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Policy and Regulatory Brief by EDFA

AI act:
The Council adopted its general approach on the Artificial Intelligence Act that will be discussed and negotiated with the European Parliament in the future trilogues. The proposal aims to create an horizontal framework and a risk-based approach for AI technologies according to the following points:

  • Definition of AI systems.
  • prohibited AI practices.
  • classification and requirements for high-risk AI.
  • compliance and surveillance.

Consumer Credit Directive (CCD):
A provisional agreement on the Consumer Credit Directive has been reached by the European Parliament and the Council. The revised directive brings the following changes::

  • Imposing new obligations to lenders such as the duty to inform consumers about the total cost of the credit.
  • accessibility of the information.
  • New scope of creditworthiness assessment, now also concerning loans below 200 EUR, loans offered through crowd-lending platforms, buy-now-pay-later products.
  • From now on when the creditworthiness assessment is negative, a creditor cannot make the credit available to the consumer.

VAT in the Digital Age
The Commission exposed its plan for the VAT in the Digital Age package. The objective is to simplify the international payment system using digitalisation according to three main points:

  • A move to real-time digital reporting based on E-invoicing for businesses that operate cross-border in the EU and a harmonized framework for domestic transactions.
  • Updated VAT rules for passenger transport and short-term accommodation platforms.
  • The introduction of a single VAT registration system across the EU.

Directive on Administrative Cooperation (DAC8)
The consultation for the DAC e-money and crypto anti tax fraud and evasion amendments are open on the Commission Website. The new amendments would impose significant information gathering requirements for e-money and crypto intermediaries, imposing them obligations to hold further personal information on their customers. Further news is expected in the next few weeks.

UK crypto-tokens property law
The UK Law Commission proposed a Property Act Law reform addressing especially digital assets such as cryptocurrencies, NFTs and others:

  • Recognition of the third category of personal digital property.
  • Recognition of crypto-tokens as data objects.
  • Crypto-tokens are subject to property rights.
  • Law reform proposals for crypto-token custody relationships.
  • Transfers of crypto-tokens should undergo the rules of derivative transfer.

Bitcoin risks
An article published on the ECB website by the ECB DG of Market Infrastructure and Payments warns on the extensive use of bitcoin and the possible speculative bubble of crypto currencies. The writers also warn on the possibility of reputational damage for financial institutes and advise for a better global regulatory system for crypto-currencies.

Cyber component in insurance stress testing framework
The European Insurance and Occupational Pensions Authority (EIOPA) published a Discussion Paper on Methodological Principles of Insurance Stress Testing focusing on Cyber Risk. The document mentioned above discusses different approaches to the potential future of insurance stress tests with high focus on cyber and hybrid risks.

Corporate Sustainability Due Diligence Directive (CSDDD)
A general position suggesting the exclusion of the financial sector from the scope of the CSDDD was published by the Council of the EU. If adopted as proposed, the financial institutions would espace liability for human rights violations occurring under business activities financed by their loans. However the European Parliament is still discussing a rather different position.


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