Global Regulator & Central Bank News Roundup

The Hong Kong Monetary Authority (HKMA), the Securities and Futures Commission (SFC), the Insurance Authority (IA) and the Mandatory Provident Fund Schemes Authority (MPFA), working with Hong Kong Cyberport Management Company Limited (Cyberport), have launched the Generative Artificial Intelligence (GenAI) Sandbox++ initiative. Building on the GenAI Sandbox introduced in 2024, the expanded programme is designed to support financial institutions in developing and testing generative AI use cases with supervisory guidance and technical support, including complimentary access to graphics processing unit (GPU) computing resources at Cyberport’s AI Supercomputing Centre. GenAI Sandbox++ broadens coverage across banking, securities and capital markets, asset and wealth management, insurance, mandatory provident fund (MPF), and stored value facilities. It retains a focus on risk management, anti-fraud and customer experience, and continues to promote “AI vs AI” approaches that use AI to manage AI-related risks; illustrative use cases include AI-enabled insurance underwriting and claims processing, automated assessments of suitability requirements in investment product distribution, AI-powered tools for handling MPF, and cross-sector applications such as customer chatbots and advanced fraud detection systems.

On March 4 Fitch Ratings affirmed Indonesia’s sovereign rating at BBB but revised the outlook to negative from stable, citing rising policy uncertainty, risks to the consistency and credibility of the policy mix, pressure on the medium-term fiscal outlook, weak revenue mobilisation and the potential impact on investor sentiment and external buffers. In response, Indonesia's OJK issued a statement, reiterating that the financial system remains resilient, supported by a strong supervisory framework and ongoing policy coordination with the government and other relevant authorities. Notably, it stated that Fitch’s outlook change was characterised as reflecting evolving external and policy risks rather than a direct reassessment of Indonesia’s credit fundamentals or the resilience of the national financial system, while the rating affirmation was linked to macroeconomic stability, resilient growth prospects, moderate government debt and generally strong fundamentals. It also pointed to financial sector indicators it described as strong, including capital levels well above minimum requirements, adequate liquidity, prudent risk management and continued growth in intermediation and highlighted the ongoing Capital Market Roadmap 2023–2027 reforms, including enhanced ownership transparency, stronger free float provisions, improved investor data classification and firm law enforcement to strengthen market governance and integrity. The statement comes after several weeks of market and regulatory pressure. In late January, MSCI warned that weaknesses in ownership transparency and free-float management could put Indonesia at risk of a frontier-market reclassification, prompting a sharp market sell-off and a fast-tracked reform response from OJK, IDX and KSEI. Since then, OJK has moved into implementation with IDX and KSEI, proposing to MSCI 28 new investor subcategories, issuer-level disclosure of shareholdings above 1% and a phased increase in minimum free float from 7.5% to 15%, while advancing related exchange rule changes, investor-ID reclassification and enforcement action.

The Monetary Authority of Singapore has issued three Guidelines on Environmental Risk Management – Transition Planning for banks, insurers and asset managers, adding to its 2020 environmental risk management framework. The guidelines set supervisory expectations for financial institutions to establish risk-proportionate transition planning processes to manage both transition and physical climate risks through forward-looking changes to business models, governance and risk management. The guidance expects institutions to assess climate-related risks across their own activities and portfolios, engage customers and investee companies to understand those risks and their mitigation measures, and avoid indiscriminate withdrawal of credit, insurance coverage or investment from higher-risk exposures. It also stresses that firms should build capabilities as data and methodologies improve. The guidelines reflect differences in the business models of banks, insurers and asset managers. For banks specifically, the detailed guidance covers governance and strategy, structured customer engagement, differentiated sector and portfolio approaches, use of scenario analysis and stress testing, climate risk metrics and targets, and stronger data, systems and staff capabilities.

The Japan Financial Services Agency has published Version 1.1 of its AI Discussion Paper on the sound use of artificial intelligence in the financial sector, revising the March 2025 version to incorporate findings from its June to December 2025 public-private forum. The central change is that the paper now reflects a materially more advanced market position than Version 1.0. In particular, the FSA says customer-facing use of generative AI, which was still very limited at the time of the 2024 survey, has moved to the stage of narrowly scoped live services or active consideration, and that practical approaches to AI risk management and governance are beginning to take shape across the industry. The revised paper also updates the FSA’s account of AI use cases and implementation practice. Drawing on a 2024 survey of 130 firms and subsequent forum discussions, it says more than 90 percent of respondents were already using either traditional AI or generative AI in some form. Traditional AI use remains concentrated in document digitisation, information retrieval, customer service, marketing, anti-money laundering and countering the financing of terrorism, credit assessment, fraud and compliance monitoring, and market analysis. Generative AI use is still centred on internal productivity tasks such as summarising, translation, drafting, editing, internal search and coding support, but Version 1.1 adds evidence of broader experimentation with indirect and direct customer-service applications, emerging use of AI agents. It also points to more developed practice on data management, governance, internal rules, skills, model risk, third-party risk, cybersecurity, hallucinations, privacy and regulatory compliance. The paper continues to present these issues as an initial basis for dialogue rather than supervisory requirements. It says existing laws, supervisory frameworks and guidelines apply regardless of whether AI is used, while indicating that the FSA will keep updating the paper, continue dialogue with firms, clarify regulatory application where needed and consider revisions to principles or guidelines before legislation if material gaps are identified.

The Council of Financial Regulators has published terms of reference for a six-month cross-agency review of residential house and contents insurance affordability. The work, involving The Treasury, the Ministry of Business, Innovation, and Employment, the Commerce Commission, the Reserve Bank of New Zealand and the Financial Markets Authority, is intended to close data gaps, examine the drivers of pricing and affordability, and identify whether policy action may be warranted. It will run in two phases, with the second phase on policy recommendations dependent on what the initial fact-finding work uncovers. Phase one will assess trends in affordability, availability, uptake and underinsurance across regions and demographics, alongside the main drivers of change including Natural Hazards Commission and Fire Service levies, reinsurance markets, insurer risk assessments, construction costs, competition dynamics and regulation. The programme also covers international comparisons, consumer experience, and an initial competition assessment led by the Commerce Commission on market share, barriers to entry and switching, and insurer financial performance. It will also test whether affordability pressures could be addressed through policy changes, whether any critical data gaps require ministerial decisions or legislative change, and what a potential second phase should cover. Phase one is due to conclude with a joint report to the Minister of Finance and the Minister of Commerce and Consumer Affairs in mid-2026 setting out key findings and recommending whether further policy development should proceed.

The Thailand Securities and Exchange Commission has revised the criteria for identifying major shareholders of securities and digital asset business operators that require approval, expanding the scope to better reflect ultimate controlling persons. The amended rules require affected business operators to reassess their major shareholder status and seek approval for individuals who now fall within scope. Key changes include an updated definition of “major shareholders” to include controlling persons, an additional pro rata method for assessing indirect shareholdings, and specified indicators of controlling power that capture holdings and influence via a spouse (including a cohabiting couple), minor children, and persons acting in concert or otherwise coordinating voting rights as prescribed by the SEC. The SEC issued the related regulations and published them in the Royal Gazette, following a public hearing conducted in January 2026. Transitional provisions require business operators to submit approval requests within 180 days from the 4 March 2026 effective date for any individuals who meet the revised criteria and were not previously approved under the former framework.

South Korea Financial Services Commission launched a private-public joint consultative body on security tokens and held a kick-off meeting, tasking it with developing the detailed rules and market infrastructure needed for the amended security token legal framework due to take effect on February 4, 2027. Its work will be guided by three policy directions set out by the FSC chairman: building a scalable digital finance ecosystem by setting rules for the issuance, circulation and disclosure of security tokens, including non-traditional tokenised exposures; reassessing and, if necessary, upgrading investor protection mechanisms under the Financial Investment Services and Capital Markets Act to ensure they function appropriately in a security token environment; and preparing for future payment and settlement arrangements such as on-chain payments, reflecting overseas experiments with 24-hour and T+0 securities settlement using stablecoins. The consultative body will operate on an ongoing basis through four subdivisions covering technology and infrastructure, issuance, circulation, and payment and settlement, supported by an open pool of private-sector experts and advisors. Intensive discussions are slated for the first half of 2026, with frequent meetings planned ahead of the February 2027 effective date as subordinate regulations are updated and related infrastructure is established.

Sweden's Riksbank has published a consultation on new regulations and general guidelines for firms considered of particular importance to the execution of payments in peacetime crises and under heightened alert. The proposal would expand the perimeter beyond the firms already covered, including certain firms providing merchant acquiring services, and would make preparedness requirements more specific so that the public can continue making payments in crisis and war. The draft rules require covered firms to maintain a wartime organisation for payment operations that is staffed, trained and exercised, with annual documented planning and review. For peacetime crises and heightened alert, firms would need plans covering personnel, premises, information and information technology, critical external dependencies and how payment operations would be maintained if those dependencies fail. For heightened alert, the plans would also need to address organisation and command, protection and surveillance, evacuation measures, alternative routines for payment services and systems, and the ability to sustain payment operations for at least two weeks under very strained conditions primarily with their own resources, within planning assumptions tied to at least three months of war in Europe with serious consequences for society. The proposal also clarifies firms' participation in the Riksbank's coordination and information function during disruptions and adds a duty to provide information needed for application of the general service obligation provisions

The European Central Bank has published a working paper, examining how stablecoin adoption could affect euro area banks and monetary policy transmission. Using evidence from stablecoin market growth together with confidential granular data on euro area banks and borrowers, the paper finds that wider stablecoin use can shift funds out of retail bank deposits into digital assets, increase banks’ reliance on wholesale funding and reduce credit supply to firms. It also finds that stablecoin adoption can alter the pass-through of policy rates to bank funding costs and lending conditions, making policy effects less predictable. The paper says these effects are nonlinear and depend on the scale of stablecoin adoption, design features and regulatory treatment. At low adoption levels, aggregate effects are limited, but they rise as deposit substitution becomes more pronounced. The analysis also highlights larger risks from foreign-currency-denominated stablecoins, particularly US dollar-pegged instruments, because they could increase euro area banks’ reliance on foreign-currency wholesale funding, weaken the response of loan supply to domestic monetary policy and import foreign monetary conditions into the euro area, with potential implications for monetary sovereignty. The authors say measures such as stronger reserve transparency, redemption safeguards, capital buffers, effective oversight and the possible introduction of central bank digital currencies could help mitigate these risks.

The European Banking Authority has published its final draft Implementing Technical Standards on supervisory reporting for third-country branches under Capital Requirements Directive VI, establishing uniform templates, definitions and reporting frequencies across the European Union. The framework requires reporting on both branch-level financial and regulatory information and head-undertaking data, using a proportionate core-plus-supplement approach under which all branches submit a core dataset and larger or more complex Class 1 branches provide additional detail. Branch reporting covers assets and liabilities, off-balance-sheet items, concentration exposures, internal transactions, capital endowment, liquidity and, where applicable, deposit protection arrangements, while head-undertaking reporting covers group assets and liabilities in the Union, prudential metrics, supervisory reviews, recovery plans, business strategy and reverse-solicitation services. The package incorporates consultation feedback through targeted simplifications, including a later first reporting reference date of 31 March 2027, longer remittance deadlines for certain head-undertaking templates, and streamlined templates and instructions. Following submission to the European Commission, the EBA will develop the data point model, XBRL taxonomy and validation rules, with the technical package planned for publication in Q2 2026.

The European Commission has launched a targeted consultation on obstacles to private equity exits in the European Union and possible measures to improve them, as part of its savings and investments union work to expand access to finance for startups and scaleups. The central issue is that investors in private companies often struggle to realise returns because initial public offerings may not be viable or timely and private assets can be difficult to value and sell, which in turn can reduce the supply of growth capital. The consultation seeks views on barriers to exiting private equity investments, the case for an intermittent multilateral secondary trading platform for private company shares, and whether such a platform could also be used to raise new equity capital. The paper explores design choices including who could participate, which companies and shares could be eligible, how trading windows and transparency should operate, what disclosure and market abuse safeguards would be needed, and whether the regime should take the form of a temporary sandbox, a permanent sandbox, or a bespoke EU framework.

Argentina's National Securities Commission has repealed the rules establishing its Innovation and Financial Inclusion Hub, concluding that the structure had become an additional bureaucratic layer and that its functions are now covered more effectively through existing regulatory frameworks and permanent institutional channels. The measure removes Chapter II of Title XIV of the CNV rules as part of the authority's broader deregulation and regulatory simplification agenda. The Hub had been created in 2022 under General Resolution No. 926 to support public-private dialogue and innovation in the capital market. The CNV said subsequent technological, regulatory and market developments had overtaken that framework, while the current review of existing rules under Decree No. 90/2025 also supported removing provisions considered obsolete, overlapping or unnecessary. As a related change, Title XIV is renamed to cover the crowdfunding platform and the register of virtual asset service providers.

As the war across the Middle East continues, several authorities have continued to relay messages to the market to reiterate that the financial services sector remains operational and resilient. In the United Arab Emirates, this has combined market-reopening measures with broader reassurances on financial system continuity. Trading resumed on the Abu Dhabi Securities Exchange, Dubai Financial Market and Nasdaq Dubai on 4 March 2026 following temporary suspensions, while the Central Bank of the United Arab Emirates said banks, financial institutions, insurers, payment systems and national financial infrastructure are operating normally without disruption. It cited a capital adequacy ratio of 17%, a Liquidity Coverage Ratio above 146.6% and banking sector assets of more than AED 5.42 trillion, and said it continues to monitor conditions through supervision, stress testing and coordination with relevant authorities. The Dubai Financial Services Authority also reminded investors that heightened tensions can increase short-term volatility, fake news and phishing attempts. In Kuwait, the Central Bank of Kuwait stressed that the banking sector remains operationally ready and that payment systems, including Kuwait's automated settlement system, electronic cheque clearing and the WAMD instant payments system, continue to function around the clock, with cash services available through branches and ATMs and liquidity and capital adequacy remaining above regulatory requirements. In Iraq, the Central Bank of Iraq held an extraordinary board meeting to assess liquidity, money supply, foreign currency needs, trade and payment flows and potential regional risk scenarios, and noted reserves cover about 12 months of imports, supporting its readiness to supply bank liquidity, maintain external transfers for imports and other international payments, and secure salaries and essential spending in the coming months.

The Rwanda Capital Markets Authority announced the appointment of Romeo Ngarambe as Chief Executive Officer. Ngarambe brings more than 13 years of international experience in strategic finance and investment leadership, including capital markets operations and corporate advisory, with a focus on governance frameworks, performance measures and regulatory compliance. He previously held senior finance leadership roles at Corning Inc. and worked at Deloitte & Touche LLP as a Senior Business Risk Consultant on capital markets and advisory assignments, including due diligence, structured finance reviews and investor protection engagements.

South Africa's National Treasury announced that the Minister of Finance, Enoch Godongwana, has reappointed Unathi Kamlana as Commissioner of the Financial Sector Conduct Authority (FSCA) for a further five-year term under the Financial Sector Regulation Act, 2017, alongside renewed terms for Deputy Commissioners Katherine Gibson and Farzana Badat. Kamlana’s reappointment runs from 1 June 2026 to 31 May 2031. Gibson was reappointed for 27 September 2026 to 26 September 2031 and continues to oversee Regulatory Policy and Enforcement, while Badat’s new term runs from 1 December 2026 to 30 November 2031 and covers Conduct of Business Supervision and the Licensing and Business Centre. Deputy Commissioner Astrid Ludin will step down at the end of her term on 31 May 2026, and the Minister will shortly initiate the process to appoint her replacement as well as the appointment of a fourth Deputy Commissioner.

The Central Bank of Seychelles has launched a public consultation on proposed Regulatory Sandbox Regulations that would allow eligible firms to test innovative financial products and services on a limited scale under its supervision, aimed at areas such as financial technology and digital payments. The proposals include amendments to the CBS Act to allow the Governor or Board of Directors to exempt certain activities from licensing or authorisation requirements and to create a general statutory power to impose fees, while sandbox participants would also be brought within Seychelles’ statutory AML/CFT and financial consumer protection regimes. Entry would be open to licensed firms and new Seychelles-incorporated entities that meet fit-and-proper and readiness criteria, with potential relief from requirements such as licensing, minimum capital, board composition, cash balances, fund solvency, management experience, and minimum liquid assets, but not from fit-and-proper standards, consumer deposit and asset handling rules, data protection, consumer protection, or AML/CFT obligations.

Saudi Arabia's Capital Market Authority (CMA) Board has approved amendments to the Capital Market Institutions Regulations to regulate robo-advisory services, defined as the use of algorithms and modern technological tools to manage clients’ investments according to predetermined investment strategies. The framework allows robo-advisory to be provided by Capital Market Institutions licensed to conduct Managing Investments activities, or Managing Investments and Operating Funds activities, following pilot implementation by authorized fintech companies in the FinTech Lab. The amendments impose controls on strategy governance and technology oversight, including an obligation to notify the CMA in advance of portfolio construction and management strategies and any material updates before making them available to clients. Firms must establish supervisory systems and procedures to ensure the integrity and efficiency of the algorithms and technologies used, and conduct periodic testing to verify reliability and effectiveness at least ten days before offering the service on the platform. Provision is permitted only where portfolios are not concentrated in a single asset or in securities issued by a single issuer, and where any securities issued or listed outside the Kingdom are subject to supervision by a regulator with standards and requirements at least equivalent to those applied by the CMA. Disclosure requirements cover the service’s operational mechanism, including strategies, asset selection criteria, allocation rules and rebalancing, as well as clear and non-misleading disclosure of the role of algorithms and associated risks tailored to the targeted client segments; firms must also disclose and publish on their websites performance track records since inception, including measurement bases and total returns after deducting actual expenses, and register the Information Technology Officer responsible for overseeing the technological systems supporting the service.

The Egypt Financial Regulatory Authority issued a new framework governing the registration, relocation, amendment and closure of branches for companies licensed to conduct non-banking financial activities. The rules prohibit operating from any location other than the head office without the Authority’s prior approval and the branch being recorded in the designated register. The decision distinguishes between full-service financing branches, marketing branches limited to promotion and document collection without granting finance or collecting payments, and two additional formats aimed at operational flexibility: mobile branches (movable units) and seasonal branches linked to specific events or seasons. Firms must establish an organisational structure for their branch networks aligned to approved geographic distribution and set clear credit decision-making and risk governance arrangements, including committee structures and delegated authorities by financing tier, product and acceptable risk levels. Registration requires specified documentation including board approval, branch location and classification, manager appointment and CV, recent commercial register extract, proof of premises possession and payment of the examination fee, and the Authority may conduct on-site inspections before issuing a registration certificate. Prior approval is also required to move, amend or close a branch, with obligations to protect customer rights and organise employee arrangements, and the Authority may take administrative measures for non-compliance; additional operational, document-handling, vehicle licensing and insurance and tracking requirements apply to mobile and seasonal branches.

The Bank of Canada, Export Development Canada, RBC Capital Markets, RBC Investor Services and TD Bank Group completed Project Samara, a real-world test of distributed ledger technology for bond issuance and settlement. As the central milestone, Export Development Canada issued Canada’s first tokenized bond, a CAD 100 million bond with a maturity of less than three months sold to a closed investor group and settled in wholesale central bank deposits. The Samara platform, built on Hyperledger Fabric, supported issuance, bidding, coupon payments, redemption, secondary trading and settlement by integrating bond and cash ledgers and enabling instant on-chain settlement. The experiment found gains in operational efficiency, data integrity and workflow streamlining, alongside lower counterparty and settlement risk. Those benefits were partly offset by system and governance complexity, liquidity costs, technology, auditability and fallback risks, gaps between current regulatory frameworks and distributed ledger market structures, and adoption barriers linked to integration challenges and limited appetite for changes to core infrastructure. The project proceeded under approvals from the Ontario Securities Commission, the Autorité des marchés financiers and the Canadian Investment Regulatory Organization through their regulatory testing environments. Separately, the Canadian Securities Administrators have launched Project Tokenization within the CSA Collaboratory to examine issues arising from tokenized products under Canadian securities laws.

At a Washington roundtable on bank liquidity and the lender of last resort, the US Department of the Treasury argued that post-crisis liquidity regulation now excessively constrains bank lending and should be revisited, while Federal Reserve Vice Chair for Supervision Michelle Bowman said the framework needs to be reassessed against actual stress performance rather than formal compliance alone. Taken together, the remarks signaled support for a liquidity framework that gives the Federal Reserve’s discount window a more central role in banks’ liquidity management. Treasury’s main near-term reform idea was to give the liquidity coverage ratio and other liquidity rules capped recognition for borrowing capacity backed by collateral already prepositioned at the discount window, on the basis that this is real monetizable liquidity. It said the cap could be linked to demonstrated discount window usage and potentially adjusted during severe stress, while preserving self-insurance, collateralization, haircuts, solvency limits and supervisory discretion. Bowman similarly argued that the current framework encourages banks to hoard high-quality liquid assets, discourages use of the discount window because of stigma and disclosure concerns, and can make buffers unusable in stress. She also said the discount window requires fundamental reform to operate as a reliable backstop, including more consistent rules and processes across the 12 Reserve Banks.

The Federal Reserve Bank of Kansas City has approved a limited purpose account for Wyoming-based Payward Financial, doing business as Kraken Financial, under the Federal Reserve Board of Governors’ Account Access Guidelines. Kraken Financial is chartered as a State of Wyoming Special Purpose Depository Institution and was assessed as a Tier 3 entity, with the account approved for an initial term of one year. The account includes restrictions and limitations tailored to Kraken Financial’s business model and risk profile to mitigate risks identified in the guidelines. The Kansas City Fed said account decisions are made by each Reserve Bank based on the specific facts and circumstances of the requester, including a risk-based assessment of its business model, and that all requests are subject to the same standards for access to Federal Reserve services, including legal eligibility. The announcement comes after the Federal Reserve Board, on December 19, separately requested public input on the potential creation of a payment account for legally eligible institutions that would be limited to clearing and settling payments. The Board said such an account would be distinct from a master account, would not pay interest or provide access to Federal Reserve credit, would be subject to balance caps, and would not expand or otherwise change legal eligibility for access to Federal Reserve payments services.