The Global Regulatory Pulse report for Q4 highlights the dynamic and evolving nature of financial regulation across major jurisdictions. From the emphasis on accountability and transparency in Singapore and Hong Kong to the strategic focus on sustainable finance and technological innovation in the European Union, regulatory bodies are actively shaping the future of financial markets. In the Middle East, initiatives like Project Aperta and the Open Finance Regulation underscore the UAE’s commitment to enhancing financial interoperability and competitiveness. Meanwhile, the United Kingdom’s FCA is fostering a more inclusive and transparent private market environment, and the United States continues to advance priorities, implement new rules, and enforce actions due to upcoming SEC changes.
APAC
Monetary Authority of Singapore (MAS)
Revisions to MAS Guidelines on Fair Dealing and the Increased Focus on Accountability Among Board and Senior Management Members
In May 2024, the MAS issued updated Guidelines on Fair Dealing, whose key change is an expanded scope of application to all financial institutions (FIs) operating in Singapore. These guidelines are aimed at board members and senior management of such FIs, emphasizing the MAS’s expectations for their FIs to achieve five fair dealing outcomes.
The MAS’s Guidelines on Individual Accountability and Conduct focuses heavily on designing and implementing robust supervisory structures with properly allocated roles and responsibilities among senior managers and material risk personnel, all overseen by the board. This is meaningfully reiterated by key MAS enforcement actions that exemplify the true weight of individual accountability when, for the worst offenders, CEOs and Directors are publicly reprimanded for the failures of their FIs
Revised Reporting Regime for Over-the-Counter Derivatives Contracts
On October 21, 2024, amendments to the MAS’s Securities and Futures (Reporting of Derivatives Contracts) Regulations 2013 (SF(RDC)R) to adopt technical revisions to the reporting requirements went into effect. From this date, reporting under the MAS’s OTCD Reporting Regime now are required to incorporate critical data elements to facilitate the international standardization of data elements reported across OTCD reporting regimes around the world.
Continued Focus by the MAS on Strengthening of AML/CFT Measures in FIs’ Compliance Frameworks
In October 2024, the MAS published its AML/CFT Supervisory Expectations from Recent Inspections, an information paper stemming from a series of recent MAS inspections on FIs. The MAS’s efforts continue a longstanding focus on the prevention and mitigation of money laundering, terrorist financing and proliferation financing risks that arise from activities conducted by FIs in Singapore. In the publication, the MAS noted five key areas of supervisory expectations: (i) Ensuring suitable assessment of customer risks is completed; (ii) Exercising vigilance in identification of material red flags; (iii) Establishing customers’ sources of wealth and/or sources of funds sufficiently, as required; (iv) Implementing appropriate risk mitigation measures; and (v) Conducting holistic monitoring of customer accounts.
Hong Kong’s Securities and Futures Commission
Regulatory Development
In a significant move to enhance the regulatory landscape, the Securities and Futures Commission (SFC) has published guidelines for market soundings, particularly relevant for block trades. These guidelines apply to confidential information about potential transactions in listed securities and those affecting their prices. Buy-side firms must safeguard the confidentiality of market-sounding information and ensure there are effective barriers to prevent inadvertent disclosure, misuse, or leakage of confidential information. Sell-side brokers must use standardized scripts, provide anonymous preliminary information, and maintain a list of individuals with nonpublic information.
Asset Management Oversight
The SFC released a circular addressing critical deficiencies and misconduct among asset managers. The SFC plans to conduct thematic on-site inspections to identify breaches. Key issues highlighted include ineffective management of conflicts of interest, insufficient risk management and investment due diligence, inadequate disclosure of material information, and inappropriate valuation methodologies. The circular serves as a reminder for asset managers to strengthen their compliance and governance practices to better protect investor interests.
Market Misconduct and Insider Trading
Over the past year, we have seen an uptick in cases of insider trading and market misconduct.
Since October 2024, the SFC has taken significant enforcement actions against various individuals and companies for insider trading and market misconduct, including ramp-and-dump schemes, conspiracy to defraud related to share options, and alleged insider dealing and delayed disclosure of inside information regarding a major acquisitions. These cases underscore the SFC's commitment to ensuring fair and transparent financial markets.
