Banking and capital markets regulatory trends

October 2024

Shifting tides: The future of bank liquidity regulation
Banks are bracing for a series of anticipated changes aimed at enhancing liquidity management and ensuring greater financial stability. These changes, catalyzed by banking failures in spring 2023, underscore the importance of employing appropriate liquidity frameworks to withstand financial stresses.

Regulation W: The wall remains
Regulation W compliance is more than just a regulatory requirement—it’s a cornerstone of sound banking practices. Understand its nuances to help improve your risk management strategies and navigate the intricate regulatory landscape with ease and confidence.

September 2024

Banking agencies and Department of Justice update their approaches to bank mergers
On September 17, 2024, the FDIC, OCC and DOJ took steps to strengthen oversight of bank mergers, finishing a process that has been in the works for several years. The updates refresh an approach that has been in place since the 1990s, and the changes reflect a modernized banking market (banking consolidation, interstate banking, online banking, among others).

FDIC proposes recordkeeping requirements for custodial deposit accounts
On September 17, 2024, the Federal Deposit Insurance Corporation (FDIC) Board of Directors unanimously approved a notice of proposed rulemaking (NPR) that would require additional recordkeeping for bank deposits received from third-party, nonbank companies that accept those deposits on behalf of consumers and businesses.

So, do you still want to be a bank in 2024?
As the banking industry continues to consolidate, the distinct advantages of banks (e.g., access to payments systems, insured deposits, ability to issue credit and debit cards, and interstate lending) make bank charters an invaluable asset.

August 2024

BCBS issues principles for the sound management of third-party risk 
As the banking sector undergoes rapid digitalization, BCBS issued “Principles for the sound management of third-party risk” on July 9, 2024, with a comment period through October 9, 2024.

FDIC proposes rules limiting integrated business models of IBs and their parent companies
On July 30, 2024, the FDIC approved a notice of proposed rulemaking to amend Part 354 of the FDIC Rules and Regulations governing parent companies of IBs, which revises part 354 to clarify and enhance the agency’s framework to supervise industrial banks, mitigate risks to the Deposit Insurance Fund, and provide necessary transparency for market participants.

FDIC issues proposal on brokered deposit restrictions
On July 30, 2024, the FDIC Board of Directors, by a vote of 3-2, approved a notice of proposed rulemaking that would make several significant revisions to the agency’s rules on brokered deposits (12 CFR 337.6).

FDIC approves final guidance to enhance resolution planning at large banks
On July 30, 2024, the Federal Deposit Insurance Corporation (FDIC) Board of Directors unanimously approved final guidance for Title I Resolution Plan triennial full filers largely as proposed and extended the submission deadline from March 31, 2025, to October 1, 2025.

July 2024

Agencies issue final rule on quality control standards for automated valuation models
On July 17, 2024, six federal regulatory agencies—the Federal Reserve Board of Governors (FRB), Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), Consumer Financial Protection Bureau (CFPB), Federal Housing Finance Agency (FHFA), and National Credit Union Administration (NCUA) (collectively, the Agencies)—issued a final rule to implement quality control standards for AVMs used by mortgage originators and secondary market issuers in valuing those homes.

Acting Comptroller Hsu discusses banks’ role in addressing consumer fraud
On July 10, 2024, Acting Comptroller of the Currency Michael J. Hsu discussed the scale of consumer financial fraud and ways financial institutions can better protect consumers from scams, including those stemming from new technologies such as artificial intelligence (AI).

Proposed FR Y-14 changes, new data requirements and reporting guidance
The Federal Reserve Board of Governors (FRB) proposed changes to the Capital Assessment and Stress Testing Reports (FR Y-14A, FR Y-14Q, FR Y-14M) on June 21, 2024. These revisions are significant.

June 2024

Dodd-Frank Act Stress Test (DFAST) Results June 2024
The Federal Reserve Board (FRB) released the results of the latest Dodd-Frank Stress Test (DFAST) on June 26, 2024. All 31 banks subject to the stress test stayed above their minimum capital requirements in the stress scenario, even with aggregated projection of $685 billion in losses under the hypothetical severe downturn where the banks had more than twice the amount of minimum capital required.

Regulatory management as strategy – July 2024
This is the second of four perspectives we are issuing in our “Regulatory management as strategy” series. While this series generally is geared toward more complex and large banking organizations (e.g., Categories I–IV1), we believe that many of these practical tips should help inform regulatory engagement by community and regional banks under $100 billion in assets as well.

'Weapon and tool' - systemic risk implications of AI in banking and finance
On June 6, 2024, Acting Comptroller of the Currency Michael J. Hsu delivered remarks at the Conference on Artificial Intelligence and Financial Stability, hosted by the Financial Stability Oversight Council (FSOC) in partnership with the Brookings Institution, wherein he discussed systemic risk implications of artificial intelligence (AI) and offered his thoughts on approaches to AI deployment to improve its safety.

Back to basics: Lessons learned from recent banking turmoil and evolution of governance practices
In response to recent market events, US banking regulators have continued to reinforce their supervisory expectation across three key areas—strong governance, risk management, and controls— through new regulations, supervisory guidance, and targeted inspections and examinations.

May 2024

Federal Reserve proposes expanding operations of large-value payment services
On May 3, 2024, the Federal Reserve Board of Governors (FRB) proposed to expand the operating days of the Fedwire Funds Service (Fedwire) and National Settlement Service (NSS) to include weekends and holidays, so that they would operate every day of the year.

March 2024

FDIC proposes agency guidance requiring more scrutiny on bank mergers
On March 21, 2024, the Federal Deposit Insurance Corporation (FDIC) approved a Proposed Statement of Policy on Bank Merger Transactions (SOP), which would significantly increase the scrutiny applied to bank mergers and potentially raise the standard for approving such transactions.

Regulatory management as strategy
Gone are the days when the board and a banking organization's senior management could leave "regulatory matters" to compliance, legal, regulatory affairs, or some other control or support function.

February 2024

Acting Comptroller Hsu recommends new metrics to trigger FSOC review
On February 21, 2024, the Acting Comptroller of the Currency, Michael J. Hsu, delivered a speech at Vanderbilt University where he outlined his perspective on the financial stability implications associated with the blurring of banking and commerce, in particular payments and private equity/credit.

BCBS 239 Progress Report: Significant work still needs to be done for full compliance
In November 2023, the Bank for International Settlements (BIS) published the Progress in adopting the Principles for effective risk data aggregation and risk reporting (BCBS 239) report.

US Basel III Endgame: Understanding the report level changes
Changes to the FR Y-14 reports and FFIEC 031/041 reports were issued with the Basel III Endgame proposal

January 2024

OCC proposes changes to bank merger approval process
On January 29, 2024, the Office of the Comptroller of the Currency (OCC) released a notice of proposed rulemaking (NPR) that would (i) amend the OCC’s bank merger review procedures and (ii) add a policy statement summarizing the principles the agency uses when it reviews proposed bank merger transactions under the Bank Merger Act.

Acting Comptroller Hsu recommends new liquidity requirements for large and midsize banks
On January 18, 2024, the Acting Comptroller of the Currency, Michael J. Hsu, delivered a speech at Columbia Law School where he outlined his perspective on how to enhance liquidity risk management for large and midsize banks.

OCC issues guidance on managing risks associated with BNPL lending
On December 6, 2023, the Office of the Comptroller of the Currency (OCC) released Bulletin 2023-37 highlighting their guidance to organizations engaging in buy now, pay later (BNPL) lending.

2024 Banking Regulatory Outlook
In our 2024 banking regulatory outlook, we provide our assessment of the regulatory and supervisory changes—and pressures—that banks may face in the coming year, the importance of each area to the organization, and practical considerations to address vulnerabilities to better position banks for challenges ahead.

October 2023

FDIC focuses on bank boards for governance and risk enhancements
With a new proposal, the Federal Deposit Insurance Corporation (FDIC) would require boards of directors of its supervised banks with at least $10 billion in consolidated assets to comply with corporate governance requirements. The Proposed Rule is part of actions the FDIC has taken after a string of large bank failures earlier this spring.

September 2023

Proposed changes to bank capital and the impact on regulatory reports
The federal banking agencies issued a Notice of Proposed Rulemaking (NPR) to substantively revise the regulatory capital framework for banking organizations of $100 billion or more and for banking organizations with significant trading activity.

Federal banking agencies propose new resolution planning requirements
On August 29, 2023, US federal banking regulators issued three proposals regarding minimum long-term debt (LTD) for large banking organizations and resolution planning. This paper details the applicability, requirements, and key considerations of the two proposals concerning resolution planning.

Federal banking agencies propose new long-term debt requirement
On August 29, 2023, US federal banking regulators issued three proposals regarding minimum long-term debt (LTD) for large banking organizations and resolution planning. This paper details the applicability, requirements, and key considerations of the proposed LTD Requirements Rule (LTD Rule).

August 2023

US Basel III Endgame: Key changes, impacts and where to begin
On July 27, 2023, the federal banking regulators—i.e., the FRB, the OCC, and the FDIC—released the long-awaited US Basel III Final Reforms. The release includes two separate NPRs: (i) the Basel III proposal and (ii) G-SIB surcharge proposal.

July 2023

Holistic' review yields potential significant changes to bank capital
On July 10, 2023, the Federal Reserve Board of Governors’ (FRB) Vice Chair for Supervision Michael Barr (Vice Chair Barr) previewed upcoming changes to the existing capital framework that are expected to be part of the long-awaited Basel III Endgame rules.

June 2023

Keeping banks ‘on the balls of their feet’
With the focus of recent economic and banking sector impacts, the Office of the Comptroller of the Currency (OCC) has taken the opportunity to revise its guidance to institutions for liquidity risk management.

Dodd-Frank Act Stress Test (DFAST) Results June 2023
The Federal Reserve Board (FRB) released the results of the latest Dodd-Frank Stress Test (DFAST) on June 28, 2023.

May 2023

Prepare for more stringent regulation and agile supervision after bank failures
On April 28, the Board of Governors of the Federal Reserve System (FRB) and the Federal Deposit Insurance Corporation (FDIC) published reports on the specific risk and supervisory issues that led to two significant bank failures in March of this year.

April 2023

Mid-to large-size banks expect greater scrutiny on their upcoming resolution plans
Banks are likely to face heightened challenges in their next resolution plan submission cycles due to recent market events, return to full plan scope in this cycle, and upcoming guidance on the horizon.

Legal entity and booking model optimization
Why global banks and capital markets organizations are re-assessing strategies.

February 2023

Enhanced data collection for repurchase transactions
On January 5, 2023, the US Department of the Treasury’s Office of Financial Research (OFR) proposed a rule that would require certain financial companies to submit transaction-level data for non-centrally cleared bilateral repurchase agreements (repos).

Pushing the boundaries of the banking regulatory perimeter
What nonbanks should know in advance when engaging with financial services products, and what banks should be prepared for when offering these services

January 2023

2023 Banking Regulatory Outlook
The disruptive factors of 2022, such as high inflation, interest rate volatility, the Russia-Ukraine conflict, lingering effects of the pandemic, stock and bond market downturns, and events in the crypto asset markets, have influenced banking regulatory perspectives and will likely impact the direction banking regulations will take in 2023. Our outlook explores what you should expect and how best to prepare for anticipated regulatory change.

November 2022

Regulatory reporting changes 2022–2023 implementation plans
The federal banking agencies—Board of Governors of the Federal Reserve System (FRB), Office of the Comptroller Currency (OCC), and Federal Deposit Insurance Corporation (FDIC)—have issued proposals that significantly impact several regulatory reports. These changes were proposed at different times and were scheduled to take effect during 2022 with several as-of dates. The proposals cover regulatory reporting for regulatory capital, cross-border exposure, and legal entity organizational structure.

Reevaluating and redesigning a product governance framework
Banking organizations (organizations) are actively evaluating their governance models, processes, and technology to enhance their product governance framework. In addition, the supervisory expectations for product governance are being heightened globally.

October 2022

Navigating regulatory approval for bank mergers
The US banking regulators are evaluating the implications of large bank mergers on financial stability. In this report, we explore how banks seeking regulatory approval for mergers and acquisitions (M&A) activities can leverage their second line of defense, led by the chief risk officer and chief compliance officer to enable and support the approval process.

September 2022

Federal Reserve Vice Chair's priorities for the regulatory and supervisory agenda
In his first speech as Federal Reserve Vice Chair for Supervision, Michael Barr laid out his priorities for the regulatory and supervisory agenda.

July 2022

Tiering Introduced for US Payments System Access-Vol.2
Direct access to Federal Reserve’s payment systems, through a master account established with one of the 12 Federal Reserve Banks, is a valuable thing. So, who gets a master account?

June 2022

Key highlights from the June 2022 Stress Tests
The Board of Governors of the Federal Reserve System (FRB) released the results of the latest DoddFrank Stress Test (DFAST) on June 23, 2022

April 2022

Playing catch-up: The FDIC takes first steps to modernize the Bank Merger Act
What is happening, what we have seen, and what you need to know for future deals

March 2022

Tiering Introduced for US Payments System Access-Vol.1
Tiering Introduced for US Payments System Access-Vol.1

February 2022

OCC releases principles for climate-related financial risk management for large banks
Although formalized policies on climate risk have been limited in the US to date, regulatory focus has been accelerating, and additional guidelines and policies are expected to emerge.

January 2022

FR 2052A Final Updated Reporting Requirements
The recently finalized FR 2052a reporting rule is the next evolution of liquidity data reporting requirements, increasing the level of detail of on an institution’s liquidity profile, including additional information on securities financing transactions, wholesale unsecured funding, deposits, loans, unfunded commitments, collateral, derivatives, and foreign exchange

October 2024

SEC approves changes to Reg NMS to reduce transaction costs and improve market transparency
On September 18, 2024, the Securities and Exchange Commission (SEC) voted to approve several updates to Regulation National Market Securities (Reg NMS) including the minimum pricing increments (i.e., tick size) across all venues, reducing the access fee caps, requiring all fees be known prior to the trade, enhancing the transparency of better priced orders by standardizing round lot and odd lot definitions and providing odd lot pricing in market data.

July 2024

SEC finalizes amendments to Regulation S-P
On May 15, 2024, the Securities and Exchange Commission (SEC) finalized amendments to Reg S-P that modernize the agency’s customer information protection rule, which was initially adopted in 2000.

May 2024

New repo data collection introduced by the Office of Financial Research (OFR)
On May 6, 2024, the Office of Financial Research (OFR) finalized a new data collection for non-centrally cleared bi-lateral transaction in the US repurchase agreement market (NCCBR).

Federal banking agencies release community bank guide on third-party risk management
On May 3, 2024, the federal banking agencies released a guide to support community banks in managing risks presented by third-party relationships (Guide). The Guide is intended to be a resource for community banks in providing considerations, resources, and examples through each stage of the third-party relationship.

Final Rule on US Treasury clearing
On December 13, 2023, the Securities and Exchange Commission (SEC) adopted final amendments requiring firms to clear eligible Treasury securities transactions to a central clearing counterparty, such as the Fixed Income Clearing Corporation (FICC).

April 2024

Swap Dealer Enforcement Actions
Analysis of Commodities Future Trading Commission enforcement actions data since the Swap Dealer regime began highlights a significant trend towards greater regulatory scrutiny in recent years.

March 2024

FICC submits modifications for its GSD Rulebook
On March 11 & 14, 2024, the Fixed Income Clearing Corporation (FICC) submitted modifications to the Securities and Exchange Commission (SEC) related to the FICC Government Securities Division (GSD) Rulebook (Rulebook). These modifications of the Rulebook are important for firms’ implementation of the recent SEC Rule34-99149.

SEC climate disclosure: considerations for banking institutions
On March 6, 2024, the SEC issued a final rule that requires climate-related disclosures in annual reports and registration statements. While in line with existing frameworks and guidance, it may take significant coordination to understand these connections and implications and to create a good compliance strategy.

CFTC proposes operational resilience framework
The Commodity Futures Trading Commission (CFTC) proposed a rule requiring firms to establish an Operational Resilience Framework (ORF) to manage and monitor Operational Risk amidst rising cyberattacks. It necessitates changes to certain elements of operational risk frameworks and a review or refinement of risk management practices.

FINRA ends COVID-19 relief and adopts new residential supervisory location rule on remote work
The Financial Industry Regulatory Authority (FINRA) has announced the adoption of two related rules—Rule 3110.18 and 3110.19—which marks the end to the COVID-19 temporary relief from certain regulatory obligations and ushers in a new understanding of the ever-evolving work environment.

SEC finalizes amendments to require greater execution quality disclosure
On March 6, 2024, the Securities and Exchange Commission (SEC) finalized amendments to Rule 605, which requires disclosure of order execution statistics.

Rule 192 - Prohibition Against Conflicts of Interest in Certain Securitizations
On February 5, 2024, Rule 192 became effective under the Securities Act of 1933. The rule will restrict financial institutions that are deemed to be Securitization Participants from being involved in transactions that would create a material conflict of interest in asset-backed securities ("ABS")

February 2024

SEC finalizes new rules to further define "dealer" and "government securities dealer"
On February 6, 2024, the Securities and Exchange Commission (SEC) finalized new rules 3a5-4 and 3a44-2 under the Securities Exchange Act to further define the phrase "as part of regular business" in the definition of broker-dealer.

SEC finalizes reporting of securities loans
On October 13, 2023, the Securities and Exchange Commission (SEC) adopted Rule 10c-1a, which will require certain persons to report information about securities loans to a Registered National Securities Association (RNSA) and require RNSAs to make publicly available certain information that they receive regarding those lending transactions.

2024 examination focus areas for FINRA and SEC
The Financial Industry Regulatory Authority (FINRA) and Securities Exchange Commission (SEC) have released their annual reports outlining examination focus areas for 2024.

January 2024

SEC announces US Treasury clearing Final Rule
On December 13, 2023, the Securities and Exchange Commission (SEC) approved a Final Rule which will require firms to begin centrally clearing eligible trades in Treasury securities by the end of 2025 and repurchase agreement (repo) transactions by June 2026.

2024 Capital Markets Regulatory Outlooks
For our capital markets regulatory outlook this year, we’ve identified four key themes that firms likely will need to navigate in 2024: winning the race for intelligence, (2) adapting to change, (3) navigating uncertainty and (4) investing in core competencies.

June 2023

Swap dealer enforcement actions
10 years since Swap Dealer registration began, pursuant to reforms enacted in the Dodd-Frank Act, we look back on a decade of Commodities Future Trading Commission (“CFTC”) Enforcement Actions.

May 2023

CFTC takes aim at risk management given broader financial market events
A recent speech by Rostin Behnam, chair of the commodity futures trading commission (CFTC), focused on the importance of effective risk management given recent events in the marketplace as well as the push to finalize proposed regulations.

February 2023

Accelerated Settlement final rule is announced by the Securities and Exchange Commission
On February 15th, 2023, the Securities and Exchange Commission (SEC) approved a final rule to transition the securities settlement cycle in the United States from two days to one on May 28, 2024.

January 2023

2023 Capital Markets Regulatory Outlook
Major changes are coming to the US capital markets. Organizations should prepare now for significant shifts imposed by new regulations. Explore the key capital markets regulation trends that will impact your organization in 2023.

December 2022

SEC Proposals Impacting Broker-Dealers
On December 14, 2022, the Securities and Exchange Commission (SEC) approved four proposals that make significant changes to market regulations and aim to increase transparency, competition, and investor protections. The proposals cover

• expansion of rule 605 reporting
• Reg NMS changes for variable tick size and disclosure of fees
• a new “Order Competition” rule including open auctions and
• expansion of Best Execution requirements.

October 2022

SEC proposes changes to definition of dealer and government securities dealer
On March 28, 2022, the Securities and Exchange Commission (SEC) issued a proposal to change two rules—Rules 3a5-4 and 3a44-2—to identify certain activities “as part of a regular business,” in the definition of a “dealer” or “government securities dealer,” based on certain qualitative and quantitative standards.

September 2022

The active regulatory agenda
An increasingly active federal regulatory agenda for financial services is having profound effects on every type of organization involved in the capital markets and, by extension, the customers and clients they serve.

August 2022

Deloitte's T+1 Securities Settlement Industry Implementation Playbook
New Resource Provides Guidance Around Activities, Timelines, Dependencies and Risks Associated with a Move to T+1.

July 2022

SEC Proposed Rule: The Enhancement and Standardization of Climate-Related Disclosures for Investors
The Securities and Exchange Commission (SEC) on March 21, 2022, approved (3-1, along party lines) a much-anticipated rule proposal mandating and standardizing climate-related disclosures by public companies.1The proposal reflects increasing investor demand for consistent and reliable climate disclosures.

May 2022

SEC Q1 2022 Update
In Q1 2022 four Securities and Exchange Commission (SEC) rule proposals became final and an additional 15 were proposed.

April 2022

SEC approves short interest reporting proposal
On February 25, 2022, in a closed meeting, the Securities and Exchange Commission (SEC) unanimously approved a proposal to require reporting of large short interest positions.

February 2022

SEC adopts proposal to move securities settlement to T+1
On February 9, 2022, the Securities and Exchange Commission (SEC) approved a proposal to shorten the securities settlement cycle from T+2 to T+1.