Banking Regulations Update

📣 Breaking: Two big moves in Brussels on EU sustainability regulation: 1️⃣ EFRAG has officially been tasked with simplifying the ESRS (see the letter below). The Commission’s letter sets a tight timeline: advice due by 31 October 2025. The revised standards could apply from FY2026 and must apply by FY2027. What does simplification mean in practice? -Cut low-priority datapoints -Prioritise quantitative over narrative reporting -Provide clearer instructions on materiality to reduce over-reporting -Ensure interoperability with global standards This is a chance to course-correct some of the confusion and concerns that have surrounded CSRD implementation. 2️⃣ The European Parliament has just approved urgent procedure for the ‘stop-the-clock’ measure in the Omnibus Regulation. That means the final vote on the CSRD/CSDDD delays is scheduled for 3 April. If adopted, co-legislators can begin negotiating the final legal text. Why it matters: The decisions made in the coming weeks will define the direction of EU sustainability policy for the next several years. Simplification may be overdue, but if ambition is lost along the way, the cost will be much higher than administrative burden. #CSRD #CSDDD #EUGreenDeal #sustainabilityreporting #EFRAG #ESRS #sustainablefinance

The Financial Action Task Force (FATF) has released its Updated Recommendations (February 2025), reinforcing international standards on AML, CFT, and Combating the Financing of Proliferation (CFP). Key Highlights: ✅ Risk-Based Approach (RBA) Strengthened • Countries and financial institutions must continuously assess ML/TF risks. • Proliferation financing risks (linked to WMDs) must now be explicitly assessed and mitigated. • Greater emphasis on data-driven decision-making in risk management. ✅ Stronger Financial Crime Enforcement & Asset Recovery • Enhanced measures to identify, freeze, and confiscate illicit assets, even without conviction-based legal proceedings. • Countries must cooperate more effectively on cross-border investigations related to ML, terrorism, and sanctions evasion. • Expanded legal mandates for regulators to seize cryptocurrency-related assets used for illicit activities. ✅ Enhanced Corporate Transparency & Beneficial Ownership Regulations • Stricter disclosure requirements for companies and trusts to prevent anonymous ownership structures facilitating financial crime. • Introduction of centralized registries for beneficial ownership information, accessible by regulators and FIUs. • Bearer shares and nominee shareholder arrangements are further restricted due to their role in obfuscating ownership. ✅ New Standards for Virtual Assets & Emerging Technologies • FATF mandates stronger oversight on VASPs, aligning AML rules for crypto-assets with traditional financial institutions. • New tech-based compliance controls (including AI-driven monitoring) recommended to enhance financial crime detection. • Stricter regulations for cross-border virtual asset transactions to combat illicit financing and crypto-enabled ML. ✅ Expanded Measures Against Terrorist Financing & Sanctions Evasion • Countries must implement targeted financial sanctions to prevent terrorism and WMD proliferation financing. • NPOS are now required to assess their terrorist financing risks while ensuring legitimate operations are not disrupted. • Greater scrutiny on correspondent banking relationships to prevent facilitation of illicit transactions. ✅ Increased International Cooperation & Mutual Legal Assistance • FATF calls for faster cross-border financial intelligence sharing to prevent criminals from exploiting jurisdictional gaps. • Countries must align with UNSCRs on CTF and sanctions enforcement. Recommandations: 🔹 Implement advanced transaction monitoring using AI to detect suspicious financial activities more effectively. 🔹 Reinforce beneficial ownership compliance 🔹 Strengthen cross-border AML/CFT coordination by fostering partnerships between FIs, regulators, and law enforcement agencies. 🔹 Ensure robust oversight on virtual assets by applying FATF’s Travel Rule to cryptocurrency transactions and monitoring DeFi risks. #AML #FATF #FinancialCrime #Compliance #CryptoRegulation

The European Council unanimously approved the new ESG ratings regulation. This was the final legal step. The regulation will now be published and then apply 18 months after publication (so in 2026). 1️⃣ ESG rating providers will be authorised and supervised by the European Securities and Markets Authority (ESMA) and must comply with transparency requirements, as a minimum disclosing "the methodology, models, and key rating assumptions." 2️⃣ Rating providers' different business activities need to be separated, but regulators leave a backdoor open: no separate legal entities need to be created if raters can show that activities are separated and no conflicts of interest exist. 3️⃣ Separate E, S, and G ratings should be provided. If a single ESG rating is provided, rating providers need to disclose the rate and weight attributed to each dimension. 4️⃣ If ESMA finds that a rater has intentionally or negligently infringed the Regulation, it should adopt a fine (max 10% of total annual net turnover). At the same time, the UK regulator has also released and updated draft legislation to regulate ESG ratings. Good to see that the market, which some described as the "Wild West", is getting some more transparency requirements... === EU Regulation (final text): https://lnkd.in/dU-PbiiG UK Regulation (draft text): https://lnkd.in/duQRJc-G #sustainability, #esg, #sustainablefinance

Commercial Registration 2.0: Saudi Arabia Redefines Ease of Doing Business → A bold regulatory shift empowering investors, simplifying growth, and unlocking nationwide opportunity. As of Thursday, April 3, 2025, Saudi Arabia launched a new Commercial Registration (CR) system, marking a significant milestone in the Kingdom’s ongoing journey to modernize its regulatory landscape and strengthen its position as a global investment hub aligned with Vision 2030. 🔅 Here’s what’s new: 🔸️ One CR, Nationwide No more city-specific limitations—a unified commercial registration now applies across all regions, offering businesses unprecedented flexibility to operate and grow anywhere in the Kingdom. 🔸️ No More Renewals Traditional CR renewals have been replaced with a simple annual data update, ensuring continuity and accuracy without administrative friction. 🔸️ 5-Year Transition Period Businesses with multiple CRs have until April 3, 2030 to consolidate them into a single unified record, simplifying their legal footprint. 🔸️ English Trade Names Now Permitted Businesses can now register names in English, with the option to include: ▪️ Letters and numbers for brand distinction ▪️ Greater flexibility for international-facing enterprises 🔸️ Transfer of Trade Names Allowed Trade names can now be transferred between merchants—under clear conditions—unlocking: ▪️ Opportunities for brand acquisition ▪️ Strategic collaboration between businesses 🔸️ Stricter Naming Regulations To protect commercial identity and ensure market integrity: ▪️ Use of family names is now restricted ▪️ Misleading names are explicitly prohibited 🔅 But Saudi Arabia’s transformation doesn’t stop here… The new CR system is part of a wider, ongoing regulatory evolution aimed at building a healthier, more transparent, and investment-friendly business environment. 🔸️ New Companies Law ▪️ Promotes agility, innovation, and sustainability for startups and enterprises alike 🔸️ Updated Trade Regulations ▪️ Streamline business operations ▪️ Protect commercial and consumer rights 🔸️ Unified Digital Platforms ▪️ Integrate registration, licensing, and contracting ▪️ Save time, reduce complexity, and improve user experience 🔸️ Upcoming Strategic Legal Frameworks Saudi Arabia is currently developing four key legislative pillars to further support governance and investor confidence: ▪️ Personal Status Law ▪️ Civil Transactions Law ▪️ Penal Code for Discretionary Sanctions ▪️ Law of Evidence These laws aim to: ▪️ Accelerate dispute resolution ▪️ Strengthen legal clarity ▪️ Create a globally aligned investment climate This isn’t just an administrative update— It’s a strategic transformation placing Saudi Arabia at the forefront of modern business law and regulatory excellence. #SaudiArabia #Vision2030 #EaseOfDoingBusiness #CommercialRegistration #BusinessLaw #RegulatoryReform #Transparency #Governance #InvestmentClimate #Entrepreneurship #LegalTransformation

Weighing You Down: The new Capital Requirements proposed under Basel III Endgame will prove onerous for Banks & Borrowers, alike. Today, I examine the Commercial Real Estate sector since this asset class is highly reliant on banks (and vulnerable) and the CRE market is contending with a huge pending maturity wall. Banks account for ~50% of the CRE debt market, representing the largest collective lender to CRE - this equates to nearly $3T in the U.S. alone. Below, I have constructed a table that very clearly states (my source from various federal documents that include: Note 20.86 on the Basel Framework (BIS) & Page 164 of September 2023 FDIC Proposed Rules notice) how a bank must measure its cash reserve requirements (CRR) for a given loan. Notice the change in risk weightings required for a given LTV. For a given loan, ~+20% higher risk weighted capital will be required that will soon be subject to this new measurement for risk. The bank lender will be required to hold additional capital for a given loan, or alternatively, simply extend less credit when writing a new loan as they apply more conservative detachment points (e.g. $50M loan vs. $100M asset value which is 50% LTV vs 80% LTV previously). If the bank does not want to increase its CRR, it must reduce the amount of credit it extends for a given asset/borrower. The delta is stark; this is a paradigm shift that will crack the door wide open for Private Credit Lenders. Banks will differentiate, take a more discerning eye when extending credit, with greater discipline going forward under Basel III Endgame. The new Basel III Endgame capital guidelines required by federal banking regulators and implemented in 2025 will break down risk-weighted assets by blending what is considered senior-secure risk v. unsecured risk (within a single unitranche loan). Regulators are confident that by imposing stricter capital requirements and more onerous stress tests when reporting liquidity, assets, operations, capital requirements, large banks (30 banks in U.S. with assets greater than $100B) will become less risky and less prone to failure. Banks are with their regulators to push back on Basel III Endgame capital charges; I am sure Banks will find a middle-ground with their regulators, but it will still result in additional and significant costs and more conservative lending practices. Private Credit firms such as Marathon Asset Management will provide a critical role in filling the void, to partner with banks and originate a plethora of investment opportunities that arise: - Mezz debt loans to fill the capital gap as banks roll loans at lower LTVs - Private Credit gaining more market share as banks reduce ABL exposure, for all ABL segments (not just CRE) - Asset Sales by banks - CRT/SRT transactions as private capital allows banks to offload risk - Private Capital & Bank Investment - Management Partnerships The current ratios vs. the proposed ratios are starkly contrasted in this table below:

𝗜𝗿𝗲𝗹𝗮𝗻𝗱 𝗔𝗻𝗻𝗼𝘂𝗻𝗰𝗲𝘀 𝗡𝗲𝘄 𝗪𝗼𝗿𝗸 𝗣𝗲𝗿𝗺𝗶𝘁 𝗦𝗮𝗹𝗮𝗿𝘆 𝗧𝗵𝗿𝗲𝘀𝗵𝗼𝗹𝗱𝘀 — 𝗘𝗳𝗳𝗲𝗰𝘁𝗶𝘃𝗲 𝗠𝗮𝗿𝗰𝗵 𝟮𝟬𝟮𝟲 If you're planning to work in Ireland — or hiring international talent — the government has 𝗷𝘂𝘀𝘁 𝗿𝗲𝗹𝗲𝗮𝘀𝗲𝗱 𝗺𝗮𝗷𝗼𝗿 𝘂𝗽𝗱𝗮𝘁𝗲𝘀 𝘁𝗼 𝘄𝗼𝗿𝗸-𝗽𝗲𝗿𝗺𝗶𝘁 𝘀𝗮𝗹𝗮𝗿𝘆 𝘁𝗵𝗿𝗲𝘀𝗵𝗼𝗹𝗱𝘀. These changes will affect thousands of applicants and employers. 📅 𝗘𝗳𝗳𝗲𝗰𝘁𝗶𝘃𝗲 𝗳𝗿𝗼𝗺: 𝟭 𝗠𝗮𝗿𝗰𝗵 𝟮𝟬𝟮𝟲 📝 Source: Department of Enterprise, Trade & Employment 🔹 What’s Changing? 💼 General Employment Permit (GEP) ➡️ Minimum salary rising from €𝟯𝟰,𝟬𝟬𝟬 → €𝟯𝟲,𝟲𝟬𝟱 🎓 Critical Skills Employment Permit (CSEP) ➡️ Threshold increasing from €𝟯𝟴,𝟬𝟬𝟬 → €𝟰𝟬,𝟵𝟬𝟰 🌱 Sector-specific roles (meat processing, horticulture, healthcare assistants, carers) ➡️ Minimum increasing from €𝟯𝟬,𝟬𝟬𝟬 → €𝟯𝟮,𝟲𝟵𝟭 🎓👩🎓 𝗘𝗮𝗿𝗹𝘆-𝗰𝗮𝗿𝗲𝗲𝗿 𝗴𝗿𝗮𝗱𝘂𝗮𝘁𝗲𝘀 ➡️ A lower starting threshold will apply to support entry-level professionals ( 𝗘𝗴 . 𝗖𝗦𝗘𝗣 𝗚𝗿𝗮𝗱𝘂𝗮𝘁𝗲𝘀 : €𝟯𝟲,𝟴𝟰𝟴 ) 📈 These increases are part of a broader roadmap running to 2030, designed to modernize Ireland’s employment-permit system. ✅ Why This Matters 👨💼 𝗙𝗼𝗿 𝗷𝗼𝗯 𝘀𝗲𝗲𝗸𝗲𝗿𝘀 & 𝗶𝗺𝗺𝗶𝗴𝗿𝗮𝗻𝘁𝘀: Ensure your salary offer meets the new minimums before applying. Some lower-paid roles may no longer qualify. 🏢 𝗙𝗼𝗿 𝗲𝗺𝗽𝗹𝗼𝘆𝗲𝗿𝘀 & 𝗿𝗲𝗰𝗿𝘂𝗶𝘁𝗲𝗿𝘀: International hiring is becoming more regulated — review salary bands before issuing contracts to avoid permit rejections. As someone working closely with job seekers and employers through Career Ireland, I strongly recommend reviewing these updated thresholds now and aligning your plans accordingly.

📣 It’s that time of year again 2025 was the year regulators stopped asking “do you have a policy?” and started asking “can you prove this actually works?” Across AML, fraud, sanctions, digital assets and AI, supervision has shifted decisively toward evidence, outcomes, and real-world effectiveness. Controls are no longer assessed on design alone, they’re being tested on performance, speed, and resilience. That’s why we’ve published Plenitude’s RegIntel: 2025 Recap & 2026 Outlook: an analysis of how financial crime regulation evolved across 2025, and what firms must now prepare for in 2026. The report brings together developments across the UK, EU, US, Singapore and global bodies, and shows how: • AML, fraud, sanctions, crypto and AI risk are rapidly converging • Supervisors are moving from policy review to deep operational testing • AI, instant payments and digital assets are reshaping both risk and regulatory expectations • Accountability is shifting decisively to demonstrable, board-level ownership Most importantly, the paper translates regulation into action. Each section distils change into: ✔ what actually matters ✔ Key Actions firms can take now ✔ a forward-looking 2026 outlook to support real planning, not box-ticking As we move into 2026, the message from regulators is consistent and unmistakable: ▶️Show me the evidence. ▶️Show me it works. 👏 This paper is never a small effort and I want to particularly call out the massive efforts of Thomas Hudson, Ciarán McMullan, & Daniel Keay As always, each year we aim to improve upon the previous year. Have suggestions? We'd love to hear them

Understanding the Imperative: Basel III and Post-Crisis Reforms The financial crisis of 2008 was a stark reminder of the interconnectedness and vulnerabilities within the international financial system. The crisis exposed significant weaknesses in the global regulatory framework, particularly under Basel II, necessitating a more robust and resilient banking system. Understanding why Basel III and other post-crisis reforms were introduced is crucial for banking professionals who are navigating these regulatory environments. Although Basel II was a significant advancement over its predecessor, it became apparent during the financial crisis that it did not go far enough in preventing the build-up of systemic risk. Basel II was heavily reliant on internal risk assessments by banks, which proved to be overly optimistic and insufficient in the face of financial distress. The framework also lacked stringent requirements for liquidity and leverage, allowing banks to operate with high leverage while maintaining insufficient liquid assets. Basel III was developed to address these shortcomings and to significantly strengthen the global capital framework. Key enhancements introduced by Basel III include: 1. Higher Capital Requirements: stricter capital requirements, increasing both the quantity and quality of capital banks must hold. This includes a higher ratio of equity to risk-weighted assets, ensuring that banks have enough capital to absorb losses during periods of financial stress. 2. Countercyclical Buffers: To prevent excessive credit growth that can lead to asset bubbles, Basel III introduced countercyclical capital buffers, requiring banks to hold additional capital during periods of high credit growth, which can be reduced when conditions worsen. 3. Leverage Ratio: Unlike Basel II, Basel III introduced a non-risk-based leverage ratio to serve as a safeguard against excessive leverage on banks' balance sheets. This measure helps ensure that banks' expansion is matched by solid capital support. 4. Liquidity Requirements: Basel III established two key liquidity ratios - the Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR). These ensure that financial institutions maintain sufficient high-quality liquid assets to withstand a 30-day stressed funding scenario and promote more stable funding structures. The implementation of Basel III and its ongoing updates reflect an ongoing commitment to fortifying the global banking system against future crises. These reforms have led to a more conservative banking environment where institutions must operate with higher levels of capital and stronger risk management practices. Understanding the rationale and requirements of Basel III is not just about regulation, but about appreciating the role of these reforms in fostering a more stable banking system. As the landscape continues to evolve, the insights gained from these reforms will be essential in guiding future regulatory changes.

The RBI just did something MASSIVE. And barely anyone is talking about it. Yesterday, the Reserve Bank of India consolidated 9,446 circulars into just 244 Master Directions. Let that sink in. For decades, banks, NBFCs, and financial institutions have been drowning in regulatory chaos: → Circulars dating back to 1940 (yes, 1940!) → Hundreds of documents to cross-reference → Constant fear of missing a compliance update → Teams spending countless hours just finding the right rule All of that? Gone. Now every regulated entity has: ✅ One single reference point per topic ✅ Clear, consolidated guidelines by entity type ✅ Live updates in master directions (no more circular hunting) ✅ Zero obsolete rules cluttering the system The impact? • Compliance officers can finally breathe • Smaller NBFCs compete on equal footing (no more “regulatory literacy” gaps) • Faster decision-making across the financial sector • Fewer compliance errors = less regulatory risk This isn’t just housekeeping. This is regulatory reform done right. The RBI even put drafts online in October, gathered 770+ responses, and incorporated feedback before going live. That’s how you modernize a trillion-dollar financial system. If you work in banking, fintech, compliance, or financial services in India—this changes your day-to-day work starting NOW. Kudos to Reserve Bank of India (RBI) What’s the biggest regulatory pain point you’ve faced? Drop it in the comments 👇 #RBI #BankingReforms #Compliance #FinancialServices #IndianBanking #RegulatoryReform #Fintech