🏦 Jeroen Krens to Chair ISDA

📰 Welcome to the Newsletter

Good morning, at Global Custody Pro we track what's happening in global custody, clearing, payments, and digital assets. We filter through industry news to bring you what matters most in clear language.

This week we report on ISDA’s new chair, what the FSB is proposing for non-bank financial intermediaries, more consultation from the FCA on crypto regulation, and ESMA’s final drop of MiCA guidance.

Hit reply and let us know where you think financial services regulation is headed in 2025. We are expecting a move towards lower regulation in the USA but similar levels of regulation being maintained or even rising in the UK, EU and Asia. The implications for competition and innovation will be enormous in the next few years.

🌏 Global Custody News

• ISDA has announced that Jeroen Krens as Chair, replacing Eric Litvack who has served for 10 years in the role. He is currently Managing Director, COO, Markets & Securities Services at HSBC and has been on the board since November 2016. He previously served on the board 2012 - 2014 when he worked at RBS. According to the most recent Form 990 filed for 2022, the organisation earned US$66,998,440 including US$42,236,826 in membership dues for the year ending 31 December 2022.

• The Financial Stability Board (FSB) published a 2024 report on non-bank financial intermediaries (NBFIs). NBFIs are essentially entities that aren’t banks, central banks or official institutions. The report found that NBFIs are now almost 50% of total global financial assets. These entities will face growing scrutiny from regulators as they seek to maintain financial stability around the world, and the number of entities covered is enormous and covers every country with the added complexity of cross-border connections.

• Keeping up the pace into the Christmas season, the FSB also released a consultation paper recommending leverage limits for NBFIs. Building on the recent history of scenarios like the collapse of Archegos, the Gilt crisis caused by liability-driven investing by UK pension funds, and the March 2020 “dash for cash” repo issues, they are recommending a package of data and reporting reforms to enable better management of these financial stability risks. The consultation submissions will end on 28 February 2025.

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🚀 Digital Asset News

• The UK’s Financial Conduct Authority is consulting on admissions, disclosures, and market abuse in the crypto asset space. This builds on its program of work building out their regulatory framework on crypto assets as shown in the diagram above. The consultation period will end on 14 March 2025.

• The European Securities and Markets Authority (ESMA) has released its final reports on the standards and guidelines ahead of the Markets in Crypto Assets Regulation (MiCA) entering into force on December 30 2024. Commenting on the changes, the ESMA chair Verena Ross said “…it is crucial to recognise that the new regime would not suffice to eliminate the inherent uncertainty and volatility in the crypto-assets market…”.

• The Block reported that Jerome Powell told a press conference “we’re not allowed to own bitcoin”. Whether that will still be the case once regulatory reform in the USA has progressed or not in 2025 - we’ll be watching.