Regulations Roundup January 2020

The past decade has been a tumultuous one for the finance sector, with exciting innovations being interspersed by enhanced regulatory pressure and strict new rules. From GDPR to MiFIDII, a lot has happened with a watchful eye being placed on the crypto/blockchain sector. But, as we enter 2020 and start a brand-new chapter, it’s important to look ahead and see what’s in store. So, we’re back with our Regulations Roundup January 2020. Happy New Year everyone. Here’s to staying in the know and abiding by the law!

Germany Issues New Crypto Regulations

The Amended Directive to the Fourth EU Money Laundering Directive went into force in Germany on January 1, 2020. Some of the key changes affect how the Germany Banking Act and Payment Supervision Services Act relate to crypto. For example, the new regulations state that providers of crypto-custody services in Germany will require a licence from BaFin after January 1. Companies already active in this area will get a grace period if they notify BaFin of their intent before February 1 and file their application before June 30, 2020.

Furthermore, businesses that already provide banking and financial services will not be able to offer crypto-custody services due to heightened IT-security risks. If an institution wishes to offer custodial services, they must go through a subsidiary.

The Fifth Anti-Money Laundering Directive Hits Europe

The Fifth Anti-Money Laundering Directive, also known as 5AMLD, is a new piece of legislation that brings fiat-to-crypto exchanges and custodial wallets across the EU under a new regulatory framework. In a first-of-its-kind transition effecting businesses across the continent, 5AMLD notes that member states must implement AML regulations. Exchanges will be obliged to follow Know Your Customer (KYC) rules for monitoring customer transactions and file suspicious activity reports.

China Think-Tank Calls for AI Regulations in Finance

The finance industry is evolving at a rapid rate, with AI increasingly being integrated into the sector, particularly from a trading perspective. For this reason, policy advisers have suggested implementing a regulatory framework for AI in finance.

Xiao Gang, a senior researcher at the China Finance 40 Forum said:

“We should not deify artificial intelligence as it could go wrong just like any other technology.” He added, “The point is how we make sure it is safe for use and include it with proper supervision.”

The evaluation of emerging technologies and industry-wide contingency plans are being considered. Zhang Chenghui, chief of the finance research bureau at the Development Research Institute of the State Council said.

“Changes have to be made among policy makers. We suggest regulation on intelligent finance to be written in to the 14th five-year plan of the country’s development and each financial regulator – including the central bank, banking and insurance regulators and the securities watchdog – should appoint its own chief technology officer to enhance supervision of the sector.”

Top Finance Events to Watch for in January:

  • Cyprus Fintech 3.0 – 16 January

Here at Contentworks, we’re particularly excited to attend and media partner the Cyprus Fintech 3.0 summit. This will take place on 16 January 2020 at the Hilton Nicosia. As a free one-day event covering all things fintech including challenges and opportunities, the expo will kick-start another exciting year welcoming a wide range of international speakers and fintech pioneers.

If you would like to arrange a meeting with the Contentworks team in advance, please contact us today.

Other great events include:

  • Paris Fintech Forum – 28-29 January 2020 – Paris, France
  • Digital Transformation in Banking – January 30 – London UK

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