC
The Securities and Exchange Commission (SEC) is preparing a change in guard after Trump’s win. While his decision on the next leader has not been announced, media reports say that the potential head will be Paul Atkins, a veteran regulator.
Atkins is favoured by Wall Street because of his embrace for soft-touch regulations. He is also a proponent of cryptocurrencies like Bitcoin and Ethereum. As such, his nomination would be a fulfilment of Trump’s campaign pledge of being a crypto friendly president.
Some of the other names who have been floated to head the agency are Brian Brooks and Robert Stebbins. Brooks is a former head of the Office of the Comptroller of Currency (OCC), while Stebbins is a former SEC General Counsel. Dan Gallagher, a top lawyer at Robinhood Markets, who was a potential candidate removed himself from consideration.
The next SEC head will be different from Gary Gensler, a regulator who mostly focused on legislation by enforcement. In his tenure, he filed multiple lawsuits, including one against companies like Immutable, Ripple Labs, and Coinbase.
ESMA considers shortening trade times
In Europe, the European Securities and Markets Authority (ESMA) proposed changing trade settlement times, a move that will align with the UK’s plans to change its capital markets.
If enacted, these changes will take place as from October 11 2027. The goal is to modernise and boost liquidity in the market. It also hopes to have more companies go public, a trend that has lost steam in the past few years. The UK is also planning to shorten the settlement time in 2027.
These actions will also happen after the US shortened the window for finalising trades. This action was one of the most comprehensive changes in the US financial markets as it increased liquidity and reduced the risk of failed trades.
FCA and Financial Ombudsman Service new compensation rules
In the UK, the Financial Conduct Authority (FCA) and the Financial Ombudsman Service (FOS) proposed a new system to handle complaints in a bid to ease regulations.
The redress rules seek to remove the regulatory burden that happened since the Global Financial Crisis in 2008. Some of the potential changes include giving companies longer to respond to customer complaints and reducing the scope of appealing against ombudsman decisions.
In other major regulatory issue from the UK, the FCA said that the agency will fundamentally reshape its plans to name and shame more companies it investigates.
The new changes came after the agency noted that it would name and shame companies it investigates at a much earlier stage to increase deterrent. According to Nikhil Rathi, FCA’s head, the new changes would give companies a ten-day notice before disclosing they were being investigate. The previous proposals called for just a day of notice.
Hedge funds wins as judge tosses crucial SEC rule
In the US, Judge Reed O’Connor, sided with hedge funds who filed a case against the Securities and Exchange Commission. The new ruling related to a case that would have required some hedge funds to register as dealers in the Treasuries market.
Hedge funds that filed the lawsuit argued that the regulation was too broad and that it would have caused some firms to pull back from trading. The judge ruled that the SEC engaged in unlawful agency action taken in excess of its authority.
Analysts expect the SEC to file an appeal at the 5th US Circuit Court of Appeals in New Orleans. Judges there recently ruled against the agency in a rule that required more fee transparency from hedge funds and private equity companies.
Russia unveils new crypto tax law
In Russia, President Vladimir Putin created a framework to tax cryptocurrency mining and transactions. The new law recognises cryptocurrencies as property in amendments to the tax code.
It also exempted cryptocurrency mining and sales from the value-added tax (VAT). in its place, companies will be required to report to authorities or pay a fine of about 40,000 Rubles or $380.
Cryptocurrency trading will be subject to income taxes that start at 13% of earnings for up to $22,300 and 15% above that. These are notable regulations since Russia is one of the leading countries in Bitcoin mining because of its low energy costs. The government hopes to collect about $2 billion from miners annually.
Mexico’s changing regulatory environment
Mexico is bracing for more changes after the Senate voted to eliminate autonomous regulatory agencies and transfer their functions to the executive branch. The reform proposes scrapping autonomous agencies like antitrust watchdog Cofece, telecoms regulator IFT, energy regulator CRE, hydrocarbon regulator CNH and public information and data protection office INAI.
Their functions would be taken over by other government bodies such as the official statistics office, the electoral authority and government ministries. This overhaul has sparked concerns about growing government control of the economy. corruption and a loss of transparency.
The Senate voted 86-42 on Thursday in favour of the constitutional changes.
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