Welcome to the North America (Canada, Mexico and USA) Monthly Spotlight for May 2024. In this edition, we explore the dynamic regulatory landscape across the region, highlighting the implications for businesses. Each segment details key regulatory updates, assessing their impacts and the necessary actions enterprises must take to navigate these changes.
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Canada
Key Regulatory Updates Major Regulatory Changes in Canada
- 30 May 2024 – Canadian Securities Regulators Proposed Changes to Assurance Report Requirements for Designated Benchmarks.
- Impact: These proposed changes aim to address technical issues faced by accounting firms when preparing assurance reports for designated benchmarks. The amendments include revising definitions, introducing a new definition of “reasonable assurance report on controls,” and broadening the scope to include all designated benchmark administrators.
- Action Required: Stakeholders, including accounting firms and benchmark administrators, should review the proposed amendments and prepare to adjust their reporting processes accordingly. They should also participate in the public consultation by submitting comments before the deadline.
- Read More: https://www.securities-administrators.ca/news/canadian-securities-regulators-propose-changes-to-assurance-report-requirements-for-designated-benchmarks/
- 27 May 2024 – Office of the Superintendent of Financial Institutions Seeks Feedback on Changes to Liquidity Rules for Canadian Banks.
- Impact: The proposed changes aim to enhance the liquidity management framework for Canadian banks, ensuring better resilience and stability in the financial sector.
- Action Required: Financial institutions should review the proposed changes, assess the impact on their current liquidity management practices, and provide feedback during the consultation period.
- Read More: https://www.osfi-bsif.gc.ca/en/news/osfi-seeks-feedback-changes-liquidity-rules-canadian-banks
- 27 May 2024 – Canadian Securities Regulators Announced Move to T+1 Settlement Cycle.
- Impact: The move to a T+1 settlement cycle aims to reduce the risk in the settlement process and enhance market efficiency.
- Action Required: Market participants, including brokers, dealers, and custodians, need to update their systems and processes to accommodate the shortened settlement cycle.
- Read More: https://www.securities-administrators.ca/news/canadian-securities-regulators-announce-move-to-t1-settlement-cycle/
- 27 May 2024 – Competition Bureau to Study Competition in Canada’s Airlines Industry.
- Impact: The study aims to assess the competitive dynamics in the airline industry and identify any potential anti-competitive practices.
- Action Required: Airlines and industry stakeholders should be prepared to provide data and insights as part of the study.
- Read More: https://www.canada.ca/en/competition-bureau/news/2024/05/competition-bureau-to-study-competition-in-canadas-airlines-industry.html
- 24 May 2024 – Office of the Privacy Commissioner of Canada Creates New Online Breach Reporting Forms.
- Impact: The new forms aim to streamline the breach reporting process for federal institutions and businesses, ensuring timely and efficient compliance.
- Action Required: Organizations must familiarize themselves with the new forms and integrate them into their breach response protocols.
- Read More: https://www.priv.gc.ca/en/opc-news/news-and-announcements/2024/an_240524/
- 23 May 2024 – Canadian Securities Regulators Adopt Final Amendments Related to Shortened Settlement Cycles for Mutual Funds.
- Impact: The amendments facilitate the transition of mutual funds to shorter settlement cycles, aligning with broader market practices.
- Action Required: Mutual fund managers must adjust their settlement processes and inform investors of the changes.
- Read More: https://www.securities-administrators.ca/news/canadian-securities-regulators-adopt-final-amendments-related-to-shortened-settlement-cycles-for-mutual-funds/
- 17 May 2024 – Minister Guilbeault Imposes Strict Benzene Pollution Controls.
- Impact: The new controls target benzene emissions to promote environmental justice for affected communities, particularly Aamjiwnaang First Nation and Sarnia, Ontario.
- Action Required: Industries involved must implement measures to comply with the new pollution control standards.
- Read More: https://www.canada.ca/en/environment-climate-change/news/2024/05/minister-guilbeault-imposes-strict-benzene-pollution-controls-in-the-pursuit-of-environmental-justice-for-aamjiwnaang-first-nation-and-sarnia-ontario.html
- 6 May 2024 – Canada Cultivates Climate Solutions with Financial Incentive for Sustainable Forest Management.
- Impact: The financial incentive aims to promote sustainable forest management practices, contributing to Canada’s climate action goals.
- Action Required: Forestry companies should apply for the incentive and align their practices with sustainable management criteria.
- Read More: https://www.canada.ca/en/environment-climate-change/news/2024/05/canada-cultivates-climate-solutions-with-financial-incentive-for-sustainable-forest-management.html
Compliance Tips
- Stay Updated with Regulatory Changes: Regularly review updates from relevant regulatory bodies to ensure compliance with new requirements and changes.
- Adjust Reporting and Operational Processes: Modify internal reporting frameworks and operational systems to align with new regulatory standards, such as the T+1 settlement cycle and expanded assurance report requirements.
- Participate in Public Consultations: Engage in public consultations to provide feedback and stay informed about potential impacts on your organization.
- Implement Compliance Measures: Ensure all new compliance measures, such as pollution controls and privacy breach reporting forms, are integrated into your organization’s procedures.
- Prepare for Regulatory Scrutiny: Maintain transparent business practices and be ready to provide data and insights for regulatory studies and feedback requests.
- Apply for Financial Incentives: Take advantage of available financial incentives for sustainable practices and ensure alignment with the criteria.
Important Dates to Remember
- 29 May 2024 – The transition to T+1 settlement cycle in Canada.
- 17 June 2024 – Comments due on the Terms of Reference in the Draft Market Study Notice
- 28 August 2024 – Comments due on the Proposed Changes to Assurance Report Requirements for Designated Benchmarks.
- 30 August 2024 – Comments due on Changes to Liquidity Rules for Canadian Banks.
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Mexico
Key Regulatory Updates Major Regulatory Changes in Mexico
- 8 May 2024 – Public Consultation Launched on the Draft Provisions to Modify Circular 4/2012, Regarding Cross-Border Exchange of Information on Derivative Transactions.
- Impact: The proposed modifications aim to enhance the transparency and regulatory oversight of cross-border derivative transactions. This initiative is part of an effort to align Mexico’s regulatory framework with international standards and best practices, ensuring more effective monitoring and risk management.
- Action Required: Financial institutions and relevant stakeholders should review the draft provisions and participate in the public consultation process. They need to prepare for potential changes in their reporting and information exchange protocols to comply with the new requirements.
- Read More: https://www.banxico.org.mx/publicaciones-y-prensa/miscelaneos/%7B9F2ACD2F-74BC-393A-E9B7-7E9F3E75BFCD%7D.pdf
Compliance Tips
- Review and Update Reporting Systems: Ensure that your current systems for reporting derivative transactions are capable of meeting the new requirements.
- Participate in Public Consultation: Engage with the regulatory process by submitting feedback and comments to influence the final provisions.
- Train Relevant Staff: Conduct training sessions for staff to familiarize them with the new compliance requirements and reporting standards.
- Monitor Regulatory Developments: Stay updated with further announcements and final versions of the provisions to ensure ongoing compliance.
Important Dates to Remember
- 4 June 2024 – Comments due on Draft Provisions to Modify Circular 4/2012.
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United States
Key Regulatory Updates Major Regulatory Changes in United States
- 28 May 2024 – Treasury Amends Regulations to Increase Support for the Cuban People and Independent Private Sector Entrepreneurs
- Impact: The amendments to the Cuban Assets Control Regulations (CACR) are designed to enhance support for the Cuban people and independent private sector entrepreneurs. This includes expanding authorizations for internet-based services and certain financial transactions, allowing Cuban nationals to open and maintain bank accounts in the U.S., and reinstating the authorization for U.S. banks to process U-turn transactions.
- Action Required: Financial institutions must review and update their compliance programs to incorporate the new regulations, ensuring they can support transactions involving Cuban private sector entrepreneurs. U.S. businesses should explore opportunities to engage with the Cuban market under the new authorizations.
- Read More: https://home.treasury.gov/news/press-releases/jy2374
- 24 May 2024 – Cisco Releases May 2024 Cisco ASA, FMC, and FTD Software Security Publication
- Impact: The publication outlines critical security updates and patches for Cisco Adaptive Security Appliance (ASA), Firepower Management Center (FMC), and Firepower Threat Defense (FTD) software. These updates address vulnerabilities that could potentially be exploited by attackers.
- Action Required: Organizations using Cisco ASA, FMC, and FTD software must promptly apply the recommended patches and updates to mitigate the identified security risks and ensure their systems are protected.
- Read More: https://www.cisa.gov/news-events/alerts/2024/05/24/cisco-releases-may-2024-cisco-asa-fmc-and-ftd-software-security-publication
- 23 May 2024 – FTC and DOJ Seek Information on Serial Acquisitions, Roll-Up Strategies Across U.S. Economy.
- Impact: The Federal Trade Commission (FTC) and the Department of Justice (DOJ) are seeking information on serial acquisitions and roll-up strategies to understand their impact on competition and market consolidation.
- Action Required: Companies involved in frequent acquisitions or roll-up strategies should be prepared to provide detailed information about their acquisition practices and potentially face increased scrutiny from regulators.
- Read More: https://www.ftc.gov/news-events/news/press-releases/2024/05/ftc-doj-seek-info-serial-acquisitions-roll-strategies-across-us-economy
- 22 May 2024 – CFPB Takes Action to Ensure Consumers Can Dispute Charges and Obtain Refunds on Buy Now, Pay Later Loans.
- Impact: The Consumer Financial Protection Bureau (CFPB) has introduced measures to protect consumers using Buy Now, Pay Later (BNPL) loans, ensuring they can dispute charges and obtain refunds more easily.
- Action Required: BNPL providers must update their dispute resolution processes to comply with the new requirements and ensure consumers are informed of their rights to dispute charges and seek refunds.
- Read More: https://www.consumerfinance.gov/about-us/newsroom/cfpb-actua-en-prestamos-compre-hoy-y-pague-luego/
- 20 May 2024 – Department of Labor Announces Final Rule Updating the Hazard Communication Standard to Better Protect Workers, First Responders.
- Impact: The updated Hazard Communication Standard aims to improve the safety and health protections for workers and first responders by enhancing hazard communication requirements for chemicals.
- Action Required: Employers must update their hazard communication programs, including labels and safety data sheets, to comply with the new standards and train employees on the updated requirements.
- Read More: https://www.dol.gov/newsroom/releases/osha/osha20240520
- 17 May 2024 – Federal Reserve Board Announces Its Denial of Two Rulemaking Petitions Due to Legal and Policy Considerations.
- Impact: The Federal Reserve Board has denied two rulemaking petitions, citing legal and policy considerations, which may affect regulatory expectations and industry practices.
- Action Required: Affected parties should review the Federal Reserve’s reasoning for the denial and adjust their compliance strategies accordingly.
- Read More: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20240517a.htm
- 16 May 2024 – CISA Publishes Encrypted DNS Implementation Guidance to Federal Agencies.
- Impact: The Cybersecurity and Infrastructure Security Agency (CISA) has released guidance for implementing encrypted DNS to enhance the security and privacy of DNS queries within federal agencies.
- Action Required: Federal agencies must follow CISA’s guidance to implement encrypted DNS protocols, thereby improving the security of their internet communications.
- Read More: https://www.cisa.gov/news-events/news/cisa-publishes-encrypted-dns-implementation-guidance-federal-agencies
- 16 May 2024 – The Department of Labor Issued Principles and Best Practices for the Development and Use of Artificial Intelligence (AI) Technologies.
- Impact: These Principles will create a roadmap for developers and employers on how to harness AI technologies for their businesses while ensuring workers benefit from new opportunities created by AI and are protected from its potential harms.
- Action Required: AI developers and employers should integrate these principles into their AI development and deployment processes to ensure ethical use and protection of worker rights.
- Read More: https://www.dol.gov/general/AI-Principles
- 16 May 2024 – Department of Labor Announces Updates to Improve Retirement Plan Assets Distribution to Workers, Retirees of Bankrupt Companies.
- Impact: The updates aim to streamline the distribution of retirement plan assets to workers and retirees of bankrupt companies, ensuring timely access to their funds.
- Action Required: Employers and plan administrators must review and adjust their processes for distributing retirement plan assets in the event of bankruptcy to comply with the new guidelines.
- Read More: https://www.dol.gov/newsroom/releases/ebsa/ebsa20240516
- 15 May 2024 – EPA Announces Final Rule to Improve Public Awareness of Drinking Water Quality
- Impact: The Environmental Protection Agency (EPA) has finalized the rule to enhance public awareness and access to information about drinking water quality.
- Action Required: Water utilities must comply with the new reporting and notification requirements to ensure the public is adequately informed about the quality of their drinking water.
- Read More: https://www.epa.gov/newsreleases/epa-announces-final-rule-improve-public-awareness-drinking-water-quality
- 14 May 2024 – CISA, DHS, FBI and International Partners Publish Guide for Protecting High-Risk Communities.
- Impact: The guide provides best practices and strategies for protecting high-risk communities from various threats, including cybersecurity risks and physical attacks.
- Action Required: Organizations and communities considered high-risk should implement the recommended practices and strategies to enhance their security and resilience.
- Read More: https://www.cisa.gov/news-events/news/cisa-dhs-fbi-and-international-partners-publish-guide-protecting-high-risk-communities
- 14 May 2024 – Agencies Announce Public Meeting on Proposed Acquisition by Capital One of Discover; Public Comment Period Extended.
- Impact: The Federal Reserve and other regulatory agencies have extended the public comment period and announced a public meeting regarding Capital One’s proposed acquisition of Discover.
- Action Required: Stakeholders should submit their comments during the extended period and participate in the public meeting to express their views on the proposed acquisition.
- Read More: https://www.federalreserve.gov/newsevents/pressreleases/other20240514a.htm
- 8 May 2024 – Department of Labor Plans to Restructure Workplace Safety, Health Regional Operations Strategically to Protect Workers.
- Impact: The strategic restructuring aims to enhance the effectiveness of workplace safety and health regional operations to better protect workers.
- Action Required: Employers should stay informed about the restructuring and any changes in regional operations that may affect their compliance obligations.
- Read More: https://www.dol.gov/newsroom/releases/osha/osha20240508
- 8 May 2024 – Department of Labor Takes Critical Step in Heat Safety Rulemaking, Continues Heightened Enforcement Efforts, Focuses on Dangers to Agricultural Workers.
- Impact: The Department of Labor is advancing heat safety rulemaking and increasing enforcement efforts to address heat-related risks, particularly for agricultural workers.
- Action Required: Employers in the agricultural sector must review and comply with new heat safety regulations and prepare for increased enforcement actions.
- Read More: https://www.dol.gov/newsroom/releases/osha/osha20240508-0
- 7 May 2024 – Federal Reserve Board Requests Comment on Proposal to Expand the Operating Days of the Federal Reserve Banks’ Two Large-Value Payments Services.
- Impact: The proposal to expand the operating days to include weekends and holidays aims to enhance the efficiency and availability of large-value payment services.
- Action Required: Financial institutions should review the proposal and submit their comments to the Federal Reserve to influence the final decision.
- Read More: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20240503a.htm
- 6 May 2024 – Agencies Issue Proposal on Incentive-Based Compensation.
- Impact: The proposal aims to regulate incentive-based compensation practices to mitigate excessive risk-taking by financial institutions.
- Action Required: Financial institutions should review the proposal and assess its impact on their compensation policies, submitting comments as necessary.
- Read More: https://www.fdic.gov/news/press-releases/agencies-issue-proposal-incentive-based-compensation
- 6 May 2024 – Biden-Harris Administration Announces Final Rule to Cut Methane Emissions, Strengthen and Update Greenhouse Gas Emissions Reporting for the Oil and Gas Sector.
- Impact: The final rule aims to significantly reduce methane emissions and improve greenhouse gas emissions reporting in the oil and gas sector.
- Action Required: Oil and gas companies must update their emissions reporting practices and implement measures to reduce methane emissions in compliance with the new rule.
- Read More: https://www.epa.gov/newsreleases/biden-harris-administration-announces-final-rule-cut-methane-emissions-strengthen-and
- 3 May 2024 – Agencies Issue Guide to Assist Community Banks to Develop and Implement Third-Party Risk Management Practices.
- Impact: The guide provides community banks with best practices for managing risks associated with third-party relationships.
- Action Required: Community banks should adopt the recommended third-party risk management practices to enhance their oversight and control of third-party relationships.
- Read More: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20240503b.htm
- 2 May 2024 – EPA Announces Final Rule to Protect Water Quality Where Tribes have Treaty and Reserved Rights.
- Impact: The final rule aims to protect water quality in areas where tribes have treaty and reserved rights, ensuring environmental justice and compliance with tribal treaties.
- Action Required: Entities operating in these areas must ensure their activities comply with the new water quality standards to protect tribal rights and water resources.
- Read More: https://www.epa.gov/newsreleases/epa-announces-final-rule-protect-water-quality-where-tribes-have-treaty-and-reserved
Compliance Tips
- Review and Update Compliance Programs: Financial institutions must review the amended regulations, especially those related to Cuban private sector entrepreneurs, internet-based services, and U-turn transactions. Update compliance programs to align with the new rules.
- Apply Security Patches Promptly: Organizations using Cisco ASA, FMC, and FTD software should promptly apply the security patches released to mitigate identified vulnerabilities and enhance system security.
- Monitor Acquisition Practices: Companies involved in frequent acquisitions should be prepared to provide detailed information about their acquisition practices as requested by the FTC and DOJ.
- Enhance Consumer Dispute Processes: BNPL providers must update their dispute resolution processes to comply with the CFPB’s new requirements and ensure consumers are informed of their rights.
- Update Hazard Communication Programs: Employers must update their hazard communication programs, including labels and safety data sheets, to comply with the new standards and train employees on the updated requirements.
- Implement Encrypted DNS Protocols: Federal agencies must follow CISA’s guidance to implement encrypted DNS protocols to improve the security of their internet communications.
- Integrate AI Principles: AI developers and employers should integrate the Department of Labor’s AI principles into their development and deployment processes to ensure ethical use and protection of worker rights.
- Prepare for Retirement Plan Updates: Employers and plan administrators must review and adjust their processes for distributing retirement plan assets in the event of bankruptcy to comply with the new guidelines.
- Enhance Drinking Water Reporting: Water utilities must comply with the new EPA reporting and notification requirements to ensure the public is adequately informed about the quality of their drinking water.
- Adopt Third-Party Risk Management Practices: Community banks should adopt the recommended third-party risk management practices to enhance their oversight and control of third-party relationships.
- Comply with Heat Safety Regulations: Employers in the agricultural sector must review and comply with new heat safety regulations and prepare for increased enforcement actions..
- Update Incentive-Based Compensation Policies: Financial institutions should review the proposal on incentive-based compensation and assess its impact on their compensation policies, submitting comments as necessary.
- Implement Methane Emission Reduction Measures: Oil and gas companies must update their emissions reporting practices and implement measures to reduce methane emissions in compliance with the new rule.
- Ensure Compliance with Tribal Water Quality Standards: Entities operating in areas with tribal treaties must ensure their activities comply with the new water quality standards to protect tribal rights and water resources.
Important Dates to Remember
- 2 July 2024 – Comments due on the proposal to expand the operating days of the Federal Reserve Banks’ two large-value payments services to include weekends and holidays, so that they would operate every day of the year.
- 22 July 2024: Comments due to identify serial acquisitions, roll-ups that have harmed competition, consumers, workers, and innovation.
- 24 July 2024: Comments due on the proposed acquisition by Capital One of Discover.
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