APAC

Hong Kong

Continued Focus on Cybersecurity

The Securities and Futures Commission (SFC) has intensified its focus on cybersecurity and internal controls to protect the investing public from phishing and online scams. This quarter, the SFC issued two circulars and several public warnings addressing these threats.

• In its May 21 circular, the SFC outlined the cybersecurity standards it expects licensed corporations to implement. These include sending regular cybersecurity alerts and reminders to clients and establishing effective monitoring and surveillance systems to detect unauthorized access to internet trading accounts.
• The June 6 circular highlighted common red flags and control deficiencies observed in recent asset misappropriation cases. The SFC noted continued reports of fraud involving client impersonation and internal staff misconduct. It emphasized the need for licensed corporations to verify the legitimacy of client instructions and to manage bank and dormant accounts appropriately to prevent fraudulent activity.

The SFC continues urging firms to adopt proactive measures to safeguard investors and maintain market integrity.

‘Finfluencers’

The SFC has aligned with global regulators to crack down on unlawful financial influencers operating without proper licenses. It has pursued several enforcement actions against so-called “finfluencers” who conducted regulated activities through online and mobile platforms without authorization. In one case, an individual was criminally prosecuted for providing investment advice beyond the scope of his license via a chat group.

To protect the public, the SFC has launched a broad awareness campaign warning investors about scammers impersonating finfluencers on social media. This campaign is set to expand in the coming months.

Singapore

Streamlining of Prospectus Requirements and Broadening of Investor Outreach Channels

On May 15, the Monetary Authority of Singapore (MAS) initiated a public consultation to gather feedback on proposals aimed at streamlining prospectus disclosure requirements and expanding investor outreach for IPOs. Key amendments include refining the regulatory framework for primary listings to ensure disclosures are more targeted and meaningful while aligning the value of information disclosed with the effort required to compile it. For secondary listings, MAS proposes simplifying the process by aligning prospectus requirements with International Organization of Securities Commissions standards.

On the same day, SGX Regulation, the regulatory arm of the Singapore Exchange, launched its own public consultation seeking input on proposed changes to listing admission rules and post-listing disclosure requirements. The consultation paper is available here.

Proposed Revisions to Remove Exemptions Under Financial Advertisement Regulations

On May 3, MAS launched a public consultation proposing the removal of regulatory exclusions that currently exempt certain financial institutions from advertising requirements. This proposal is part of MAS’ broader initiative to enhance market conduct standards, and it aligns with MAS’ 2024 revisions focused on fair dealing and transparency for all investors and customers.

If adopted, the changes would require all financial advertising to convey information accurately, legibly and clearly—regardless of the product, service or target audience, helping ensure consistent and fair communication across the financial sector.

Regulatory Framework for DTSPs

On June 30, Singapore’s regulatory framework for digital token service providers (DTSPs) under Part 9 of the Financial Services and Markets Act 2022 came into effect. Any Singapore-incorporated business offering digital token services, including payment tokens or tokenized securities to overseas clients, must either obtain a DTSP license or cease operations by the effective date. There is no transition period and no tolerance for unlicensed activity.

MAS has stated that licenses will generally not be issued, except in extremely limited cases where applicants demonstrate strong risk management, particularly in anti-money laundering and combating the financing of terrorism (AML/CFT). This initiative aims to close offshore regulatory gaps and align Singapore’s standards with Financial Action Task Force expectations.

Middle East

The National Risk Assessment Report Summary

In April 2025, the UAE’s National Committee for Combating Money Laundering and the Financing of Terrorism and Illegal Organizations released its latest National Risk Assessment. The assessment used advanced data analytics and digital platforms to evaluate operational and tactical indicators across key sectors. Stakeholders included financial institutions (Fis), designated non-financial businesses and professions (DNFBPs), virtual asset service providers (VASPs), and nonprofit organizations.

The report highlighted certain critical risk areas, including the following:

• Misuse of corporate structures
• Trade-based money laundering
• Dual-use goods and weak export controls 
• Vulnerabilities in cross-border financial flows and informal value transfer systems
• Sectoral vulnerabilities
  • FIs and DNFBPs—inconsistent risk awareness and mitigation capacity
  • VASPs—need for stronger compliance frameworks and additional risk from cyber threats to blockchain networks, exploitation by international criminal groups and infrastructure weaknesses

ADGM Q1 Performance Report Summary

The Abu Dhabi Global Market (ADGM) continued its strong trajectory into Q1 2025, building on the record-breaking momentum of 2024. By the end of Q1 2025:

• ADGM hosted 144 asset and fund managers overseeing 184 funds.
• Assets under management increased by 33% YoY.
• Over 600 new businesses were established on Al Reem Island.
• New license issuance rose by 67% compared to Q1 2024.

These figures reinforce ADGM’s position as a leading international financial center and highlight its continued appeal to global market participants.

FSRA’s Amendments to Its Digital Asset Regulatory Framework

The FSRA has implemented recent amendments in ADGM focusing on refining the process for recognizing virtual assets (VAs) as accepted virtual assets (AVAs).

Key changes are:

• Clearer capital and fee requirements for VA firms
• Introduction of product intervention powers
• Formal prohibition of privacy tokens and algorithmic stablecoins
• Expanded investment scope for venture capital funds
• Updated regulatory guidance for AVA assessment compliance

FSRA’s Proposed Enhancements to Cyber Risk Management 

The FSRA has published a consultation paper inviting feedback on proposed amendments to its cyber risk management framework. These amendments build on the existing FSRA IT Risk Management Guidance and Governance Principles, which set best practices for managing technology-related risks across regulated entities.

DFSA’s Major Amendments to the Legislation for Capital Resource Requirements

The DFSA has enacted key amendments to the DFSA PIB Rulebook. Key amendments that were set to go into effect July 1, 2025, included:

• Composition of Capital Resources Requirements: All Authorized Firms must ensure that they are compliant with the DFSA requirements for composition of the Capital Requirements with respect to the Common Equity Tier 1 and Tier 1 Capital.
• Base Capital Requirement: Updates to base capital requirements for Category 3C firms are as follows:

Activity	Old Base Capital Requirements	New Base Capital Requirements
Managing assets and PSIAs	U.S. $500,000	U.S. $140,000
Managing funds that are not public or credit funds	U.S. $70,000	U.S. $40,000

Entities offering more than one of the above financial services are subject to a U.S. $140,000 requirement.

Further key amendments that will go into effect July 1, 2026, are:

• Activity Based Capital Requirement (ABCR): a Basel-aligned framework that adjusts capital requirements based on regulated activity and client asset risks
• Professional Indemnity Insurance: no longer applicable for firms under the ABCR Framework

DFSA Consultation Paper on Fit and Proper Requirements

The DFSA has issued Consultation Paper No. 165 to propose significant changes to its approach to licensed functions and authorized individuals. The amendments reflect international regulatory trends that emphasize greater accountability and governance within financial services firms with the aim of reinforcing firms’ responsibility in appointing and assessing key personnel.

SCA Launches UAE’s First Finfluencer License

The SCA has launched the region’s first “Finfluencer” license to regulate individuals offering financial advice via digital platforms, aiming to enhance investor protection. This initiative introduces a formal framework requiring registration and compliance with content standards, while waiving fees for three years to encourage adoption and innovation.

UAEFIU Requirements for VA Regulatory Authority-Regulated Entities Regarding the IEMS

The Integrated Enquiry Management System (IEMS) is a centralized, secure digital platform developed by the UAEFIU to automate and streamline the processing of inquiries, directives and instructions issued by all domestic authorities concerning AML/CFT.

The UAEFIU mandates VASPs to comply with new requirements for using the IEMS platform. Key obligations include:

• Registration of money laundering reporting officers and compliance officers using goAML credentials
• Assignment of user roles (admin, maker, checker)
• Active monitoring of the IEMS dashboard and message tabs
• Timely response to all requests and immediate execution of freeze actions
• Maintenance of a complete audit trail
• Regular updates to account sections reflecting AML/CFT concerns

United States

Recent SEC Activity

The U.S. SEC, under Chairman Paul Atkins, had an active quarter marked by a clear departure from the prior administration’s regulatory agenda:

1. Rollbacks

• The SEC withdrew 14 rule proposals issued under former Chair Gensler (March 2022–November 2023).
• The SEC extended compliance deadlines for the Investment Company Act “Names Rule” and Form PF amendments (in coordination with the Commodity Futures Trading Commission [CFTC]).

 

2. Strategy Shift

• In May, the SEC sought court approval to voluntarily dismiss several enforcement actions related to unregistered “dealer” activity, an unusual move.
• In June, it filed additional joint stipulations to dismiss three more dealer registration cases.
• The SEC clarified these dismissals were based on “policy matters,” not the merits of the cases.

 

3. Leadership and Enforcement

• On June 13, Chairman Atkins announced new directors for the Divisions of Investment Management and Trading and Markets.
• The Division of Enforcement continued to pursue numerous fraud cases, particularly those involving retail investors.

 

Leadership Changes at CFTC as Digital Asset Legislation Looms Large

The CFTC is undergoing a period of significant transition, both in leadership and regulatory direction.

1. Leadership Changes

• In May 2025, Commissioners Christy Goldsmith Romero and Summer K. Mersinger left the agency.
• The CFTC is now led by Acting Chair Caroline Pham and Commissioner Kristin Johnson—both of whom have announced plans to step down later this year.
• These changes follow the January resignation of former Chair Rostin Behnam.
• President Trump has nominated Brian Quintenz to lead the CFTC, and in June, Quintenz appeared before the Senate Committee on Agriculture, Nutrition, & Forestry for confirmation.
• If confirmed, Quintenz is expected to pursue a regulatory agenda focused on digital assets and rulemaking, aligning with SEC Chair Atkins’ approach.
• No nominees have been announced for the three vacant commissioner seats.

 

2. Regulatory Changes

• Congress is drafting legislation to expand the CFTC’s authority over digital assets.
• The CLARITY Act, introduced in the House in late May, proposes:
  
  • A regulatory framework for digital assets
  • CFTC oversight of spot markets and custody of digital assets, including cryptocurrency
  • Mandatory registration for digital commodity brokers and digital commodity dealers

 

The GENIUS Act

The GENIUS Act, passed by the Senate on June 17 with strong bipartisan support, represents a major step toward establishing a federal regulatory framework for stablecoins—digital assets pegged to fiat currencies like the U.S. dollar. The legislation mandates:

• One-to-one asset reserves
• Segregation of customer funds
• Strict compliance with AML and sanctions laws
• Permission for interest-bearing stablecoin products to foster innovation under regulatory oversight

A dual regulatory model allows smaller issuers to operate under state supervision, while larger or systemically important issues fall under federal jurisdiction. Supporters, including co-sponsor Senator Bill Hagerty, argue the GENIUS Act will enhance consumer protection, strengthen U.S. leadership in digital finance and reinforce the dollar’s role in global payments.

If enacted, the GENIUS Act could reshape the payments landscape by increasing demand for U.S. Treasuries held as reserves and by challenging the dominance of existing stablecoins like USDC and USDT.

This move also raises concerns about market volatility and the concentration of government debt among stablecoin issuers. The GENIUS Act is poised to open the stablecoin market to new entrants, challenging USDC and USDT and promoting a more competitive and secure digital currency ecosystem in the U.S.

Cayman Islands

CIMA AML/CFT Supervisory Information Circular

The Cayman Islands Monetary Authority (CIMA) issued a Supervisory Information Circular in May 2025 outlining key findings from on-site inspections of registered persons (RPs) conducted between January 2022 and March 2024. It highlights significant deficiencies in AML/CFT and related compliance areas. Common issues include: 

• Weak AML/CFT policies
• Inadequate customer due diligence
• Insufficient employee training
• Poor oversight of outsourced compliance functions
• Ineffective governance

CIMA urges RPs and all financial service providers to strengthen their compliance frameworks to meet regulatory standards and reduce the risk of financial crime.