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Wirecard can resume regulated activity

On 29 June 2020, the FCA provided written consent to allow Wirecard to resume issuing e-money and providing payment services. The restriction on activities will lift at 00.01 on 30 June 2020.

The primary objective of these requirements was to protect the electronic money funds of consumers in safeguarded accounts.  It also had the effect of preventing consumers from withdrawing and making payments with those funds.  The FCA’s consent means that Wirecard can now resume electronic money and payment services to its customers and customers can now, or very shortly, use their cards as usual.

What happened to Wirecard?

On 26 June 2020, the FCA imposed a number of requirements on Wirecard including, that the firm must not dispose of any assets or funds, that it must not carry on any regulated activities and that it must set out a statement on its website that it is no longer permitted to conduct any regulated activities. This follows ongoing events in Germany concerning Wirecard’s parent company, Wirecard AG. Wirecard AG is not supervised by the FCA.

The FCA has been working closely with Wirecard and other authorities to ensure that the firm was able to meet the conditions required to lift certain requirements that we imposed on it. We know that some customers have faced difficulties over the weekend but the steps we took were the right ones to protect everyone’s money.  Our primary objective has always been to protect the interests and money of consumers who use Wirecard. We have worked with Department of Work and Pensions (DWP), Her Majesty’s Treasury (HMT) and the Home Office over the weekend in order to help any customers suffering financial distress and directed people to that support on our website.

We are now in a position to allow Wirecard to resume regulated activity and on 29 June 2020, the FCA provided written consent to Wirecard to resume issuing e-money and providing payment services. We continue to monitor Wirecard’s activities closely and certain requirements continue to remain in force. These should not, however, affect the services Wirecard provides to its customers. This means customers can now or very shortly use their cards as necessary.

What requirements remain in place on Wirecard?

There continue to be certain requirements in place which have been imposed on Wirecard’s authorisation. These requirements include restrictions over where it can hold customer monies and restrictions over its ability to transfer its own assets.

The FCA continues to work with the firm to progress these matters.

What should I do if I have e-money with Wirecard, use Wirecard to make payments or my prepaid card has stopped working? Who do I contact?

Customers should now or very shortly be able to use their cards as usual. If they are still experiencing difficulties, customers should contact their card provider directly and may do so using the contact details on their website.

Customers can also contact our Consumer Helpline for further information. 

What should I do if I gave money to an agent of Wirecard?

E-money firms like Wirecard may provide payment services through agents. An agent is any person (this can be an individual or a company) who provides payment services on behalf of an e-money firm. E-money firms may also appoint distributors to distribute or redeem e-money but distributors cannot provide payment services. Unlike agents, there is no requirement to register distributors. Agents are registered by the FCA and published to the FCA’s Register. Where e-money firms appoint agents or distributors they are responsible for their activities.

Customers should now, or very shortly, be able to use their cards as usual. If they are still experiencing difficulties, customers should contact their card provider directly and may do so using the contact details on their website.

What should I do if I gave money to an agent of Wirecard which is based in another EEA country?

An authorised e-money firm, like Wirecard, may provide payment services or e-money activities in another European Economic Area (EEA) country. This is called ‘passporting’. Passporting is when a business carries on activities and services regulated under EU law in another EEA country on the basis of authorisation or registration in its home country. The activities may be carried out in the host country using a branch or a local agent / distributor or, on a cross-border services basis without a physical presence in the host country for example, a website.

Customers should now or very shortly be able to use their cards as usual. If they are still experiencing difficulties, customers should contact their card provider directly and may do so using the contact details on their website.

The account where I receive my benefit payments has been frozen, what do I do? 

Customers should now or very shortly be able to use their cards as usual. The FCA has been working with the Department of Work and Pensions (DWP) to arrange help for affected consumers. If you are still experiencing difficulties, please refer to the DWP(link is external) for support.

Are my funds protected by FSCS?

No. The Financial Services Compensation Scheme (FSCS) only applies to certain types of activity which does not include issuing electronic money or payment services. 

Under the EMRs and PSRs, there are rules on how customers’ money should be protected and these requirements are known as ‘safeguarding’.

Is there a chance I won’t get my money back? What is safeguarding?

Safeguarding is a key consumer protection measure within the Electronic Money Regulations 2011 and the Payment Services Regulations 2017 which are the rules setting how e-money and payments firms should conduct their businesses. The purpose of safeguarding is to protect and return customer money if a firm was to fail.

Wirecard is required under the EMRs to maintain appropriate measures to safeguard customers’ money. It does this by holding it separate from its own money in accounts with banks (or another credit institution). Effective safeguarding arrangements are critical to help ensure that customers’ money is protected and returned if a firm fails. Adequate safeguarding arrangements which are compliant with the regulatory requirements are a condition of Wirecard’s ongoing FCA authorisation.

What should I do if I am a firm who outsources some operational functions to Wirecard?

Firms should contact Wirecard directly to discuss the recommencement of any activities. Firms may also contact their relevant Supervision contact and we have a dedicated Customer Contact Centre to give your firm a direct point of contact:

To note, we are currently consulting on new requirements on the firms we supervise to help strengthen their operational resilience including, the implications for operational resilience for firms using outsourcing and other third-party service providers. Find out more information. We would also draw your attention to the EBA Guidelines on Outsourcing Arrangements which apply to e-money and payment firms.

What happens next?

There continues to be requirements imposed on Wirecard’s authorisation and these are published on the FCA’s Register.  The FCA continues to work with the firm to progress these matters.

If you think you have been scammed

Be aware that fraudsters look for opportunities like these to target customers. If you have any concerns at all about a potential scam, contact us immediately.

You can report the firm or scam to us by contacting our Consumer Helpline on 0800 111 6768 or by using our reporting form

You should also contact Action Fraud(link is external) online or by calling 0300 123 2040.

New York proposes making it easier to use cryptocurrency

New York’s financial regulator on Wednesday proposed new licensing rules that would make it easier for companies to engage in cryptocurrency business — using such digital currencies as bitcoin — in the state.

The New York State Department of Financial Services is asking for the public’s input about the plan by Aug. 10. The initiative stems from the “actual or perceived hurdles” that firms may face in obtaining the state’s “BitLicense,” unveiled in 2015, the regulator said.

New York’s proposed framework would allow companies that want to engage in virtual currency business activity in the state to obtain a conditional license, through which they would collaborate with fully licensed companies, NYDFS said.

New York introduced its BitLicense and initial framework in 2015, when other regulators were still skeptical of virtual currencies. Those currencies are now part of a broader, rapidly growing industry that blends finance and technology, and which leading financial centers are keen to attract.

But obtaining New York’s current BitLicense can be a years-long process, virtual currency companies have said.

The state has granted 25 virtual currency licenses and charters since 2015, NYDFS said.

The regulator on Wednesday also made it easier for companies to offer and use new coins. The regulator will provide a list of pre-approved coins from which licensees can select and then self-certify they are using without having to get additional approval.

Source:Ny post

SEC Emergency Action Halts Brothers’ Cryptocurrency Offering Fraud


Washington D.C., June 19, 2020 —

The Securities and Exchange Commission today announced that it filed an emergency action and obtained a temporary restraining order and asset freeze against two Pennsylvania-based brothers and three entities they control to stop an offering fraud and the misappropriation of investor proceeds.

According to the SEC’s complaint, from at least July 2019 through May 2020, brothers Sean Hvizdzak and Shane Hvizdzak offered securities in a private fund that purported to invest in digital assets by misrepresenting fund performance, fabricating financial statements, and forging audit documents. For example, the complaint alleges that the Hvizdzaks misrepresented in marketing materials that the fund earned 100.77% and 92.90% on its investments during the third and fourth quarters of 2019, when in fact the fund actually lost money in those quarters. In addition, the SEC alleges that the brothers diverted tens of millions of dollars from the fund to personal accounts at banks and digital asset trading platforms, and then transferred the assets on multiple blockchains to themselves and others. 

“As alleged in our complaint, the Hvizdzaks touted exceptional, but false, performance to potential investors when offering their fund,” said Adam S. Aderton, Co-Chief of the SEC’s Asset Management Unit. “Investors should be skeptical of claims that seem too good to be true.”

The SEC complaint, unsealed today in federal court in the U.S. District Court for the Western District of Pennsylvania, charges the Hvizdzaks, Hvizdzak Capital Management, LLC, High Street Capital, LLC, and High Street Capital Partners, LLC with violating the antifraud provisions of federal securities laws.

On June 16, 2020, in addition to granting a temporary restraining order and an asset freeze, the court ordered an accounting, expedited discovery, and an order prohibiting the destruction of documents. A hearing is scheduled for June 30, 2020, to consider continuing the asset freeze and the issuance of a preliminary injunction.

The SEC’s investigation, which is continuing, is being conducted by Luke Fitzgerald, Donna Norman, and Andrew Shoenthal of the Asset Management Unit, Donald A. Ryba of the Chicago Regional Office, and Morgan Ward Doran of the SEC’s Cyber Unit. The investigative team was supervised by Corey Schuster of the AMU. The SEC’s litigation will be led by Matthew Scarlato and James Smith and supervised by Jan Folena.

Ongoing Global Uncertainty Sees DGCX G6 Currency Volumes Continue Upward Trajectory

Increased trading activity in G6 currency portfolio comes ahead of launch of three FX Rolling Futures Contracts in July

Among the G6 currency pairs, Euro, British Pound, and Yen Futures contracts registered the strongest performances, recording impressive Y-O-Y ADV growth of 516.2%, 336.42%, and 588.67% respectively.

Les Male, CEO of DGCX, said: “We are seeing continued currency volatility with markets and investors being pulled by two opposing currents; concerns over rising tensions between the US and China, and increasing optimism as lockdown measures ease across the globe. The upward trajectory of the DGCX’s G6 currency volumes reflects the strength and depth of our offerings in today’s uncertain climate and is testament to our efforts to widen investor participation and enhance liquidity.”

The increased trading activity in the DGCX’s G6 currency portfolio comes ahead of its launch of three FX Rolling Futures Contracts at the beginning of July.

 “We are excited to further strengthen our value proposition by expanding our portfolio of currency products with FX Rolling contracts – perpetual rolling FX contracts for three currency pairs. We expect these to be particularly beneficial to our institutional investors by enabling them to hedge more efficiently during this period of heightened volatility,” Male added.

Total volumes on the DGCX in May totaled 0.88 million contracts, valued at USD 20.66 billion. The DGCX last month also recorded Average Open Interest (AOI) of 167,297 contracts. Open Interest (OI) is a definitive measure of an DGCX’s success, and the DGCX’s continued strong OI this year is a reflection of the robustness of its trading platform.

About DGCX: Established in 2005, DGCX is the region’s leading derivatives exchange and the only one allowing global participants to trade, clear and settle transactions within the Gulf region. The Exchange has played a pioneering role in developing the regional market for derivatives and financial infrastructure. DGCX is an electronic commodity and currency derivatives exchange with over 200 members from across the globe, offering futures and options contracts covering the precious metals, energy, equities and currency sectors. DGCX is a subsidiary of DMCC (Dubai Multi Commodities Centre), a Dubai Government Authority for trade, enterprise and commodities. For more

DGCX also owns and operates the region’s largest and only multi-asset Clearing House – Dubai Commodities Clearing Corporation (DCCC). DCCC is federally regulated by the Securities & Commodities Authority (SCA) and is recognized as a Third-Country CCP by European Securities Markets Authority (ESMA) with over 50 clearers from across the globe. For more information:

MAS Launches S$1.75 Million FinTech Innovation Challenge for a Covid-Resilient and Greener Financial Sector

Singapore, 8 June 2020… The Monetary Authority of Singapore (MAS) announced today the launch of a S$1.75 million MAS Global FinTech Innovation Challenge. The competition will seek innovative solutions that can help financial institutions respond to two critical global challenges: COVID-19 and climate change.

2.     The theme for the competition is “Building Resilience, Seizing Opportunities, Emerging Stronger”. Through the competition, MAS aims to promote FinTech solutions that will help financial institutions adapt effectively to the new operating environment precipitated by the COVID-19 pandemic as well as apply FinTech capabilities to spur the development of green finance in Asia and globally.

3.     The competition comprises the revamped MAS FinTech Awards and the MAS Global FinTech Hackcelerator. It will be hosted entirely on the API Exchange (APIX), a cloud-based innovation platform, which will not only help to source for FinTech solutions for specific focus areas but also allow these solutions to be curated, contextualised, and validated. [1]  

MAS FinTech Awards

4.     The MAS FinTech Awards, supported by PwC Singapore, recognise innovative FinTech solutions that have been implemented to address the two global challenges. The FinTech Awards are open to FinTech firms, financial institutions, and solution providers worldwide.

5.     This year, there will be two new award categories – ASEAN FinTech and Singapore Financial Institution – which will celebrate innovative projects from FinTechs in ASEAN and Singapore-based financial institutions respectively.  Interested parties can submit applications through APIX to demonstrate how their implemented projects have successfully enabled financial institutions to respond effectively to the pandemic or climate change.

6.     In all, up to 12 winners will be selected to receive a total of S$1.2 million in prize money. (See Annex A for more details on the MAS FinTech Awards)

MAS Global FinTech Hackcelerator

7.     The MAS Global FinTech Hackcelerator matches innovative market-ready solutions with industry’s actual technology needs.  It comprises two segments: the Local Programme and the International Programme.

8.     The Local Programme, supported by KPMG Digital Village, will publish high-priority problem statements collated from the finance industry in Singapore and globally. A record 107 problem statements were received this year, across four categories: (i) Responding to a global pandemic; (ii) Green finance solutions; (iii) Green finance enablers; and (iv) Sustainability. FinTech solution providers from across the world are invited to submit their proprietary solutions to any of these problem statements.  The finalists will be mentored by industry experts to strengthen their proposals and to develop customised prototypes on APIX, which will provide them access to a development sandbox rich in data and Application Programming Interfaces (APIs).

9.     The International Programme comprises winners of FinTech competitions organised by international partners, including the Saudi G20 Presidency, the Bank for International Settlements Innovation Hub, Women’s World Banking, and the United Nations Capital Development Fund (UNCDF). The winners of these partner competitions will be fast-tracked into the finals of the Global FinTech Hackcelerator.

10.     Up to 20 finalists of the Global FinTech Hackcelerator will each receive a S$20,000 cash stipend for their preparations for the Hackcelerator Demo Day. From these finalists, up to three winners will be selected on Demo Day at the Singapore FinTech Festival, with each receiving S$50,000 in prize money. For more details on the Local and International Programmes, refer to Annex B.

11.     Mr Sopnendu Mohanty, Chief FinTech Officer of MAS, said, “The unique challenges posed by the health, economic, and climate crises which we are facing will inspire bold innovations and solutions. MAS is delighted to recognise through the FinTech Awards effective solutions that have already been implemented, as well as help match industry partners with innovative FinTech firms seeking more support for their ideas through the Hackcelerator programme. We strongly encourage all innovators to take part in this global competition and showcase their solutions to the world.”

12.     Applications for the MAS FinTech Awards can be submitted here  and applications for the MAS Global FinTech Hackcelerator can be submitted here .

New Government Guidelines Makes Accelerating Artificial Intelligence Possible

Amanda Russo, Public Engagement, World Economic Forum, +1 415 734 0589,

  • If deployed properly, artificial intelligence (AI) can help society tackle big data problems faster.
  • New guidelines launched today can help governments accelerate efficiencies through use of trusted AI and prepare for future risks.
  • The UK government piloted and adopted the toolkit across departments; the UAE through the Dubai Water and Electricity Authority, tested the guidelines.
  • They will help established companies, start-ups and new entrants to the AI space compete on a level playing field for government contracts.
  • Read the report and explore more information about the Forum’s AI work.

San Francisco, USA, 8 June 2020 – Prior to COVID-19, government investment in AI had surpassed billions of dollars in research and development. With a premium now placed on speed to develop vaccines and diagnostics for the coronavirus, there is a renewed emphasis on the role of AI and how governments can ensure it is used in a trusted manner.

The World Economic Forum’s Artificial Intelligence and Machine Learning team built and piloted with partners tools for governments to procure artificial intelligence solutions built with ethics in mind. The Procurement in a Box toolkit includes concrete advice for purchasing, risk assessments, proposal drafting and evaluation.

Over the past year, the Forum worked with the United Kingdom’s Office for AI in the Department for Digital, Culture, Media & Sport, Deloitte, Salesforce and Splunk, as well as 15 other countries and more than 150 members of government, academia, civil society and the private sector. The development process incorporated workshops and interviews with government procurement officials and private sector procurement professionals.

The UK used the guidelines in procurement processes with the Department for Business, Energy and Industrial Strategy and the Food Standards Agency. In-depth user testing with workshops in departments such as the Department for Transport or the Defence Science and Technology Laboratory looked at the applicability of guidelines for commercial teams and how to best implement them. User testing helped the government refine the guidance and develop step by step guidance documents now in use across the departments. It was also picked up by organisations such as NHSX as guidance for AI purchases.

“The current pandemic has shown us more needs to be done to speed up the adoption of trusted AI around the world,” said Kay Firth-Butterfield, Head of Artificial Intelligence and Machine Learning at the World Economic Forum. “We moved from guidelines to practical tools, tested and iterated them – but this is still just a start. Now we will be working to scale them to countries around the world.”

“The UK is a global leader in AI and I am pleased we are working with the World Economic Forum and international partners to develop guidelines to ensure its safe and ethical deployment,” said Caroline Dinenage, Digital Minister, United Kingdom. “By taking a dynamic approach we can boost innovation, create competitive markets and support public trust in artificial intelligence. I urge public sector organisations around the world to adopt these guidelines and consider carefully how they procure and deploy these technologies.”

“As a trusted AI advisor to governments around the world, we were thrilled to collaborate with the World Economic Forum and the government of the UK in the development of procurement guidelines that help the public sector put AI at the service of its constituents in a manner that is both efficient and ethical,” said Shelby Austin, Managing Partner, Growth & Investments and Omnia AI, Deloitte, Canada. “As our societies reorganize and make progress in our fight against COVID-19, the need for multi-stakeholder cooperation has never been more apparent. We believe in these joint efforts, and we believe in the power of data-driven decision-making to help our countries recover and thrive.”

“Splunk has supported the development of these guidelines and worked closely with the World Economic Forum and UK government,” said Lenny Stein, Senior Strategic Advisor, Splunk. “We believe the guidance will help enable governments across the world to transform citizen services and deliver ethically sound and beneficial AI-based solutions. This guidance is even more relevant post COVID-19, given the need to deliver fairer outcomes, more inclusive approaches, and the promise of the data age.”

The guidelines were also tested in the UAE through a collaboration between the Centre for the Fourth Industrial Revolution UAE and the Dubai Water and Electricity Authority, DEWA. As part of the exercise, DEWA with the help of the Forum and the Centre, developed and reviewed a proposal for a chatbot application, which allows DEWA executives to quickly obtain answers to data-related questions. The application, which is a continuation of a customer-facing chatbot deployed by DEWA, highlights the benefits of using AI in developing more efficient and effective chatbots.

“As the UAE’s shift towards a knowledge-based economy gathers pace, the country has become a reliable testbed and leader in the development and execution of guidelines and frameworks that enable the large-scale deployment of emerging technologies such as Artificial Intelligence,” said Khalfan Belhoul, CEO of the Dubai Future Foundation, the host entity of Centre for the Fourth Industrial Revolution UAE. “In an era that will continue to be dominated by the transformative technologies emerging from the Fourth Industrial Revolution, integrating AI into the public sector for everyday use will significantly elevate the performance of government departments.”

The Procurement in a Box Workbook provides clear guidelines and use case examples, including learnings from the UAE trial with DEWA, to enable a transition from current public sector procurement processes to methodical steps to acquire and embed AI technologies into existing frameworks. The workbook will become a reference point for specialists and support the next phase of tech utilization across the public sector.

The Forum’s Unlocking Public Sector AI project is bringing together a multistakeholder community to empower government officials to more confidently make responsible purchasing decisions. Over the next six months, governments around the world will test and pilot these guidelines. Further iterations will be published based on feedback learned on the ground.

Notes to editors

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The HKMA and the banking industry launch the Banking Talent Programme

The Hong Kong Monetary Authority (HKMA) and the banking industry jointly launched the Banking Talent Programme (the Programme) today (4 June 2020) to nurture young talents for the industry, and provide participants with an opportunity to better prepare for future careers in the banking sector.  The Programme targets fresh graduates from local universities who will be offered six-month work opportunities and industry-specific training.

The Programme is supported by the Hong Kong Association of Banks (HKAB) and all local universities.  Further details of the Programme are set out below:

  • Job opportunities: Around 300 openings will be offered by banks, Stored Value Facilities operators, together with the HKMA.  Work opportunities will be provided in areas ranging from front-line operations to back-office functions in retail and commercial banking;
  • Professional training: A series of induction seminars as well as professional training courses will be organised by the HKMA, in collaboration with the Hong Kong Academy of Finance, the Hong Kong Institute of Bankers (HKIB) and reputable industry practitioners;
  • Programme period: The Programme will start from early September 2020 and last for a period of six months;
  • Financial support: The HKMA will reimburse participating firms up to 50% of the monthly salary of Programme participants, which is HK$12,000 per month, and subsidise the course fees for the relevant professional training courses attended by the graduates;
  • Eligibility: Students graduating with a bachelor’s degree in 2020 from local universities may apply for the Programme, and the disciplines preferred will depend on the work nature of specific jobs and the need of participating firms; and
  • Application: Application will open on 15 June and the results will be announced by participating firms around end of July after selection interviews.

Mr Eddie Yue, Chief Executive of the HKMA, said, “Joining the job market during a recession can be very stressful.  It is therefore encouraging that the banking industry is providing full support to our new Banking Talent Programme, which aims to provide both short-term relief and valuable learning opportunities to young graduates who aspire to develop their career in the banking sector.  In turn, the Programme also benefits the industry by expanding the talent pool to support the future growth of Hong Kong’s banking sector.”

Further information about the job opportunities provided by the participating firms and other details will be posted on the website of the HKIB (, the administrator of the Programme, from 15 June 2020.

FTSE Straits Times Index (STI) quarterly review – June 2020

− One change to the constituents of the STI

FTSE Russell announces that there will be one change to the constituents of the Straits Times Index (STI), following the June 2020 quarterly review. Mapletree Industrial Trust has been added to the STI. As a result, Singapore Press Holdings has been removed from the index.

The STI reserve list, comprising the five highest ranking non-constituents of the STI by market capitalisation, will be (in order of size) Keppel DC REIT, Suntec REIT, NetLink NBN Trust, Frasers Logistics & Industrial Trust and Keppel REIT. Stocks on the reserve list will replace any constituents that become ineligible as a result of corporate actions, before the next review. A full list of STI constituents can be found on the website.

FTSE Russell has partnered with Singapore Press Holdings (SPH), publisher of The Straits Times newspaper, and Singapore Exchange (SGX) to jointly calculate Singapore’s main stock market benchmark. The STI is widely followed by investors as the benchmark for the Singapore market and is used as the basis for a range of financial products including Exchange Traded Funds (ETFs), warrants, futures and other derivatives. FTSE Russell is the index administrator.

All changes from this review will be made effective from start of trading on Monday 22 June 2020. The next review will take place in September 2020. The indexes are reviewed quarterly in accordance with the index ground rules and to facilitate the inclusion of eligible IPO stocks. The FTSE ST methodology ensures the indexes accurately represent the investable universe for benchmarking purposes and can be easily replicated as the basis of index-linked products.

SEC Awards Record Payout of Nearly $50 Million to Whistleblower

Whistleblower Program Reaches $500 Million in Total Awards


Washington D.C., June 4, 2020 —

The Securities and Exchange Commission today announced a nearly $50 million whistleblower award to an individual who provided detailed, firsthand observations of misconduct by a company, which resulted in a successful enforcement action that returned a significant amount of money to harmed investors.  This is the largest amount ever awarded to one individual under the SEC’s whistleblower program. The next largest is a $39 million award to an individual in 2018.  Two individuals also shared a nearly $50 million whistleblower award that same year.

“This award marks several milestones for the whistleblower program,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower.  “This award is the largest individual whistleblower award announced by the SEC since the inception of the program, and brings the total awarded to whistleblowers by the SEC to over $500 million, including over $100 million in this fiscal year alone.  Whistleblowers have proven to be a critical tool in the enforcement arsenal to combat fraud and protect investors.”

The SEC has awarded over $500 million to 83 individuals since issuing its first award in 2012.  All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators.  No money has been taken or withheld from harmed investors to pay whistleblower awards.  Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action.  Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million.

As set forth in the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers and does not disclose information that could reveal a whistleblower’s identity.

Bank of Russia proposes new approaches to market-making regulation

The innovations proposed by the Bank of Russia are aiming to mitigate the risks of market manipulations that may be committed under the guise of maintaining exchange trading parameters. The relevant draft ordinance is available on the Bank of Russia’s website.

Market making is a tool to provide liquidity to the financial market. It implies that bidders and offerers (market makers) maintain prices, demand, supply, and trading volumes based on agreements with exchanges by using particular financial instruments, currency, or commodities. However, over the course of its inspections, the Bank of Russia established cases where brokers’ clients had been actually manipulating the market posing it as market making.

The draft ordinance specifies which transactions are essentially classified as maintenance of exchange trading parameters. The new approach is also intended to limit the range of clients on whose behalf market-making transactions may be conducted. Specifically, individuals will be obliged to meet the requirements stipulated by the exchange.

According to the draft ordinance, market makers should only be able to fuflill their obligations based on ‘passive’ bids and offers, that is, such bids and offers that result in actual transactions provided that a market order of the opposite direction is issued afterwards.

Exchanges should verify market-making orders for consistency on a daily basis, including for marks indicating that they have been issued as part of a market maker’s obligations.

The innovations are expected to become effective in April 2021.

You are welcome to send your feedback on this draft ordinance to the Bank of Russia until 26 June 2020. After scrutinising all comments and suggestions, the Bank of Russia is going to carry out additional discussions of the draft ordinance with the market community.