In this edition we round up FinTech-related financial services regulatory developments for the week ending 12 September 2025.
ICYMI
Are you ready for the EU's Financial Data Access Regulation?
As the basis for Open Finance in the EU moves along the legislative pathway, we assess what implementation may require. Our FiDA Checklist provides a helpful introduction to FiDA and summarises the provisions as set out in recent drafts.
High Court finds 'retrieval duty' arguable against sending bank in an APP fraud context
The decision suggests a basis for APP fraud victims to bring claims against their own banks, provided the alleged breach of duty is rooted in the sending bank's failure to take adequate steps after being alerted to fraud.
Thaler's AI patent application confirmed as deemed withdrawn in the UK
The High Court of England and Wales has dismissed Dr Thaler's appeal from the decision of the UK Intellectual Property Office that his patent application was deemed withdrawn because it failed to meet statutory requirements, specifically regarding naming a human inventor.
Global
Wolfsberg Group: Guidance on provision of banking services to stablecoin issuers
The Wolfsberg Group has published its guidance on the provision of banking services to fiat-backed stablecoin issuers. It represents the collective view of the 12 member banks on the appropriate financial crime risk framework for providing operating accounts, reserve management and client settlement to fiat-backed stablecoin issuers. The guidance includes the unique financial crime risks associated with the provision of banking services to such stablecoin issuers, and establishes a framework for financial institutions to manage these relationships appropriately. [8 Sep 2025] #Stablecoin #DigitalAsset
BIS launches Project Danu – monitoring emerging risks by leveraging digital twin technology
The Bank for International Settlements (BIS) has announced the launch of Project Danu, an initiative aimed at leveraging digital twin technology to monitor emerging risks to financial stability. A major challenge in assessing emerging risks is the lack of sufficient data, methodologies and tools to quantify the financial impact. Digital twin technology addresses this by integrating real-time data and providing valuable insights into the impact of these events on financial stability. Project Danu aims to develop a digital twin framework that supports this approach, providing insights into how emerging risks may affect financial stability. [8 Sep 2025] #Data
FSI paper: Managing explanations – how regulators can address AI explainability
The Financial Stability Institute (FSI) at the BIS has published an occasional paper on how regulators can address AI explainability. The paper reviews the existing regulatory guidance on model risk management, identifies elements related to model explainability, analyses the extent to which that guidance could be met by AI models and discusses possible elements of improvement in the current policy setup. [8 Sep 2025] #AI
UK
PRA/BoE: Future Banking Data roundtable with bank and building societies representatives
The PRA and the Bank of England (BoE) have published a read out from the July 2025 roundtable meeting with representatives of non-systemic UK banks and building societies to discuss Future Banking Data (FBD). The session focused on gathering experiences of reporting and views on how the long-term reporting approach for firms can be made more cost-effective and proportionate. This is the latest in a series of meetings the regulator is holding with industry this year on FBD. [12 Sep 2025] #FutureBanking #Data
FCA: Quarterly consultation no. 49
The FCA has published its latest quarterly consultation paper ( CP25/24) on proposed miscellaneous amendments to its Handbook. The proposed changes include removing regulatory contactless limits and instead allowing banks and other payment service providers to deliver contactless payments whenever they identify that a transaction poses a low level of risk.
Feedback on the proposals is requested by 15 October 2025. [10 Sep 2025] #Payments
FCA: Feedback statement on AI Live Testing
The FCA has published Feedback Statement 25/5 – Summary of Feedback Received on the Engagement Paper proposing AI Live Testing ( FS25/5). The April 2025 Engagement Paper sought feedback on the potential benefits, opportunities and challenges raised by the AI Live Testing proposal. FS25/5 does not set out the FCA's views or policy on the use of AI in financial markets or on the specifics of each individual response.
Applications for the first cohort of AI Live Testing will close on 15 September 2025. Applications for the second cohort will open before the end of 2025. An evaluation report on AI Live Testing is expected to be published after 12 months. [9 Sep 2025] #AI
FCA: Approach to AI
The FCA has published guidance on its regulatory approach to the adoption of AI in UK financial markets. The regulator highlights that its approach is principles-based and focused on outcomes, and that it wants to give firms flexibility to adapt to technological change and market developments, rather than detailed and prescriptive rules.
The FCA also confirmed that it has no plans to introduce extra regulations for AI. It will instead rely on existing frameworks in order to mitigate many of the risks associated with AI. [9 Sep 2025] #AI
HM Treasury consults on approach to payment systems regulation
HM Treasury has published a consultation paper which sets out details of the Government's proposed policy approach for abolishing the Payment Systems Regulator (PSR) and integrating its functions within the FCA, and the broader design of the new regulatory framework. In March 2025, the Government announced that it will consolidate the PSR primarily within the FCA, as part of the Regulatory Action Plan.
The proposals will see the FCA take on the PSR's responsibilities, including for promoting competition and innovation in payment systems and the services provided by payment systems, as well as supporting the interests of consumers and businesses.
Responses to the consultation are requested by 20 October 2025. The FCA has issued a statement welcoming the consultation. [8 Sep 2025] #Payments
Europe
ESMA report on trends, risks and vulnerabilities – No. 2, 2025
ESMA has published its second risk monitoring report of 2025, setting out the key risk drivers currently facing EU financial markets.
Geopolitical events continue to have a strong impact on the evolution of financial markets, and investor risks have also risen in cryptoasset markets. Overall, ESMA sees 'high' or 'very high' risks in the markets within its remit. ESMA advises retail and institutional investors to remain alert to potential sharp market corrections, and to the liquidity strains they could entail.
Beyond the general risk drivers, the report provides an update on structural developments and the status of key sectors of financial markets during the first half of 2025. [9 Sep 2025] #Crypto #DigitalAsset
Australia
ASIC proposes to remake non-cash payment facility relief
The Australian Securities and Investments Commission (ASIC) has proposed to remake the ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211, which is due to expire on 1 October 2025 under the Legislation Act 2003.
This instrument provides targeted relief for certain low-value non-cash payment (NCP) facilities. These include products such as gift cards, prepaid mobile accounts, loyalty schemes, and electronic toll devices. The relief exempts providers from some licensing and disclosure obligations under the Corporations Act 2001, where the risk to consumers is considered low.
ASIC is seeking feedback on whether the instrument should be remade in its current form or updated to reflect market developments. Feedback is requested by 8 October 2025. [12 Sep 2025] #Payments
Hong Kong
HKMA seeks comments on proposed new SPM module and proposed revisions to other guidance on prudential treatment of cryptoasset exposures and miscellaneous updates
The HKMA has issued letters to the Hong Kong Association of Banks and the DTC Association to seek their comments on the following drafts for the purposes of implementing Basel Committee's standard on the prudential treatment of banks' cryptoasset exposures as well as consequential and other amendments. Comments are required to be submitted by 10 October 2025:
- A new Supervisory Policy Manual (SPM) module CRP-1 'Classification of Cryptoassets', which aims to provide authorised institutions with guidance on the classification of cryptoassets for their prudential treatment;
- Proposed revisions to:
- SPM module CA-D-1 'Guideline on the Application of the Banking (Disclosure) Rules';
- SPM module CA-G-5 'Supervisory Review Process';
- SPM module CR-G-8 'Large Exposures and Risk Concentrations';
- SPM module CR-G-9 'Exposures to Connected Parties';
- SPM module CR-L-5 'Major Acquisitions and Investments: BELR Part 3';
- SPM module LM-1 'Regulatory Framework for Supervision of Liquidity Risk';
- SPM module MR-1 'Market Risk Capital Charge';
- SPM module MR-2 'CVA Risk Capital Charge'; and
- A code of practice to provide guidance on certain provisions of the Banking (Exposure Limits) Rules.
This follows the HKMA's recent consultations on draft revisions to return templates and completion instructions (see our previous update). [8 Sep 2025] #Crypto #DigitalAsset
SFST outlines four-pillar strategy for sustaining Hong Kong's green finance leadership in Asia
The Secretary for Financial Services and the Treasury (SFST), Mr Christopher Hui, gave a speech at the 2025 Hong Kong Green Finance Association Annual Forum, highlighting Hong Kong's continued role as Asia's leading green finance hub.
With respect to fostering financial innovation, Mr Hui stated that Hong Kong has pioneered the world's first Government-issued tokenised green bond and the first multi-currency digital bond. Tokenised bonds enable efficient settlement, broaden investor access, enhance interoperability, and improve transparency and efficiency.
The HKMA is preparing its third tokenised bond issuance, advancing its plans for regularised offerings. Other initiatives include an updated Hong Kong Green Fintech Map, the launch of the Green and Sustainable Fintech Proof-of-Concept Funding Support Scheme for eligible technology companies and research institutes, and exploring of tokenised deposits and central bank digital currency. [8 Sep 2025] #Tokenisation #Fintech #CBDC
US
SEC Chair delivers keynote to OECD roundtable
The SEC has published the keynote delivered by Chair Paul S. Atkins at the Inaugural Organisation for Economic Co-operation and Development (OECD) Roundtable on Global Financial Markets. Among other matters, Chair Atkins discussed:
- unleashing the potential of digital assets in the U.S. with clear, predictable rules; and
- on AI and finance, the need for sensible guardrails which do not limit innovation. [10 Sep 2025] #DigitalAsset #AI
SEC Crypto Task Force: October roundtable
The SEC's Crypto Task Force has announced that it will host a public roundtable on financial surveillance and privacy on October 17 from 1 p.m. to 4 p.m. at the agency's headquarters in Washington, D.C. More information regarding the agenda and roundtable speakers will follow in the coming weeks.
The roundtable is open to the public. Registration is required for in-person attendance only. The discussion will be streamed live on SEC website, with a recording posted at a later date.
Preceding the roundtable, Commissioner Hester Peirce will be speaking at DC Fintech Week and the DC Privacy Summit. [8 Sep 2025] #Crypto #DigitalAsset
CFTC Acting Chair Pham addresses UK parliamentarians about crypto
The Acting Chair of the CFTC, Caroline D. Pham, addressed the UK All-Party Parliamentary Group on Blockchain Technologies about U.S. progress on crypto. She provided an overview of the recommendations contained in the report, "Strengthening American Leadership in Digital Financial Technology," which was issued by the President's Working Group. Chair Pham explained that the report covers:
- positioning the U.S. as the leader in digital asset markets;
- modernizing bank regulation for digital assets;
- strengthening the role of the U.S. dollar;
- combating illicit finance in the Digital Age; and
- ensuring fairness and predictability in digital asset taxation.
She also highlighted the increased coordination between the SEC and the CFTC as they work towards regulatory harmonization.
On the cross-border framework, Acting Chair Pham said that it is was a priority for her that there be a "pragmatic cross-border framework, including substituted compliance, mutual recognition, and passporting as appropriate, in order to avoid market fragmentation." She said that the CFTC would examine whether trading platforms which have been authorized under the European Union's Markets in Crypto Assets Regulation (MiCAR) or similar non-U.S. regimes would qualify under the CFTC's current cross-border framework.
UK All-Party Parliamentary Groups are informal, unofficial cross-party groups run by and for Members of the Commons and Lords, though many choose to involve individuals and organisations from outside Parliament in their administration and activities. [8 Sep 2025] #Crypto #DigitalAsset #MiCAR
CFTC / SEC staff joint statement – Project Crypto and Crypto Sprint
The SEC's Division of Trading and Markets and the CFTC's Division of Market Oversight and Division of Clearing and Risk have announced a cross-agency initiative in furtherance of the SEC's Project Crypto and the CFTC's Crypto Sprint to coordinate efforts regarding the process for enabling the trading of certain spot crypto asset products. [2 Sep 2025] #Crypto #DigitalAsset
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