As finance leaders return from summer vacations and trading increases, all eyes are back on the markets and their regulators. 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 in September. Here’s our Regulations Roundup – September 2024.
SEC Turns Down Solana ETF
The Securities and Exchange Commission (SEC) has been in the spotlight this year after it approved spot Bitcoin and Ethereum Exchange Traded Funds (ETFs) in January and July, respectively. The focus among investors was on whether the agency would approve a spot Solana ETF since it is similar to Ethereum. Odds of a Solana ETF retreated after the SEC turned down the 19b-4 application by the Cboe BZK on behalf of two ETF issuers. The SEC rejected the view, noting that it still believed that Solana was a security because of its staking features. Staking is a process where SOL holders delegate their tokens to secure the network. These holders then earn a return each month. The SEC believes that the holders should have more clarity about how this staking works and how their funds are used.
UK Crypto Registrations Fall
In the UK, applications to register as a crypto asset exchange or custodian wallet continued falling in August. Data shows that these applications fell by 51% in the last three years even as the industry continued growing. The FCA reported that 29 applications happened between May 2023 and April this year.
According to UK laws, all companies offering crypto exchange and wallet services are required to register with the FCA. The FCA then spends an average of 311 days to process and approve applications, a time that many people in the industry believe is hindering the country’s goal of becoming a crypto hub.
Nigeria SEC To License Crypto Exchanges
In Nigeria, the Securities and Exchange Commission announced that it would start licensing crypto exchanges to tap opportunities and protect investors. Nigeria hopes that licensing crypto exchanges and other companies in the industry will help it become a major player in the industry. This is a big reversal since the country banned banks from supporting crypto trades a few years ago.
Nigeria is learning from other countries that have imposed regulations in the industry. Regulators in countries like the United States, the United Kingdom, and the European Union have launches regulations in the past few years.
SEC Sends Wells Notice To Open Sea
In the United States, the SEC continued with legislation enforcement in August. The agency sent a Wells Notice to OpenSea, the biggest NFT marketplace in the industry. A Well’s notice comes before the SEC files charges against a company.
In a post, the company said that the SEC has accused it of offering NFTs to the public. It believes that these products are securities, which should be regulated. An OpenSea statement said:
We hope that the SEC will reconsider its stance and approach this issue with the open-mindedness it deserves. Until then, OpenSea remains committed to standing up for our vision of a better internet—one that empowers individuals and fosters creativity, rather than stifling it with unnecessary regulatory burdens.
Before that, the agency sued Impact Theory for offering unregistered securities in the firm of securities. The SEC has charged other companies in the crypto industry like Kraken, Coinbase, Consensys, and Uniswap for offering securities before.
ASIC Pilots New Portal For AFS Applications
The Australia Securities and Investments Commission (ASIC) is working to improve its services to companies in the financial industry. One area that the agency has come under pressure in the past was its registration of financial service registrations.
ASIC launched a pilot portal for licensing, which includes applying, varying, and cancelling an Australian Financial Services (AFS) license. It hopes that the new portal will simplify the experience of license applicants. All licensees will be required to transition to the portal in the first quarter of 2025.
ASIC Launches New Strategic Priorities
Meanwhile, the agency unveiled new strategic priorities for the next 12 months as it seeks to improve its services to consumers. Its key areas will be on improving consumer outcomes such as battling predatory lending and insurance claims handling.
ASIC will also address financial system climate change risk by improving climate disclosures, greenwashing, and insurance claims handling.
The other key areas will be on improving retirement outcomes for Australians, advancing digital and data reliance, and driving consistency and transparency across markets and products.
China Regulator Assesses Risk Of Stronger Yuan
In China, the State Administration of Foreign Exchange is assessing the impact of the strong yuan on exporters. The agency sent surveys to regional branches of state-owned lenders on issues like hedging costs, currency risks, and the impact of the yuan on profits.
The Chinese yuan has strengthened moderately against the US dollar and other currencies recently. It has risen by over 3.5% from its lowest point this year. A stronger yuan hurts Chinese companies that focus on exports.
Other countries like Switzerland and Australia are also assessing the impact of the stronger local currencies on their exporters.
South African Regulator Cautions Against Prescribed Assets Plan
The main financial regulator in Africa has cautioned against a proposal that will compel pension funds to invest in government-approved instruments. The regulator argues that mandating firms to invest in these industries could compromise returns and affect retirees’ incomes. The regulator said:
There’s a fiduciary duty in the Pension Funds Act, which requires trustees to exercise proper duty toward the fund and the members. Any interference with that is tantamount to a breach to the Pension Funds Act, and so we remain of the view that prescribed assets is not something that we should be considering.
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