US Reg Round Up: 27/05/2024
Federal Reserve
Agencies announce inflation-adjusted dollar thresholds for Regulation CC - 13 May 2024
The Fed and the Consumer Financial Protection Bureau have both updated the inflation dollar amounts relating to the availability of customer funds. These changes affect Regulation CC, including minimum amounts of deposited funds that banks must make available for withdrawal and the funds deposited by certain checks in a new account subject to next-day availability. The adjustments, required by law every five years, are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers.
The FED release summary of the exploratory pilot Climate Scenario Analysis (CSA) - 09 May 2024
The FED conducted this exercise with 6 of the largest banks in the US, the purpose of this pilot was to test how these banks are using climate scenario analysis to explore the resilience of their business models to climate-related financial risks. The participating banks used a wide range of approaches to consider the possible implications of different physical and transition risk scenario. The summary published showed that there are data gaps and modelling challenges that arise when estimating the financial impacts of highly complex and uncertain risks over different time horizons.
The FED requested a comment on a proposal to expand the operating days of their two large-value payments services, Fedwire Funds Services, and the National Settlement Service, to include weekends and holidays so that they could operate throughout the year. The operating hours would remain the same, with the Fedwire Funds Service open 22 hours per day and the NSS open 21.5 hours per day. Providing large-value payment services every day would support the safety and efficiency of the US payment system and help position the infrastructure for the future.
Agencies issue guide to assist community banks to develop third-party risk management practices - 03 May 2024
Federal bank regulatory agencies have issued a guide to aid community banks in navigating risks associated with third-party relationships. Community banks often collaborate with third parties to adapt to the changing financial services landscape. However, such relationships have various risks associated with them and banks must effectively identify, assess, monitor, and control to ensure compliance with laws and regulations, particularly those safeguarding consumers and combating financial crimes.
Securities and Exchange Commission
SEC proposes customer identification program requirements for RIAs - 13 May 2024
The Securities and Exchange Commission (SEC) and the Financial Crimes Enforcement Network (FinCEN) have jointly proposed a new rule requiring SEC-registered investment advisers (RIAs) and exempt reporting advisers (ERAs) to establish, document, and maintain written customer identification programs (CIPs). This initiative aims to enhance the anti-money laundering and countering the financing of terrorism (AML/CFT) framework within the investment adviser sector, aiming to prevent illicit financial activities involving customers of investment advisers.
SEC charges audit firm BF Borgers and its owners with massive fraud - 03 May 2024
The Securities and Exchange Commission have charged audit firm BF Borgers CPA PC and its owner, Benjamin F. Borgers, for deliberate and systematic failures to adhere to Public Company Accounting Oversight Board (PCAOB) standards in its audits and reviews which incorporated more than 1,500 SEC filings from January 2021 to June 2023. The SEC also accused the Respondents of falsely representing to clients that their work complied with PCAOB standards, fabricating audit documentation to create an appearance of compliance, and falsely stating in audit reports included in over 500 public company SEC filings that their audits met PCAOB standards. In a settlement, BF Borgers agreed to pay a $12 million civil penalty, while Benjamin Borgers agreed to pay a $2 million civil penalty.