The UK government has announced plans to regulate crypto assets and crypto platforms in a manner “consistent with its approach to traditional finance”.

The Derivatives Service Bureau's unique product identifier aims to help regulators track potential systemic risks within the OTC derivatives market. 

Discussions around operational risk are rippling further down bank supply chains due to regulators taking more interest in resilience as digitisation gains momentum. However, there are concerns that not enough attention is being paid to future proofing risk management.   

More regulation of crypto assets was already in the pipeline but the recent turbulence in crypto markets has raised the stakes. The coming year will be pivotal as new restrictions start to apply to crypto asset businesses and the path is laid for further regulation in the years to come.

The UK sticking relatively close to the Basel framework will nonetheless mean that it will diverge further from the EU, which is opting to pursue more exceptions in its capital rules.  

The European Commission’s proposals on euro clearing seem to have been significantly influenced by Brexit and geopolitical factors, potentially placing the bloc’s derivatives industry in a stronger competitive position.

It is tempting to dismiss the UK government’s plans to scrap banker bonus caps, reintroduce a competitiveness mandate for regulators and to potentially dilute conduct rules to turbo charge the City of London’s growth as a return to casino capitalism. The reality is somewhat more nuanced.

Payment for order flow in equities markets is proving one of the toughest issues to crack in the EU’s review of its market rules and is likely to be tackled last by policy-makers.

If you were to ask a member of the general public how a regulatory body is funded, they will probably scratch their head before replying that they think it is some sort of state-funded grant.