October 3rd/2023.
On August 29th, the Financial Regulation Unit (URF) published an updated version of the Regulatory Agenda 2023-2024. This version, like the original, is divided into four main areas: financial inclusion, financing mechanisms, prudential standards, and support for legislative reforms. In this document, URF divided regulatory development and legislative support into quarters (2023-3 – 2024-2), allowing for a graphical visualization of the projected work for the remainder of the year and the first half of 2024.
This updated version of the Regulatory Agenda shows that the URF recently published a study on parametric insurance and the possibility of its widespread adoption in sectors other than agriculture. Furthermore, the publication of a draft decree on International Financial Reporting Standards (IFRS)’s Rule 17 and a draft decree that changes various aspects of insurance companies’ technical reserves can be observed (both explained in this edition of Financial Notes). These publications were initially scheduled for the first quarter of 2023, indicating a delay of one semester in the regulatory production of the URF. The revised version of the Agenda indicates that the bulk of the work in the first quarter was focused on legislative support for the initiatives presented in the National Development Plan.
In the second quarter, the URF issued a decree on low-value productive credit, specifically digital credit, and completed the comment process on IFRS 17. Additionally, they presented two draft decrees for public comments: one related to updating the regulations for Collective Investment Funds (FIC) (developed in the Financial Notes version published on August 24, 2023), and another regarding the reserve regime for insurance entities. However, it’s important to note that during this quarter, several draft decrees were indefinitely postponed, and others were rescheduled for the last quarters of the year. The postponed projects include the regulation of New Technologies, initially scheduled for the third quarter, and the review of Solvency II (Pillar 1 and RWA review), initially scheduled for the last quarter of the year. Furthermore, projects related to the intersectoral commission, liquidity providers, and specialized supervision SES were removed from the Agenda.
For the remainder of the third quarter of 2023, the URF proposes the introduction of a draft decree regarding transactions in the cooperative sector and another related to collaborative financing schemes (the latter has already been published and deals with specific modifications to the regime applicable to collaborative financing; it can be consulted in the current version of Financial Notes). Additionally, the URF will continue working on draft decrees related to New Technologies, the update of the regulations for Collective Investment
Funds (developed in the Financial Notes version published on August 24, 2023) and the reserve regime. These projects were initiated during the second quarter and may be published as final decrees during the remainder of the year. In this third quarter, several projects were removed from the Regulatory Agenda, including those addressing alternative sources of information, regulatory arbitrations in asset management, and the project on the investment regime of the insurance sector. Finally, the project on Solvency II (Pillar 2 and 3) has been moved to the last quarter of the year.
In the last quarter, the revised Agenda retains projects related to fiduciary business architecture and another focused on segmentation and regulatory updates. Additionally, three new projects have been added: supervision of information operators, market liquidity mechanisms, and SAS (Sociedades por Acciones Simplificadas) issuers of securities (in line with what was approved in the National Development Plan). Compared to the initial version of the Agenda, draft decrees related to shared services centers, the national payment commission, insurance marketing, the immediate payment regime, and the internationalization of the capital market have been removed. As for the immediate payment systems project, it is possible that it will be published in parallel with the Central Bank in matters within its competence.
It is important to highlight that the revised version of the Regulatory Agenda suggests that several legislative initiatives will be presented to Congress during the last quarter of the year. These initiatives include a new Capital Markets Law, a new Law for the Solidarity Sector.