Insight

Washington Report 360 | April 1, 2022

SEC 2022 exam priorities; Cyber incident reporting into affect April; FDIC proposed climate principles

Amy S. Matsuo

Amy S. Matsuo

Regulatory and ESG Insights Leader, KPMG US

+1 919-664-7100

Key Highlights

  • Examination priorities. The SEC published its FY22 examination priorities, highlighting areas of “significant focus” including, ESG, Emerging Technologies and Crypto-Assets, Information Security and Operational Resiliency, Private Funds, and Standards of Conduct.
  • Cybersecurity risks. The FRB, OCC, and FDIC reminded supervised entities that their joint cyber incident notification requirements go into effect April 1, 2022 and compliance is required beginning May 1, 2022; the agencies have each designated points of contact for the required notifications. (See KPMG Regulatory Alert here)
  • Climate risk. The FDIC published proposed principles for climate-related financial risk management that closely follow the OCC’s earlier proposal; the principles would apply to supervised entities with more than $100 billion in total consolidated assets. The FDIC specifically seeks comment about entities’ current risk management practices; sources for data, metrics, and tools; and use of scenario analysis.  
  • Crypto risk. An SEC Accounting Bulletin directs registrants to disclose the crypto assets they are safeguarding for their platform users, citing technological, legal, and regulatory risks and uncertainties.  (See KPMG POV, Assessing crypto and digital asset risks here)
  • Agency leadership. The Senate confirmed four nominees to serve as commissioners at the CFTC.

Financial services regulatory and policy news

Banking

  • Interagency:
    • FRB, OCC, and FDIC each named designated contacts as required in their joint rulemaking for “Computer-Security Incident” Notifications; compliance is required beginning May 1, 2022
  • FRB:
    • NY FRB hosted a web series on culture and trust in banks
  • OCC:
  • FDIC:
    • Issued a request for comment on Statement of Principles for Climate-Related Financial Risk Management for Large Financial Institutions
    • Issued the Spring 2022 Consumer Compliance Supervisory highlights featuring most frequently cited violations and categories of consumer complaints
  • CFPB:
    • Issued a report on Credit Card Late Fees
    • Extended the comment period on its request for information related to “junk fees”
    • Provided remarks on regulatory responses to address repeat offenders

Capital Markets

  • SEC:
    • Proposed two rules to include certain market participants as ‘Dealers’ or ‘Government Securities Dealers’
    • Proposed rules to Enhance Disclosure and Investor Protection Relating to Special Purpose Acquisition Companies, Shell Companies, and Projections
    • Released a Staff Bulletin on the obligations of broker-dealers and investment advisers when making account recommendations to Retail Investors; related statement  
    • Released a Staff Accounting Bulletin on financial statement disclosures for registrants that safeguard crypto-assets for their platform users
    • Announced its 2022 examination priorities
  • FINRA:
    • Proposed a rule change to amend Rule 2360 (Options) to increase the position and exercise limits for conventional options on certain exchange-traded funds

Other

  • Treasury:
    • OFAC announced new sanctions against additional entities and individuals tied to the aerospace, marine, and electronics sectors
    • FinCEN provided remarks on effective AML/CFT compliance programs and enforcement
  • U.S. Congress:
    • Senate:
      • Confirmed four commissioners to the CFTC: related CFTC statement
    • House:
      • Passed the Securing a Strong Retirement Act of 2022 (SECURE Act 2.0); the bill now moves to the Senate for consideration
  • BIS:
    • Released 2022 Triennial Central Bank Survey of Foreign Exchange and OTC Derivatives Markets
    • Announced development of a prototype supervisory analytics platform
  • ISSB
    • Published proposals covering sustainability-related financial disclosures and climate-related disclosures

Industry news headlines

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