Financial Compliance

FCA and ICO clarify vulnerability data expectations for firms

The UK Financial Conduct Authority (FCA) and Information Commissioner's Office (ICO) published a joint statement clarifying regulatory expectations for financial firms on the use and sharing of vulnerability-related customer data. The statement addresses how firms should identify vulnerable customers, design appropriate products and communications, share data across distribution chains, and monitor outcomes under consumer duty while complying with UK GDPR.

New Paradigm for Crypto Assets: A Deep Dive into the SEC's Interpretive Release

Venable LLP analyzes the SEC's March 17, 2026 interpretive release on crypto assets, which establishes a five-category taxonomy (digital commodities, digital collectibles, digital tools, stablecoins, and digital securities) and applies the Howey test to distinguish securities from non-securities in the crypto space. The release supersedes the 2019 Framework for Investment Contract Analysis of Digital Assets and provides guidance on various crypto activities including mining, staking, and airdrops.

Treasury GENIUS Act Rule, CFTC Lawsuits, DOL 401(k) Alternatives, Crypto Tax Bill

Paul Hastings summarizes four major U.S. financial regulatory developments: Treasury's NPRM establishing criteria for state stablecoin regimes to qualify as substantially similar to the federal GENIUS Act framework; CFTC's lawsuits against Arizona, Connecticut, and Illinois asserting exclusive federal jurisdiction over prediction markets; DOL's proposed rule creating a fiduciary safe harbor for including alternative investments in 401(k)s; and House members releasing an updated Digital Asset PARITY Act discussion draft addressing digital asset taxation.

Cayman Islands clarifies tokenized fund regulatory framework

The Cayman Islands Monetary Authority has amended the Mutual Funds Act, Private Funds Act and Virtual Asset (Service Providers) Act to establish a clearer regulatory framework for tokenized investment funds. The amendments introduce new record-keeping obligations, enhanced risk disclosures and annual confirmation requirements to CIMA, while clarifying that regulated fund issuance of digital investment interests does not require separate VASP Act approval.

New IDX Listing Rule: Enhancing free float and governance

The Indonesia Stock Exchange (IDX) issued Decree No. Kep-00045/BEI/03-2026 on March 31, 2026, implementing revised listing rules that take immediate effect. Key changes include increasing the minimum free float threshold for continued listing from 7.5% to 15%, raising initial listing thresholds based on market capitalization to 15-25%, and adding new corporate governance requirements. The rule aims to prevent Indonesia's downgrade from emerging to frontier market status by improving transparency and market liquidity.

CFTC Enforcement Director Outlines Updated Priorities, Previews Cooperation Policy

New CFTC Division of Enforcement Director David I. Miller announced five enforcement priorities at NYU Law School on March 31, 2026: insider trading in prediction markets, market manipulation, retail fraud, spoofing and manipulation in derivatives markets, and emerging digital asset misconduct. Miller also previewed a forthcoming cooperation advisory that will provide a clear path to declinations for parties who self-report, fully cooperate, and remediate violations. The Division plans to hire additional staff to pursue these priorities.

Third Circuit CEA Preemption for Prediction Markets Confirmed

The U.S. Court of Appeals for the Third Circuit issued a 2-1 ruling in KalshiEX LLC v. Flaherty, No. 25-1922, holding that the Commodity Exchange Act preempts New Jersey's gambling laws as applied to Kalshi's sports-related event contracts traded on CFTC-registered designated contract markets. The court found these contracts qualify as "swaps" under the CEA, triggering exclusive federal jurisdiction and shielding operators from state regulation under field and conflict preemption doctrines.

UK FCA Findings From Multi-Firm Review On Operational Resilience

The UK Financial Conduct Authority (FCA) published findings from a multi-firm review of operational resilience self-assessments following the transition period ending March 31, 2025. The FCA highlights good and poor practices across six categories: important business services and impact tolerance, mapping resources, scenario testing, vulnerability management, communications plans, and governance. Firms are encouraged to use these observations to review and evolve their operational resilience approaches.

National Association of Industrial Bankers v. Weiser - En Banc Rehearing on DIDMCA Opt-Out

The Tenth Circuit granted en banc rehearing in National Association of Industrial Bankers v. Weiser, vacating its November 2025 panel decision that had allowed Colorado to apply its Uniform Consumer Credit Code interest-rate caps to loans made by out-of-state, state-chartered banks to Colorado borrowers. The court will reconsider whether DIDMCA § 525's phrase 'loans made in such State' allows opt-out states to regulate out-of-state bank lending to their residents. Supplemental briefing has been ordered on preemption and interpretive issues.

SEC Rescinds Crypto Accounting Rule: What It Means for Money Transmitters and Digital Asset Custody

Ankura published an analysis of the SEC's rescission of Staff Accounting Bulletin No. 121 (SAB 121) and its replacement with SAB 122, which eliminated requirements that made cryptocurrency custody economically prohibitive for publicly traded banks. The article examines the regulatory shift toward a more crypto-friendly stance under the Trump administration and its implications for money transmitters and digital asset custody services.