Thank you, Christa. It is wonderful to be with you here on the University of Virginia's beautiful campus. This is my first visit here as an adult. As a child, I was fortunate enough to be able to attend the commencement ceremony of my aunt and uncle, who received their doctoral degrees from UVA several decades ago. My family and I are grateful to the University of Virginia for all the educational opportunities it has afforded us over the years. I look forward to connecting with many of the exceptional students and faculty during my visit.1 As a member of the Federal Reserve Board, I always find it a pleasure to hear from people in communities across the country and to share some views of my own. At the Fed, I am committed to pursuing the best policy to achieve the dual-mandate goals given to us by Congress of maximum employment and price stability. Today, I would like to share with you my outlook for the economy, including some international comparisons of productivity and inflation, and offer my views on U.S. monetary policy. Broadly, I view the economy as being in a good position. Inflation has substantially eased from its peak in mid-2022, though core inflation remains somewhat elevated. Unemployment remains historically low, but the labor market is no longer overheated. Economic growth has been robust this year, and I forecast the expansion will continue. Looking ahead, I remain confident that inflation is moving sustainably toward our 2 percent objective, even if the path is occasionally bumpy. Meanwhile, I see employment risks as weighted to the downside, but those risks appear to have diminished somewhat in recent months. InflationInflation, as measured by the personal consumption expenditures (PCE) price index, has eased notably from a peak of 7.2 percent in June 2022. Estimates based on the consumer price index and other data released last week indicate that total PCE prices rose 2.3 percent over the 12 months ending in October. Core PCE prices—which exclude the volatile food and energy categories—increased 2.8 percent, down from a peak of 5.6 percent in February 2022. Despite this significant progress on disinflation, the elevated core figure suggests that we have further to go before credibly achieving our inflation target of 2 percent. Although most price indicators suggest that progress is ongoing, I anticipate bumps along the road. For instance, when measured on a monthly basis, estimated core PCE inflation stepped up in September and October after four months of lower readings. Even so, I still see headline and core inflation falling to 2.2 percent next year and to lower levels after that. Moreover, disinflation has been widespread across a broad range of goods and services. Taken together, recent data support my view that the disinflationary process is continuing. Thinking of the components of inflation, core goods and core services inflation excluding housing are now at rates consistent with previous periods when inflation averaged about 2 percent. As a result, housing services account for most of the excess of core inflation over our target. Despite a slowing in rent increases for new tenants over the past two years, recent research from the Federal Reserve Bank of Cleveland suggests that existing rents for continuing tenants may still be notably below new tenant rent levels.2 Existing rents rising toward market rent levels is keeping housing services inflation temporarily elevated. My view is that housing services inflation will come down gradually over the next two years as the earlier slowing of growth in new tenant rent feeds through into the overall rate. Recently, other inflation factors have been subdued. Core import prices have continued to step down from the surprisingly strong pace in the first half of the year. Global oil prices have fluctuated, largely in response to developments in the Middle East, but are back near the lows reached in late summer. My confidence in continued disinflation is further reinforced by the moderation in wage growth. The employment cost index report showed that hourly compensation for private-sector workers rose at a 2.9 percent annual rate in the third quarter, the lowest since 2021. The 12-month change in average hourly earnings in October was 4 percent, down from 4.3 percent during the previous year. The wage premium for job switchers, a significant contributor to wage growth early in the pandemic recovery, has largely disappeared, according to data from the Federal Reserve Bank of Atlanta. Labor MarketTurning to the labor market, on balance, recent data suggest that it remains solid. Monthly increases in firms' payrolls have slowed from earlier this year but are consistent with only a gradual cooling in the labor market. The October employment report did show a sharp slowdown in job creation, but that was largely due to the temporary effects of recent hurricanes and a labor strike. While economists and forecasters often focus on aggregate data for the national economy, it is important to acknowledge that hurricanes Helene and Milton resulted in the tragic loss of life and devastating destruction in many parts of the country, including some here in the state of Virginia. My thoughts remain with those affected communities. The Federal Reserve System remains in touch with these communities to help the financial institutions that serve them in any way we can.3 The broader trend I see is that national job growth is solid but perhaps not quite strong enough to keep unemployment at the current low rate. Net hiring so far this year is running somewhat below estimates for what economists call the breakeven pace, or the rate of hiring needed to keep the unemployment rate constant, when accounting for changes to the size of the labor force. With job growth coming in below the breakeven pace, which was likely more than 200,000 jobs a month over the past year, the unemployment rate has risen from a historical low of 3.4 percent in April 2023 to 4.1 percent in October. Other data are also consistent with a gradual cooling in labor demand. The vacancies-to-unemployment ratio has fallen from a peak of 2.0 in 2022 to 1.1 in September, slightly below where it stood just before the pandemic. The rate at which workers are quitting their jobs continued to slide in recent months to well below its pre-pandemic level, which could indicate that workers are less optimistic about finding a better job should they leave their current role. Notably, firms' hiring rates and hiring plans remain subdued, while workers report reduced availability of jobs. Although layoffs remain low, less hiring makes it harder for labor market entrants and reentrants to find jobs. Also, our contacts report that employers are being more selective, waiting to find workers with the skills they seek, rather than pursuing a hire-and-train strategy. Overall, I see a labor market that has largely normalized after being overheated because of pandemic disruptions and dislocations. The labor market is in a good position—with the supply and demand for workers being roughly in balance—such that it is no longer a source of inflationary pressure in the economy. I will continue to watch incoming data carefully and remain attuned to signs of undesirable further cooling in the labor market. Economic Output and Productivity GrowthAlong with generally solid labor market data and moderating inflation, recent indicators show economic activity moving along at a strong pace. Real gross domestic product (GDP) increased at a 2.8 percent annual rate in the third quarter, consistent with the solid growth recorded in the first half of the year. American consumers remain resilient, with broad-based gains in household spending on both goods and services. This supports broader economic growth because consumer spending constitutes roughly two-thirds of GDP. Spending at retailers and restaurants rose 2.8 percent in October from a year earlier, a faster 12-month rate of increase than the prior two months. Recent data revisions show that household income and savings have been higher than previously thought, improving the outlook for consumer spending and GDP growth. It is remarkable that the U.S. economy has been growing rapidly even as inflation has been declining significantly over the past two years. One reason why this solid growth could be occurring is that potential growth, or the maximum rate at which an economy can grow without causing inflation over the medium term, may have increased. One factor that appears to have supported both potential and actual growth is a faster pace of productivity gains. Recent data indicate labor productivity has grown at a 1.8 percent annual rate since the end of 2019, surpassing its 1.5 percent growth rate over the previous 12 years. Several forces could have boosted productivity in recent years. As I discussed in a recent speech in South Carolina, the U.S. experienced a surge in new business formation since the start of the pandemic.4 These newer firms are more likely to innovate and adopt new technologies and business processes, thus boosting productivity. Two other factors boosting productivity relate in part to changes in the U.S. economy during and after the pandemic. Worker reallocation across jobs and locations surged early in the pandemic and remained high for some time. There is some research suggesting that such reallocation resulted in better and more productive matches between some workers and jobs, thus raising labor productivity.5 At the same time, severe labor shortages during the post-pandemic recovery spurred many businesses to invest in labor-saving technologies and to restructure aspects of production more efficiently, which may also have given at least a one-time boost to productivity. More broadly, the continued sizable investment in new technologies may promote ongoing strength in productivity growth. Much of this investment has gone toward artificial intelligence (AI), which has the potential to transform many aspects of the economy and job market, as I discussed in speeches earlier this fall.6,7 International ComparisonsCompared with productivity abroad, recent U.S. productivity growth looks quite exceptional. As shown in figure 1, before the pandemic, the U.S. had faster productivity growth—as shown by the green portion of the bars—than other advanced economies, but the difference was small. Since the pandemic, however, U.S. productivity growth has far exceeded that of Europe, Canada, and Australia, as shown in figure 2. To explain this notable outperformance, some have highlighted our country's relatively flexible labor market and greater business dynamism compared with these other economies.8 Moreover, to the extent that investment in technology has been a driver of cross-country differences, it is notable that private investment in AI has been much higher in the U.S. than abroad.9 This productivity outperformance is likely a main reason why U.S. GDP growth has been stronger than that of foreign economies; the path of inflation, however, has largely been similar across the globe. As shown in figure 3, inflation in the U.S. and abroad rose sharply in 2021 and 2022, amid supply bottlenecks and a post-pandemic recovery in demand. Inflation reached a higher peak in European economies that were most directly affected by the energy price shock from Russia's war in Ukraine. Inflation has since declined globally as supply normalized and monetary policy tightening restrained demand. U.S. inflation, as shown by the black line, is nearly back to its 2 percent target level, while core inflation, as shown in figure 4, has come down but remains somewhat above 2 percent. Monetary PolicyAs I stated, the totality of the data suggests that a disinflationary trajectory is still in place and that the labor market is gradually cooling. As such, I view the risks to achieving the Federal Reserve's dual mandate of maximum employment and price stability as being roughly in balance. Consistent with those balanced risks, in my view, it likely will be appropriate to move the policy rate toward a more neutral stance over time. My colleagues on the Federal Open Market Committee and I acted earlier this month to lower the target range for the federal funds rate by 1/4 percentage point. That action came after we reduced the rate by 1/2 percentage point in September. Together, these moves were a strong step toward removing policy restriction. Going forward, I still see the direction of the appropriate policy rate path to be downward, but the magnitude and timing of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks. I do not view policy as being on a preset course, and I am ready to respond to a changing outlook. In fact, I find it helpful to consider a range of scenarios when thinking about the path of policy. If the labor market and inflation continue to progress in line with my forecast, it could well be appropriate to lower the level of policy restriction over time until we near the neutral rate of interest, or the point when monetary policy is neither stimulating nor restricting economic growth. However, if inflation progress slows and the labor market remains solid, I could see a scenario where we pause along the downward path. Alternatively, should the labor market weaken in a substantial way, it could be appropriate to ease policy more quickly. My policy decisions will be guided by our dual mandate of maximum employment and stable prices, and I know delivering on those goals will produce the best economic outcomes for all Americans. Thank you for having me here today. I look forward to your questions. 1. The views expressed here are my own and not necessarily those of my colleagues on the Federal Open Market Committee. Return to text 2. See Lara Loewenstein, Jason Meyer, and Randal J. Verbrugge (2024), "New-Tenant Rent Passthrough and the Future of Rent Inflation," Economic Commentary 2024-17 (Cleveland: Federal Reserve Bank of Cleveland, October). Return to text 3. See Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, and State Financial Regulators (2024), "Federal and State Financial Regulatory Agencies Issue Interagency Statement on Supervisory Practices regarding Financial Institutions Affected by Hurricane Helene," joint press release. See also Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Florida Office of Financial Regulation, National Credit Union Administration, and Office of the Comptroller of the Currency (2024), "Federal and State Financial Regulatory Agencies Issue Interagency Statement on Supervisory Practices regarding Financial Institutions Affected by Hurricane Milton," joint press release. Return to text 4. Lisa D. Cook (2024), "Entrepreneurs, Innovation, and Participation," speech delivered at the 2024 Women for Women Summit, Charleston, S.C., October 10. Return to text 5. See David Autor, Arindrajit Dube, and Annie McGrew (2023), "The Unexpected Compression: Competition at Work in the Low Wage Labor Market," NBER Working Paper Series 31010 (Cambridge, Mass.: National Bureau of Economic Research, March; revised May 2024). Return to text 6. See Lisa D. Cook, "Artificial Intelligence, Big Data, and the Path Ahead for Productivity," speech delivered at "Technology-Enabled Disruption: Implications of AI, Big Data, and Remote Work," a conference organized by the Federal Reserve Banks of Atlanta, Boston, and Richmond, Atlanta, Georgia, held in Atlanta, Ga., October 1. Return to text 7. See Lisa D. Cook, "What Will Artificial Intelligence Mean for America's Workers?" speech delivered at The Ohio State University, Columbus, Ohio, September 26. Return to text 8. See François de Soyres, Joaquin Garcia-Cabo Herrero, Nils Goernemann, Sharon Jeon, Grace Lofstrom, and Dylan Moore (2024), "Why is the U.S. GDP Recovering Faster than other Advanced Economies?" FEDS Notes (Washington: Board of Governors of the Federal Reserve System, May 17). Return to text 9. See Chirag Chopra, Ankit Kasare, and Piyush Gupta (2024), "How Venture Capital is Investing in AI in the Top Five Global Economies—and Shaping the AI Ecosystem," World Economic Forum, May 24. Return to text

Unanimously reaffirms expectation to implement Basel III in full, consistently and as soon as possible. Finalises guidelines for strengthening banks' counterparty credit risk management. Progresses work to strengthen supervisory effectiveness following the 2023 banking turmoil. The Basel Committee on Banking Supervision met in Basel on 19–20 November 2024 to take stock of recent market developments and risks to the global banking system, and to discuss a range of policy and supervisory initiatives. Implementation of Basel III Committee members unanimously reaffirmed their expectation of implementing all aspects of the Basel III framework in full, consistently and as soon as possible. Such a commitment was also recently reiterated by G20 Finance Ministers and Central Bank Governors. As part of its Regulatory Consistency Assessment Programme, the Committee reviewed and approved the assessment reports on the implementation of the Net Stable Funding Ratio and large exposures framework by Korea. The reports will be published next month. Non-bank financial intermediation The Committee discussed banks' interconnections with non-bank financial intermediation (NBFI). NBFI continues to grow and evolve in ways that could present risks and vulnerabilities to the global banking system. Banks are connected to NBFI through a wide range of direct and indirect activities and services. Data gaps hinder the effective measurement and management of risks to banks from their NBFI interconnections. Banks and supervisors must continue to be vigilant to these risks and to better gauge the range and materiality of interconnections. The Committee reviewed the comments received to its consultation on guidelines for counterparty credit risk management. Building on the feedback received, it approved a final set of guidelines that seek to address weaknesses in banks' counterparty credit risk management exposed in recent episodes of NBFI distress. The finalised guidelines will be published next month. 2023 banking turmoil The Committee discussed its work to develop a suite of practical tools to support supervisors in their day-to-day work as part of its efforts to strengthen supervisory effectiveness in light of the lessons learned from last year's banking turmoil. This work covers the supervision of liquidity risk and interest rate risk in the banking book, the assessment of the sustainability of banks' business models, and the importance of effective supervisory judgment. An update on this work will be published in early 2025. Macroprudential policy The Committee took stock of the range of practices adopted by jurisdictions that set a positive rate for the Basel III countercyclical capital buffer when risks are judged to be neither subdued nor elevated. As previously noted, the Committee supports and sees benefits in the ability of authorities to set such a positive "cycle-neutral" rate. To that end, it agreed to publish a report on existing practices to support jurisdictions that wish to apply positive cycle-neutral rates. The report will be published next month. Members also discussed the comments received to the Committee's consultation on measures to address "window-dressing" behaviour by some banks in the context of the framework for global systemically important banks. Work on addressing such behaviour will continue in 2025. Climate-related financial risks The Committee continued to review its proposed Pillar 3 disclosure framework for climate-related financial risks. It anticipates the finalisation of this work in the first half of 2025.

Effective December 1, 2024, pending filing with the SEC, the MIAX Options Exchange, MIAX Pearl Options Exchange, MIAX Emerald Options Exchange, and MIAX Sapphire Options Exchange will implement the below fee structure for accessing the Firm Test Bed. A reminder is also provided below concerning certain fee waivers for the MIAX Sapphire Options Exchange. All Options Markets - Firm Test Bed Fee Structure The Firm Test Bed is a virtual trading system environment accessible via different methods to test software and code releases. Access via Virtual Private Network (VPN):  $0 per connection per month (no change) Access via Dedicated Cross Connection:  $1,000 per connection per month for either 1Gb or 10Gb connections A single VPN or dedicated cross connection provides Members and Non-Members access to the Firm Test Bed for each of the MIAX affiliated options exchange Access to the Firm Test Bed via existing production 1Gb or 10Gb ULL connections will be phased out by February 28, 2025. Details regarding the Firm Test Beds (FTB1 and FTB2) migration can be found in the September 12, 2024 Alert. MIAX Sapphire Options Exchange – Waiver Period Reminder The Production Connectivity Waiver Period will shift to a 50% discount for Connectivity Fees on December 1, 2024 per the August 8, 2024 Alert. Monthly Production Connectivity Fees were waived from August 12, 2024 to November 30, 2024 (partial month plus 3 full months) Primary/Secondary Facility 1Gb ULL $1,400 per connection, Disaster Recovery 1Gb ULL $550 per connection, and Disaster Recovery 10Gb ULL $2,750 per connection were waived entirely Primary/Secondary Facility 10Gb ULL $13,500 per connection for the first two (2) connection ports on each switch were waived, and any subsequent ports on each switch were charged the full rate of $13,500 Monthly Production Connectivity Fees will be discounted by 50% from December 1, 2024 to February 28, 2025 (3 additional full months) Primary/Secondary Facility 1Gb ULL $700 per connection, Disaster Recovery 1Gb ULL $275 per connection, and Disaster Recovery 10Gb ULL $1,375 per connection after 50% discount Primary/Secondary Facility 10Gb ULL $6,750 per connection for the first two (2) connection ports on each switch after 50% discount, and any subsequent ports on each switch will be charged the full rate of $13,500 The Production Connectivity Waiver Period will expire on February 28, 2025 Under the Initial Waiver Period, other Non-Transactional fees such as Permit, Ports, Market Data, and Report fees will continue to be waived until February 28, 2025

Introduction Distinguished guests, members of the Reit Association of Singapore, and fellow colleagues. Thank you for having me yet again. In all my past REITAS engagements, I have always tried to keep the topic current. One year, I spoke about Reits becoming less Singapore centric and looking more toward overseas assets. In another year, I talked about higher interest rates and their impact on Reits’ leverage levels. This year will be no different. I intend to touch on another hot button topic: namely internalisation.  The shift towards internalisation 1.    Indeed, not to talk about internalisation would be to ignore the elephant in the room.  I know my audience today includes many external Reit managers who are watching this development very closely. My remarks will approach the subject with you in mind. 2.    Traditionally, Singapore-listed Reits, or S-Reits, have been managed by external managers owned by sponsors. Sponsors like this model because they can recycle capital, retain control over the properties, and earn recurring income through management fees. Unitholders are willing to accept this model because, in return, sponsors can provide a pipeline of properties for the Reit to acquire and help secure better financing terms. And indeed, many of our Reits have grown tremendously over the past 20 years because of our sponsors’ efforts.  3.     Nevertheless, like all things, the external manger model isn’t perfect. It has given rise to a number of questions including: alignment of interest of the unitholders and managers in terms of the fees paid, whether they be in units or cash,  how fees should be structured: namely, whether fees should be based on distribution per unit or net property income, and concern that managers may be entering into M&A deals to benefit their sponsors or simply to earn more fees.  4.    These issues have been around for a while. The option of internalisation has also been there since Day One. So why are we only seeing internalisation efforts now? I believe 3 factors account for this trend: 5.    The first is the recent emphasis on enhancing shareholder value or in the case of Reits, unitholder value, that has been gaining momentum particularly in this region. We ourselves have recognised this demand, which is why our recent regulatory emphasis has been on what we call value focus initiatives to facilitate enhancing shareholder value. Unitholders want to see more value from their sponsors and managers, in return for the fees they are paying.  6.    Second is the rise in interest rates prior to the most recent months. Higher rates as you well know, make financing conditions difficult. Unitholders become more sensitive to costs. They then start to question whether external managers and sponsors are adding enough value to justify their costs. 7.    Unitholders are more ready to remove external managers if they feel the value added does not outweigh the management fees. Indeed, internalisation allows unitholders to have greater control over the manager in addition to potentially saving on fees. This shift reflects a broader desire for more direct oversight and accountability which I will elaborate on later. 8.    Third, REITs are much bigger now. As I mentioned earlier, the conventional thinking in the past was that external managers and sponsors add a lot of value by providing a pipeline of properties and securing better financing terms. Today, what I am hearing from unitholders of big Reits is: “Our Reit is now so big. Maybe we no longer need to depend on the sponsor for properties and can secure good financing terms on our own.”  Internalisation as one form of market discipline 9.     So, what are the implications for our externally managed Reits? Again, I can see 3 trends that are shaping the situation. 10.   First, in general as a stock market matures, investors develop stronger views, are more willing to voice these views and put them to a vote. This trend is unlikely to go away. Indeed, this is the level of market discipline every mature market needs so we as regulators, very much want to encourage this. We believe more active investors and effective market discipline will encourage our Reits to improve their operational performance and returns to unitholders. 11.   In the same way that we have seen shareholders of listed companies requisition for meetings to put through the changes that they want, Reit unitholders may see the internalisation process as an opportunity to express their views and hold external manager accountable. Simply put, internalisation is but one form of market discipline for unitholders to keep Reit managers on their toes and ensure they create value. 12.   Second, unlike companies, it is the sponsors who appoint all the directors to the boards of external Reit managers. I understand for a small number of Reits, the directors of their REIT managers are put up for confirmation by the unitholders. Some Reits like Parkway Life, Keppel DC, and Starhill Global subject their REIT manager directors to unitholders’ endorsement.  But for the others, the fact that unitholders have no control over the directors of the external Reit managers may have led to unintended consequences. It may be that when unitholders want change, they feel they have little or no say over the board of the REIT manager. This may perhaps have led them to choose the nuclear option of removing the REIT manager altogether. By this I mean that when unitholders are unhappy, they are short of intermediate options and have no choice but to push the red button. In the case of a REIT, it means unitholders may turn to internalisation because there is no other way available to them to express their displeasure. 13.    Third, we as regulators want to encourage and actively enable market discipline. Earlier I drew a parallel between internalization by unitholders, and shareholders of a company requisitioning a meeting to remove the board of directors. This is market discipline at work, which is why we proposed in April to make it easier for shareholders and unitholders to call for general meetings to bring about the changes they feel are important.  14.     People tend to think of market discipline as a negative thing, in terms of investors punishing the share price of a company because they disagree with what the company is doing. It is important to remember that market discipline cuts both ways. If investors are happy with what the Reit is doing, then the market should reward the Reit by increasing the share price. We as regulators also want to facilitate this upside of market discipline. That is why we have fine-tuned our surveillance system to reduce our trading queries when there is a movement in share price. This will allow Reits that enhance unitholder value to fully reap the benefits of their efforts and to fully enjoy the upside of market discipline through an unfettered increase in share price. Internalisation vs External Managers: What’s SGX RegCo’s position? 15.    Where then do we at SGX RegCo stand on internalisation versus external management? 16.    Our view is that whether a Reit should internalise or have an external manager, is a decision for unitholders. As a regulator, our guiding principle is that once unitholders have decided one way or the other, we will support the process. If the requisite number of unitholders have decided in favour of internalisation, then let us get on with it. We will not allow internalisation to be blocked using backdoor methods. 17.     Now, internalisation is a new development here, and we have yet to see the process happen end to end. I must admit it has been a learning journey for us as regulators as well and we are always open to hearing how we can make the process smoother and faster. We have already learnt that trust deeds may not have been written with internalisation in mind. One suggestion has been to have only one voting exercise whereby unitholders can vote at a single EGM on all the changes that need to be made at one go. Another idea is to ensure unitholders are well-informed of what the entire internalisation exercise may entail before they vote. While we hear this and are committed to improving the process, this is not something we can do alone. We will need to work with our fellow regulators to improve the process. Conclusion 18.    What then should external managers do in the face of internalisation becoming a possibility in the S-Reit sector? It follows that if internalisation is one form of market discipline, then perhaps keeping unitholders happy would be the one way to respond. So, here’s what I think external managers can consider if they do want their unitholders to be happy: 19.    First, as I mentioned at the start of my speech, there are questions about fee structure and whether there is alignment of interest with unitholders. External managers may wish to consider these issues and how to communicate clearly to unitholders their thinking and how they are ensuring that their interests are aligned. 20.    Second, sponsors may also wish to consider giving unitholders some intermediate options to express their views. Unitholder engagement is a good start. Indeed, I am heartened by the efforts of some Reit managers that are facing macroeconomic headwinds to engage their unitholders. Another way may be to give shareholders a say in the appointment of directors. We already do have Reits for example, that give unitholders a confirmatory vote on the appointment of directors to the Reit manager.  21.    Finally, and most importantly, is for sponsors to signal very clearly their commitment to create value for unitholders. One lesson we can learn from this is that sponsors should avoid having Reits with overlapping mandates or anything at all that may lead unitholders to question their commitment to the Reit or to one Reit over another. In this regard, I am again heartened to see recent articles in the local media highlighting how our Reits have been active in their portfolio management activities to pursue growth.  22.    On that note, thank you for your attention. I wish you a fruitful day of discussions and learning.

Experts highlight that a listing on BME Growth is an ideal option for financing small and medium-sized Latin American companies looking to grow in Europe The benchmark event for investment between Europe and Latin America highlights the fact that the region has become the fourth largest direct investor in Spain The second day of the Forum, which brought together more than 400 attendees, also focused on renewable energy and the role of technology in driving the region forward The 26th edition of the Latibex Forum ended today at the Palacio de la Bolsa de Madrid. During the two-day event, 250 meetings were held between more than 40 companies from Latin America and Spain and 60 investors, 33% of which were international (most of them from Great Britain, France and Switzerland). In total, the event was attended by more than 400 people. One of the main themes of this year's edition of the benchmark event for investment between Europe and Latin America is the growth of Ibero-American investment in Spain. In fact, today's event highlighted the fact that in 2023 the region became the fourth largest direct investor in Spain, behind only the United States, the United Kingdom and France, and ahead of European countries such as Germany and Italy, according to a recent ICEX report. ‘We are very satisfied with the outcome of this 26th edition of the Latibex Forum. The event has once again provided highly valued meetings for both companies and investors, at a particularly crucial time for the region. This year has highlighted the important link between both sides of the Atlantic and the decisive role that stock markets can play in channelling Latin American investors into Europe, with Spain as a natural entry point’, explained Jesús González, Managing Director of Latibex, BME Growth and BME Scaleup. The second session of the Forum featured three panels. The panel on the role of Ibero-American companies in investment in Spain was divided into two parts. Firstly, the debate on direct investment was moderated by Adrián Blanco (ICEX) and included interventions by José María Jiménez (Clarel, recently acquired by the Colombian Trinity Group) and Manuel Balmaseda (Cunef). All three spoke about how the cultural links between Spain and Latin America make Spain the natural entry point for companies from that region into Europe. O Among the data they shared, it is worth highlighting that one out of every ten euros invested in Spain from abroad comes from the region, there are 20 Latin American countries investing in Spain and their main sectors are digitalisation, financial services and food. The section on sources of financing, moderated by Juan Aguayo (Cuatrecasas), included presentations by Jesús González, Managing Director of BME Growth, Christian Struve (Fracttal), and Mirari Barrena (Armanext). The experts stressed that financial markets are a source of financing compatible with other sources, as demonstrated by the more than 7,000 million euros in more than 500 capital increases carried out by BME Growth companies since the birth of this market. The panellists agreed that more and more small and medium-sized Latin American companies planning to expand their business in Europe want to access the financial markets on this side of the Atlantic. They also highlighted that growth markets such as BME Growth or BME Scaleup are ideal options for them because of their requirements tailored to the needs of small and medium-sized companies, the infrastructure offered by BME, its more than two decades of relationship with the Latin American markets, its competitive costs, the reputation of being a listed company and legal certainty.  A panel on renewable energies was also held to analyse the challenges and prospects of the sector in the region. Renato Rocha (Neonergia), José Olivé (Cox) and Álvaro Vilasante (Grupo Energía Bogotá) spoke, moderated by Víctor Peiró (GVC Gaesco). The panel discussed, among other issues, the development of the green transition in the region, the importance of water management, the growing liberalisation of the energy sector in Brazil and the growth opportunities for companies in the sector in other countries such as Colombia, Chile and Peru. Finally, to conclude the second day and close the Latibex Forum, Justo Hidalgo (Adigital) moderated the panel ‘Strategic Technologies (AI, cloud, cybersecurity) for the development of the region’ with the participation of Antonio Arancibia (Movizzon) and Alfredo Cebrián (Cuatroochenta). Among other issues, the three discussed the need for a developed strategic technology sector to foster economic growth in the region, with a special focus on cybersecurity.  Santander and Cuatrecasas are the main sponsors of the Forum and Morningstar, CFA Society Spain, ICEX and WTV. will be sponsors. Instituto BME, Atribus and the Spanish Institute of Analysts will be collaborators.

The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has today published a Consultation Paper (CP) on the conditions of the Active Account Requirement (AAR) following the review of the European Market Infrastructure Regulation (EMIR 3). The amending Regulation introduces a new requirement for EU counterparties active in certain derivatives to hold an operational and representative active account at a Central Counterparty (CCP) authorised to offer services and activities in the European Union (EU).   ESMA is seeking stakeholder input on several key aspects of the AAR, including the:   three operational conditions to ensure that the clearing account is effectively active and functional, including stress-testing;  representativeness obligation for the most active counterparties; and  reporting requirements to assess their compliance with the AAR  Next steps ESMA will consider the feedback received to this consultation by 27 January 2025 and aims to submit the final draft RTS to the European Commission within 6 months following the entry into force of EMIR 3.   ESMA will organise a public hearing on 20 January 2025.

ICM.com, a global leader in fintech, has secured a new regulatory license from the Financial Services Authority (FSA) in Seychelles, marking a significant milestone in its global growth strategy. With this addition, ICM.com is now regulated in seven jurisdictions, including the FCA in the United Kingdom, FSRA in Abu Dhabi (UAE), FSC in Mauritius, FSA in South Africa, ARIF in Switzerland and more. Obtaining regulations within one of the leading brokerage hubs is a huge triumph for us. Seychelles is emerging as an attractive destination for brokerages due to its strategic location between Africa, Asia, and the Middle East. This recognition not only attests to the competence and quality of our team but also places ICM.com on par in the brokerage industry, thus enabling us to further develop our product suite and provide top-tier trading solutions and services globally. Shoaib Abedi, CEO of ICM.com, expressed enthusiasm about the new license in Seychelles, "The newly added FSA license represents a significant milestone for the company, paving the way for our expansion into new regions and supporting our ongoing growth in Latin America and Southeast Asia. Our clients can rest assured they are partnering with one of the most regulated and innovative fintech firms in the industry." In addition to the newly acquired license, ICM.com has been actively expanding its global footprint across Latin America, Africa, and India. Earlier this year, we also formed a strategic partnership with Swisspod Technologies, a Swiss-American leader in Hyperloop technology, supported by visionaries like Elon Musk and Richard Branson. This collaboration reflects our shared commitment to fostering innovation and sustainability, paving the way for ground breaking advancements that contribute to a better tomorrow. Looking ahead, ICM.com remains dedicated to providing clients with the necessary tools and resources for success in financial markets. The company plans to expand its product offerings and invest in advanced AI technology, ensuring that our customers gain an added advantage in the market.  For more details, visit ICM.com.

Rimes, a leading provider of EDMaaS (enterprise data management-as-a-service) and investment platform solutions to the global investment community, is pleased to announce the appointment of Neal Naidoo as Head of Investment Platform Solutions. With over 20 years of experience in financial engineering, quantitative analytics, and data science, Naidoo will lead the development of Rimes’ next-generation Matrix Investment Management Platform globally, driving innovation and growth. He will work closely with Rimes’ Client Strategy, AI and Enterprise Data Management (EDM) teams to deliver holistic, scalable solutions that meet clients’ evolving needs and industry standards.  Neal Naidoo, Head of Investment Platform Solutions said: “I am excited to join an innovative, forward-thinking team dedicated to solving complex financial and technological challenges and driving change that empowers our clients to better support their customers’ evolving needs. Asset owners and managers are under increasing regulatory pressure and face a challenging macro environment in which to generate stable returns for their investors. My goal is to partner with our clients and help them meet the demands of a rapidly changing market environment with tools that streamline data-driven decision-making, enhance operational efficiency, and support long-term asset performance.” Justin Brickwood, Chief Product Officer, concluded: “The Matrix Platform is one of the cornerstones of our solutions portfolio, and I am delighted to welcome Neal to the team. His extensive expertise in data management and commercial strategy will be invaluable as we expand our product offerings, ensuring they stay aligned with evolving client needs and regulatory requirements.” With Naidoo’s appointment, Rimes reinforces its commitment to leadership in investment data and technology solutions. His expertise and leadership will play a critical role in delivering the innovation and client-focused services that Rimes clients worldwide have come to expect.

Yesterday evening, we celebrated the 12th edition of the European Small and Mid-Cap Awards, organised by the Federation of European Securities Exchanges (FESE), EuropeanIssuers and the European Commission’s Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs during the SME Assembly in Budapest (Hungary). The Awards highlighted excellent SMEs from across the EU that have accessed capital markets via an Initial Public Offering (IPO) in the preceding two calendar years. They displayed the diversity of European markets and aimed to promote stock listings on EU public markets, in particular targeting SMEs and growth companies. Click here for full details.

Nasdaq (Nasdaq: NDAQ) congratulates Gubra (Nasdaq Copenhagen: GUBRA) being selected as ’Star of Innovation’ in the annual  European Small and Mid-Cap Awards 2024 announced at the European Commission’s annual SME Assembly in Budapest, Hungary, last night. The Awards showcase the resilience and innovation of small and mid-cap companies across the European Union and recognize their contributions to the region’s economic growth. The Awards has been organized for twelve consecutive years, is a joint initiative of EuropeanIssuers, the Federation of European Securities Exchanges (FESE), and the European Commission. Each year, the most dynamic small and mid-cap companies are nominated for four separate categories which include Rising Star, International Star, Star of Innovation, and Star of 2024. An independent, expert jury selects a shortlist of three companies per category selected from the SMEs. Since 2020, the Awards is organised as part of the European Commission's SME Assembly. This year’s winners have gone public in the period 2022-23. ”I am pleased to congratulate Gubra as the winner of ’Star of Innovation’ which places innovation at the center of its strategy for business development,” said Adam Kostyál, SVP and Head of European Listings, Nasdaq. "Over the past decade, Nasdaq European Markets has become the top listings hub for small- and medium-sized companies. The success of Gubra exemplify one of the achievements emerging from our European markets." “Gubra has achieved remarkable success since its IPO less than two years ago,” says Carsten Borring, Head of Listings at Nasdaq Copenhagen. Gubra focuses on pre-clinical contract research services and peptide-based drug discovery in the fields of metabolic and fibrotic diseases. “We extend our congratulations to Henrik Blou, CEO of Gubra, and his team for this impressive accomplishment. Nasdaq European Markets stands as the premier hub for biotech companies in Europe, particularly in Denmark. We take immense pride in having another successful Danish biotech company listed on our exchange.” In addition to Gubra, Yubico was shortlisted in the finals as ’Star of Innovation’ and Rusta as ’International Star’.

First fund launched by BNPP AM in partnership with International Woodland Company (‘IWC’) Fund aims to shape the commercial forests of tomorrow BNP Paribas Asset Management (‘BNPP AM’) today announced the launch of the BNP Paribas Future Forest Fund (‘FFF’ or ‘the Fund’). The fund is classified Article 9 under SFDR[1] and will invest in sustainable forestry to generate financial returns to investors and combine sustainable investment practices to combat climate change, improve asset resilience, and enhance biodiversity. The fund is the first launched by BNPP AM in partnership with natural capital expert IWC. IWC is a global natural capital specialist, majority owned by BNPP AM and headquartered in Copenhagen, with over 30 years’ experience in providing investment management and advisory services within sustainable forest investments, agriculture investments, and ecosystems restoration. Aligning Environmental and Financial Goals Sustainable forestry investments are an opportunity for investors who are seeking to align environmental and social benefits with financial objectives. Indeed, forestry investments can play a significant role in investment portfolios, as they can deliver attractive long-term risk-adjusted returns, stable annual income, diversification benefits due to low correlation with other asset classes, and inflation-hedging properties. In addition, sustainable forestry is key in fighting climate change as trees are instrumental in removing and storing carbon and can safeguard and improve terrestrial biodiversity while offering protection against deforestation. Grounded in a controlled risk investment approach, via core timberland investments in developed geographies (US, Oceania, Europe), the BNP Paribas Future Forest Fund has a strong ESG[2] framework guiding the production of sustainable timber. The Fund will only invest in FSC (Forest Stewardship Council) certified or certifiable forests and serve its investors with plug-in data for their greenhouse gas accounting targets and EU, or other regulatory, reporting needs. The Fund targets a size of USD 500 million (USD 750 million hard cap) and has had a first closing of USD 130 million in November. The target portfolio will consist of 8 to 12 assets in the US (South, Northeast, and Pacific Northwest), Australia, New Zealand, and Europe. Meeting the Rising Demand for Sustainable Timber The Fund addresses key macroeconomic trends indicating a growing demand for timber. Over the last 60 years, global demand for wood products has doubled and the United Nations Food and Agriculture Organisation (FAO) forecasts that wood demand will increase by another 37 to 60 per cent between 2020 and 2050. The sustained increase in demand for timber products is arising from several mega-trends, including population growth, urbanisation, increase in per capita income, and a green transition. Otto Reventlow, CEO of IWC: “The BNP Paribas Future Forest Fund represents a significant step forward to bring sustainable forestry investment into the mainstream and recognises timberland as a compelling investment proposition. With this fund, we ensure that our focus on commercial viability is balanced with a strong commitment to protect and enhance biodiversity and climate resilience. We are proud to collaborate with BNP Paribas Asset Management to create a fund that aligns financial objectives with the urgent need for environmental stewardship.” David Vaillant, Global Head of Finance, Strategy and Participations at BNPP AM and Chairman of IWC: “We are very pleased to partner with IWC and leverage their deep expertise in natural capital, ensuring that we make a meaningful impact in the world of sustainable forestry. The Future Forest Fund illustrates the common vision we have with IWC to actively contribute to the environmental transition. This new fund will enable us to answer our clients' growing interest in this new asset class as we widen our breadth of natural capital solutions.” Maxence Foucault, Senior ESG Specialist, private markets at BNPP AM: "At BNP Paribas Asset Management, we are committed to pioneering investment solutions that address the challenges of climate change and biodiversity loss. The BNP Paribas Future Forest Fund is a prime example of how investors can align environmental benefits with financial targets." Footnotes ^[1] Sustainable Finance Distribution Regulation ^[2] Environmental, Social and Governance 

The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, today held its 63rd General Assembly, this year hosted by Bursa Malaysia in Kuala Lumpur. Seven Directors of the Board were elected for a three year term, who are as follows: Gilson Finkelsztain, CEO, B3 Korkmaz Ergun, CEO, Borsa Istanbul Carlson Tong, Chairman, Hong Kong Exchanges & Clearing (HKEX) Julie Becker, CEO, Luxembourg Stock Exchange Ed Knight, Executive Vice Chairman, Nasdaq Ashishkumar Chauhan, Managing Director & CEO, National Stock Exchange of India Ltd Khalid Al Hussan, CEO, Saudi Tadawul Group (STG) The WFE Board comprises 18 exchange industry leaders from around the world: Loh Boon Chye, CEO, Singapore Exchange Group, Chair of The WFE Jos Dijsselhof, CEO, SIX Group, Vice Chair of The WFE John McKenzie, CEO, TMX Group, Chair of the WFE Working Committee Gilson Finkelsztain, CEO, B3 Greg Wojciechowski, President and CEO, Bermuda Stock Exchange Korkmaz Ergun, CEO, Borsa Istanbul Fredric J. Tomczyk, CEO, Cboe Global Markets Kendal Vroman, Chief Transformation Officer, CME Group Thomas Book, Member of the Executive Board, Deutsche Börse AG Carlson Tong, Chairman, Hong Kong Exchanges & Clearing (HKEX) Hiromi Yamaji, Group CEO, Japan Exchange Group Leila Fourie, Group CEO, Johannesburg Stock Exchange Eun-Bo Jeong, Chairman and CEO, Korea Exchange  Julie Becker, CEO, Luxembourg Stock Exchange Ed Knight, Executive Vice Chairman, Nasdaq Ashishkumar Chauhan, Managing Director & CEO, National Stock Exchange of India Ltd Khalid Al Hussan, CEO, Saudi Tadawul Group (STG) QIU Yong, Chairman, Shanghai Stock Exchange (SSE) Loh Boon Chye, WFE Chairman, said: “On behalf of the WFE Board of Directors, I extend a warm welcome to our new Board members as we work with Nandini’s team to advance WFE’s mission to foster a transparent, collaborative and innovative ecosystem for global financial markets. Their input will be invaluable to the success of WFE’s priorities around governance, clearing, ESG, education and new technologies, and we look forward to their active contribution.”Nandini Sukumar, CEO at the WFE, said: “The WFE welcomes the new members of the Board. Their deep experience and knowledge of the sector will be a great benefit to us as we continue to advance the development of fair, transparent, stable and efficient markets. We thank those who have served, and continue to serve the industry.” 

Key points Driving better retirement outcomes and member services is a strategic priority for ASIC. Ensuring accountability of superannuation trustees will be a significant focus for us over the next year. We have written to the CEOs of every APRA-regulated superannuation trustee, urging industry leaders to act now to improve their oversight of death benefits. We are concerned the metrics being used to track death claims handling and processing are too sparse to drive accountability. We have also reminded senior executives that they will become accountable persons under the Financial Accountability Regime from next March, which will be an important step in helping us ensure there is top-down accountability in superannuation funds. Good morning. Before I begin, I’d like to acknowledge the Traditional Owners of the land on which we meet today, the Gadigal people of the Eora nation, and pay my respects to Elders past and present. I would also like to congratulate ASFA on another successful annual conference, and on your longstanding leadership in lifting retirement outcomes for Australians. Today marks one year since I commenced my five-year term as an ASIC Commissioner. It feels significant to open my anniversary here with you today because so many of my conversations over the past year – with APRA, industry, and customers and consumers – have been about ensuring Australians can plan for and participate in their retirement with confidence. We welcome today’s announcement from the Treasurer as a continuation of those conversations and look forward to stepping up our focus on superannuation, retirement income, and retirement expenses. Confident and informed participation in the economy is our goal at ASIC. We want superannuation to deliver for Australians at every age and at every stage. You need to help your members build their wealth whilst they work and service them as customers so they can confidently enjoy it, right through retirement. In the age of ageing, this is no small challenge. There are six million Australians currently at or above superannuation preservation age and we expect a retirement wave of another three million to join them in the next decade[1]. Many of these Australians have contributed to super over their entire working lives but rarely interacted further with their fund until a lifechanging moment – such as leaving the workforce, ill health, or the loss of a loved one. It’s why I often refer to them not as members but as customers – because in these moments, they expect a certain level of customer service from you. But despite being able to forecast the demands of this wave a generation in advance, our superannuation system appears to be struggling under the weight of these expectations. And it is certain that the waves will continue. In recent research conducted for ASIC, we found that less than half of Australians trust superannuation funds to do the right thing by their members. The remainder were either neutral or explicitly didn’t trust their funds. This is a big problem when we’re thinking about confident and informed participation. For this reason, driving better retirement outcomes and member services is a strategic priority for ASIC. The two are inextricably linked – you can’t have good retirement outcomes without good member services. And providing good member services can come down to three really simple principles: being transparent, being accountable, and meeting the fair expectations of your members consistently. I want to focus in particular on the second of these principles today, because ensuring accountability of superannuation trustees is a significant focus for ASIC over the coming days, weeks, and months. Death benefits Last week, we commenced proceedings against United Super – the trustee for Cbus – for unreasonable delays in processing claims for total permanent disability (TPD) and death benefits. We allege this systemic failure impacted more than 10,000 members and claimants at their most vulnerable time, with many claims taking more than 12 months to resolve. Following this action, today I am calling on every superannuation industry leader to improve their oversight of death benefits, as a matter of urgency. Yesterday, I wrote to the CEOs of every APRA-regulated superannuation trustee outlining significant concerns about the way some trustees are tracking processing times for death benefit claims and managing their processes. These concerns have come out of our surveillance on death benefit claims handling, on which we will publish a full report early next year. We’re writing to CEOs about this now though because some gaps need action now. This is too important to wait. In particular, we are concerned that metrics are tracked too sparsely overall to drive accountability for these important outcomes; also, that the metrics trustees are using to track death benefit claims don’t capture this process end-to-end, and don’t reflect the real experiences of people out there dealing with loss. We’re talking about husbands and wives, brothers and sisters, parents and children, who need a way forward after the worst day of their lives. From their perspective, the clock starts the moment they contact you about the loss of their loved one and stops when the claim is paid. Yet for whatever reason, some trustees are starting the clock when a package of documents is sent or when all completed applications are received. Metrics like this do not reflect the fair expectations of your members and their families – and don’t help boards make good decisions either. Customer-centric metrics are an opportunity to understand where your processes are falling down and how you can fix them. For example, how will you know if grieving family members can’t meet your documentation requirements if you only track how long it takes you to make a final decision? In their eyes, it doesn’t matter how quickly this decision is made if it takes 18 months to gather all the right paperwork. Some trustees have invested time and resources into improvements in the area. Others we looked at in our member services surveillance however were actually surprised when we presented them their own data on end-to-end claims handling. This is the wrong reaction. Accountability means owning actions and outcomes. It means admitting when you have fallen short and taking steps to measure up. You can’t measure up without data and metrics to measure. It is our obligation to do all we can to enforce the law when boards of trustees do not meet theirs. This remains the case even when service delivery arrangements are outsourced. Indeed, circumstances may mean metrics and measurement are even more important when third parties undertake operations on your behalf. However you arrange your service delivery, you are always accountable from trustee director through to your end member. Today I would also like to remind you that from next March, senior executives will become accountable persons under the Financial Accountability Regime. That means that leaders will personally be on the hook for certain responsibilities within their remit. Clearly, you cannot outsource your FAR accountability, so if you accept those accountabilities make sure you have the tools of responsibility – including the necessary information – to meet them. This will be a significant step in ensuring there is top-down accountability to members in superannuation funds. Private markets and best financial interest duty In lifting accountability – and transparency – across the superannuation sector, I am pleased that ASIC and APRA have a complementary role and are very much aligned. We share regulatory responsibility for private assets in superannuation. With ASIC’s current focus on driving consistency and transparency in private market investments, we have an ongoing dialogue about APRA’s work around valuations of unlisted assets held by superannuation funds. Currently, APRA-regulated superannuation funds allocate around 20% of their portfolios, on average, to private assets. Some funds have announced plans to pull back from this space, but many say they intend to allocate more in future. It is not for ASIC to lead the discussion on investment allocation. It is for ASIC to expect that as their exposure to private markets grows, funds stay focused on their obligations – both to members, and to the market as such significant participants in that market. That includes ensuring that they are acting in the best financial interests of members, that they adhere to all laws and standards of market conduct and integrity, that their investments, whether held directly or through fund managers, are valued appropriately, and that risk is clearly disclosed and communicated to members. I want to congratulate APRA on their inaugural publication of fund level data on expenditure. This is an important transparency measure that will help ensure trustees are meeting the expectations of members in every dollar they spend. We will shortly embark on a complementary piece of work: a financial reporting and audit surveillance of superannuation funds. This is the first financial year that financial reports of superannuation funds were lodged with ASIC, and we plan to ensure that there is a high standard of reporting, to build confidence and trust. Conclusion Ultimately, you can’t have good retirement outcomes without good member services – and you can’t have good member services without accountability, transparency, and consistency in the way you meet the expectations of your members – your customers. We will continue to do our job to ensure trustees measure up to their responsibility to do theirs. As I look ahead to my second year with ASIC, I can see that 2025 is going to be another significant one in our superannuation work, and in our job in the superannuation system. But we don’t want you to wait until then to act – we need you to start improving the systems and processes in your job today. Thank you. [1] National, state and territory population, September 2023 | Australian Bureau of Statistics

Good morning, and welcome to FIA Expo.It’s wonderful to be back here in Chicago—the epicenter of our industry—for what promises to be a fascinating two days of discussions. Truthfully, it’s also nice to escape the bedlam inside the Washington beltway for a few days.With the elections behind us, I’m longing for less shouting, fewer political text messages and hopefully, more common sense. And some honesty, as well. Because if you can’t come to grips with the truth, you can’t come together to solve problems and heal wounds.Growth must begin with a reality check. Our industry deserves that too.This fall has been an amazing time for me, personally.My college football team—the Indiana Hoosiers—are undefeated for the first time ever under new head coach Curt Cignetti. And my adopted professional football team, the Washington Commanders—are having a surprisingly good season behind “Hail Mary, Full of Grace” quarterback Jayden Daniels. (sorry Caleb!)These two developments have literally changed my mood for the better. I get up whistling in the morning. I smile more. I now have a skip in my step. It’s changed my demeanor from grouchy to almost tolerable. Now, there are many reasons for the success of my two football programs. But I believe the top reasons are the coaches—and their willingness to be truth tellers and be honest with their players.You can’t begin to win until you have laid bare the reality of where you are as an organization. Only then can you start to build up.  For example, Commanders’ head coach Dan Quinn has instituted "Tell the Truth Mondays." During these meetings, he encourages his team to be honest and accountable for what went right – and what went wrong – on Game Day. Coach Quinn has created a safe space to allow coaches and players to tell the truth and course correct for the betterment of the team. This is creating a culture of growth and winning.That idea really resonated with me. It got me thinking about our industry and how we might benefit from a frank analysis of how we’re doing.So, let’s have our own Tell the Truth Day and recognize what we do well and identify where we need to improve.First off, what are we doing right?Tell the Truth Fact Number 1: The global growth story of our industry is real.FIA data shows global trading volume of futures and options continues to increase. We expect to notch another record year in 2024, marking seven straight years of record activity. And on this theme of honesty, we should point out that much of that growth comes from retail trading, and specifically India. We are also seeing retail growth in US equity options and futures, crypto products and prediction markets.The retail story is worth keeping an eye on.But retail isn't the whole growth story. Here in the US, we see record levels of trading activity in Treasury futures and options, in both volume and open interest. This growth is fueled by recent inflation and economic volatility in the markets, and the need of market participants to hedge the associated risks.While volumes typically get the headlines, it’s the open interest chart that’s more interesting to me. Because it shows the long-term hedging and commercial interest in this market, which hit a record high in August.This is a sign of a healthy market.Turning to the global energy complex, we have also seen strong growth in futures and options across products from crude oil to natural gas to electricity. This growth extends to alternatives like wind and solar. And it’s not surprising.  With the geo-political conflicts in the Middle East and Ukraine, and the long arc of the energy transition, I expect the energy complex to continue to be a part of our industry’s expansion.This diverse growth story is worth crowing about on Tell the Truth Day.Which brings me to Tell the Truth Fact Number Two: This industry’s growth is fueled by innovation, and we must nurture this environment of risk-taking. Innovation has been part of our DNA since the inception of our markets, and we must never take it for granted.Just look around this conference. For a decade now, Expo has been home to our Innovators Pavillion, where we feature creative start-ups that bring new ideas and technologies to our markets. Past innovators have used this platform as a springboard to raise millions in capital and operationalize their businesses. This year is no exception to this risk-taking spirit.I encourage you to visit the trade show floor to meet the 10 amazing companies showcasing their services that modernize our industry.But as we look to the future, we must also recognize the pioneers and visionaries who built our markets. These are the people who have democratized the derivatives markets through electronic trading, new products and exchanges, and increased access to global markets. Look no further than this year’s distinguished class of the FIA Hall of Fame, which we announced last week.We will celebrate these six leaders at the 50th Boca conference next March. And they are worthy of our appreciation today, for the vision and achievement they have brought and continue to bring to our markets.  This innovative spirit must be nurtured through policies that promote competition and risk-taking. We need smart regulation that is fit for purpose, and we need policies that incentivize new entrants to come into our space.This leads me to Tell the Truth Fact Number 3: Competition is heating up, but more is needed.  When I started in this industry nearly 30 years ago, there were more than 100 FCMs. Today, there are 50. Back then, there were 20 exchanges registered with the CFTC. Today there are 16. And among those 16, only four have meaningful volume.On Tell the Truth Tuesday, we must admit that our markets would benefit from more competition.Competition sharpens our animal spirits. It encourages innovation and lower costs. And choice is good for consumers. That said, we are starting to see some signs that competition is heating up.One area is interest rate futures. New exchanges have embarked on a campaign to compete in the US interest rate futures market. So far, volumes have remained low, but this competition has spurred the animal spirits in the fixed income marketplace for the first time in over a decade. This competition in the treasury markets is further driven by the SEC’s treasury and repo clearing mandate, which currently takes effect in 2025 and 2026. We now have three clearinghouses that will compete in treasury clearing as these markets move towards a “futures-style” client clearing model. Whoever can build the clearing model that best optimizes the collateral and bank capital for market participants may be the big winner. This competition is good for the marketplace, and it's fascinating to watch.Another area ripe with competition is event markets. These markets date back to my time at the CFTC, when the Iowa Political Markets first started an exchange to predict election results. Recent court rulings have clarified the legal uncertainty around these markets, allowing several prediction markets to move forward with scale before this past election. And boy did they.While listening to my Commanders football game on the radio before the election, I heard no less than three commercials for Robinhood promoting their event contracts on the Presidential election. Others must have been listening too … as Robinhood surpassed 200 million contracts traded in the week leading up to the election.It's astounding that this activity exceeds the number of people who actually voted in the Presidential election – and that these markets were more accurate than traditional polls. I’m still digesting what these markets mean for the traditional regulatory environment, but the wisdom of crowds appears to have worked in this instance. On Tell the Truth Tuesday, it’s exciting to see that competition in our industry is heating up, and we welcome this trend.  But in life, too much of a good thing can sometimes lead to unintended consequences. And that’s why the laws that govern our markets require fair competition and responsible innovation.Unfettered competition and innovation could jeopardize the integrity of the markets and put customers at risk.  Which brings me to the final Tell the Truth fact of the day: The laws and regulations of our industry must keep pace with our evolving market structure.Traditionally, the regulation of the futures markets has been by functional activity.Public exchanges that bring together buyers and sellers are regulated to protect the fairness of the marketplace. Clearinghouses, with their obligations to protect the financial integrity of the system, have strict financial protections and safeguards to avoid contagion risk. And clearing members, who serve as agents for their clients, are charged to protect these customers and their funds.Increasingly, however, we are seeing more exchanges embedding all of these functions within one legal structure.But as the Good Book says, “No one can serve two masters.”FIA has strong concerns that consolidating these functions could undo the independent checks and balances of our markets and, ultimately, put customers at risk. We strongly encourage the current CFTC and the incoming Administration to propose strong rules that govern the inherent conflicts from these arrangements.So, I’ll leave you with these final thoughts on Tell the Truth Tuesday. As we approach Thanksgiving, I’m reminded that our industry is a big, messy and sometimes loud family. Maybe like many of yours.We work hard and we play hard. We have a lot of diverse views, and we don’t have all the answers. At the same time, we’re trying to bring the right people together to have an honest, frank discussion to reach the best conclusions for our industry.Together, and only together, will we continue our industry’s impressive track record of resiliency and innovation. And that’s what this week is about. So, as we kick off Expo, I hope you will learn new things, meet interesting people and engage with your colleagues with an honest and open mindset.If we can do that, the sky is the limit for our markets.

Chairman McHenry, Ranking Member Waters, and other members of the Committee, thank you for the opportunity to testify on the Federal Reserve's supervisory and regulatory activities. Accompanying my testimony is the Federal Reserve's semiannual Supervision and Regulation Report. Today, I will discuss current conditions in the banking sector, and our recent supervisory and regulatory activities. Banking ConditionsOverall, the banking system remains sound and resilient. Banks continue to report capital and liquidity ratios above minimum regulatory levels, and asset quality generally remains sound. Bank lending has continued to grow, albeit at a modest pace that reflects decreased demand and tighter lending standards than we have seen since early last year. Capital ratios have increased this year, building on the capital increases from the year before and leaving the system better positioned to weather potential losses. This is supported by this year's stress test results, which showed that large banks have sufficient capital to meet their minimum capital ratios and continue their operations under a highly stressful scenario. Liquidity conditions overall are stable. Notably, deposits and liquid assets on bank balance sheets remained steady in the first half of the year. Additionally, the share of uninsured deposits in the system continued to decline, falling to a level last seen in 2019. While the system as a whole is resilient, we are carefully monitoring the continued rise in delinquency rates among certain commercial real estate loans—such as those backed by offices, especially in major cities, and, more recently, those backed by multifamily housing. Delinquency rates for certain consumer loans are also elevated. In response to rising delinquencies, banks have increased loan loss provisions. Cybersecurity risk also continues to be a supervisory priority. The Federal Reserve's supervisory activities in this area promote financial institutions' ability to protect against cyber incidents, safeguard critical infrastructure, and address emerging technology risks. SupervisionFederal Reserve supervisors continue to work diligently to assess all bank risk-management practices to be prepared for both expected and unexpected stresses. We continue to make progress on improving the speed, force, and agility of supervision to align better with the risks, size, and complexity of supervised banks, as appropriate. This is necessary to ensure that banks and supervisors are managing the types of risks highlighted by last year's stress in the banking system. Supervisors must be prepared to take timely action as risks build up; deploy supervisory tools and escalation effectively; account for changes in market, economic, and financial conditions in their examination priorities and supervisory conclusions; and identify new and different patterns of risks. We have made progress on these goals. First, we are working to ensure that supervision intensifies at the right pace as a bank grows in size and complexity. Second, we are modifying supervisory processes so that once issues are identified, they are addressed more quickly by both banks and supervisors. Third, we are finding ways to better incorporate forward-looking risk analysis into supervision. RegulationMoving to regulation, as you know, last summer, the Board sought comment on two proposed rules that would modify risk-based capital requirements for large banks: the Basel III Endgame proposal and the proposal to adjust the capital surcharge for the largest and most complex banks. We asked for and received a great number of comments on all aspects of the proposals and, earlier this year, I laid out potential adjustments to these proposals based on those comments. Last year, the bank regulatory agencies also invited comment on a proposal to require large banks to issue and maintain a minimum amount of long-term debt. We received feedback from commenters on potential adjustments to the proposal, which are under consideration. And, as I have mentioned in previous speeches, we have been considering ways to improve liquidity resilience and improve banks' ability to respond to funding shocks. These initiatives have been joint efforts among the Federal Reserve, FDIC, and OCC, and we look forward to that continued collaboration next year. We will continue to seek an approach that helps to ensure financial system resilience and supports the flow of credit to households and businesses through the economic cycle. Thank you. I am happy to take your questions.

The attached option class will begin trading on the MIAX Options Exchange, the MIAX Pearl Options Exchange, the MIAX Emerald Options Exchange, and the MIAX Sapphire Options Exchange on Wednesday, November 20, 2024.Market Makers can use the Member Firm Portal (MFP) to manage their option class assignments.  All LMM and RMM Option Class Assignments must be entered prior to 6:00 PM ET on the business day immediately preceding the effective date.  All changes made after 6:00 PM ET on a given day will be effective two trading days later.MIAX Options and MIAX Emerald Options Primary Lead Market Maker (PLMM) assignments and un-assignments will not be supported via the MFP. Please contact MIAX Listings with any questions at Listings@miaxglobal.com or (609) 897-7308. MIAX Options® Exchange - New Listings Effective for November 20, 2024 MIAX Emerald® Options Exchange - New Listings Effective for November 20, 2024 MIAX Pearl® Options Exchange - New Listings Effective for November 20, 2024 MIAX Sapphire™ Options Exchange - New Listings Effective for November 20, 2024

Fiserv, Inc. (NYSE: FI), a leading global provider of payments and financial services technology, and ADP® (Nasdaq: ADP), a leading global technology company providing human capital management (HCM) solutions, today announced a strategic partnership that brings together Fiserv’s preeminent small business solutions, including Clover® and CashFlow CentralSM, with the industry-leading small business payroll and HR solution, RUN Powered by ADP®. With Fiserv research finding that 87 percent of small business owners are interested in one easy-to-use business management system, ADP and Fiserv have a unique opportunity to deliver a robust solution that combines a premier set of capabilities across payroll, cash management, and payments to meet the critical operational needs of small business owners. Through this partnership, ADP and Fiserv will offer U.S.-based small businesses access to an integrated, all-in-one solution combining the full power of RUN Powered by ADP and the Clover small business management platform. In addition, CashFlow Central, an integrated accounts payables and receivables management platform, will be available to RUN and Clover clients, enabling small business owners to manage their cash flow more efficiently and, more importantly, allowing them to focus on what matters most, their business. “This strategic partnership with ADP furthers our commitment to building out an integrated solution that meets the unique needs of today’s small business owner,” said Frank Bisignano, Chairman, President and Chief Executive Officer of Fiserv. “The addition of ADP’s payroll services technically integrated into Clover will make it easier than ever for small businesses to manage the flow of money in and out of their business, whether they are selling to customers, paying bills, or managing payroll.” “The powerful combination of two trusted, industry leaders advances our ability to serve the millions of small businesses that drive the U.S economy,” said Maria Black, president and CEO of ADP. “Helping businesses thrive has been our mission since day one, and we’re working to simplify the way small businesses manage their workforce through exceptional payroll and HR solutions backed by great service. We remain dedicated to supporting, celebrating, and investing in small businesses, helping them to further their impact in their communities.” Fiserv and ADP will start working together this quarter with services to be rolled out in early 2025.

Please be advised the MIAX Options Exchange, MIAX Pearl Options Exchange, MIAX Emerald Options Exchange, MIAX Sapphire Options Exchange and MIAX Pearl Equities Exchange will be closed on Thursday, November 28, 2024 in observance of the Thanksgiving Holiday.  On Friday, November 29, 2024, the MIAX Exchanges will have an abbreviated trading session. All Option Classes and Equity Issues will close 3 hours early. If you have any questions, please contact Trading Operations at TradingOperations@miaxglobal.com  or (609) 897-7302.

Good afternoon.  I’d like to start by thanking our panelists today for sharing their perspectives and engaging in an important and insightful discussion.  On the U.S. Government side, each of you is a close partner, and I appreciate the tremendous effort you put into carrying out our national security mission.  I also see many members of the CFIUS bar, the business community, as well as compliance professionals.  Thank you for your collaboration in the CFIUS process as well – you have an important role to play in supporting our work.   At this conference last year, I spoke about the Committee’s compliance and enforcement work as well as our enhancements to transaction reviews and efficiencies; we also discussed mitigation agreement monitoring, third-party processes, non-notified transactions, and planned regulatory updates.  Today, I want to highlight the progress made in furtherance of those priorities, and some of the work that lies ahead.   In addition to handling hundreds of cases and ongoing monitoring responsibilities, we have made important regulatory updates, as previewed last year.  We have also redoubled our efforts on enforcement, now levying eight civil monetary penalties in the past two years, four times more in that period than in the Committee’s history.   In addition, fulfilling our mandate in the Foreign Investment Risk Review Modernization Act of 2018, or FIRRMA, to regularly consult and meet with allies and partners, we have also been active across the globe in sharing best practices regarding robust investment screening, the importance of timely reviews, and how to promote open investment consistent with the protection of national security.  We certainly can and must do both.  Our work and the status of the United States as the world’s top destination for foreign direct investment highlights that this balance is possible.  In the past two years alone, CFIUS has cleared hundreds of transactions with a collective value of nearly $500 billion.   Our national security work requires depth, breadth, and resources. Over the past year, we have continued to strengthen our analytical and operational capabilities.  We have done this by building and implementing sophisticated tools, platforms, and methodologies for assessing and addressing national security risks. We employ cutting-edge information technology platforms to securely manage and facilitate novel aspects of CFIUS’s work.  We have expanded and deepened our human capital and today have a team with widely diverse backgrounds, from lawyers to science Ph.D.s to intelligence professionals to bankers to compliance professionals and former prosecutors. And across the Committee, we benefit from a much broader team with incredible subject matter expertise.   I want to take a moment to recognize the hard work of the career public servants who carry out the work of CFIUS.  In addition to Treasury’s role as chair of CFIUS, there are eight other agency political appointees who lead this work across the Committee, but there are hundreds of career staff who do the hard work and in-depth analysis that underpins each transaction we review.  Working with this group of dedicated national security professionals has been an honor, and our national security is stronger as a result of their contributions. The work of our outstanding team, in conjunction with our ongoing technological improvements, have enabled us to be more efficient and effective as we contend with two core challenges.  First, transactions are increasingly complex.  And second, the global security landscape is constantly changing, and CFIUS is identifying and addressing more national security risks than in years past as a result, including as it relates to sensitive data and technologies.   We have also been paying particular attention to the role of limited partners in investment funds.  The reality is that not all LP arrangements are the same and it is often important for the Committee to understand the identity and role of LPs when relevant to understanding a transaction and assessing whether it poses national security risk.  We recognize that sometimes a fund sponsor, for example, may have a contractual commitment to keep confidential the identity of an LP, and to that end, I can reassure you that we have processes and procedures in place to ensure that information filed with the Committee is handled appropriately.  Indeed, the Committee strictly adheres to its statutory confidentiality obligations.  And we’ve done a lot of thinking around the issue of LP investments, benefitting from, among other things, the work of the Department of Commerce in this area.  In the same way that financial institutions are obligated to “know your customer,” I often tell businesses seeking funding they should know their investor – because CFIUS certainly will.  LP agreements, side letters, and other informal arrangements can all be potential vectors for national security risk.   On that note, I want to take a moment to recognize our colleagues in the Intelligence Community.  The Committee is a voracious consumer of the IC’s work, which gives Committee members critical information and analysis to fully understand the potential “threat” for each and every transaction that comes before CFIUS.  This is a fundamental input to our work.   I mentioned efficiency as an important part of our work – and we take that seriously.  We are working through cases faster than in years before.  In 2023, CFIUS cleared 66 percent of distinct transactions without mitigation measures in either the 30-day assessment period for a declaration or the initial 45-day review period for a notice – compared to 58 percent in 2022. In 2024, preliminary data shows this clearance rate continuing to climb ever further.   CFIUS also improved its efficiency by decreasing the frequency of withdrawn and refiled transactions from 23 percent of notices in 2022 to 18 percent of notices in 2023.  This is the first such reduction in five years, and a trend we see continuing into 2024. These changes are not incidental; instead, they reflect the focus we’ve placed on improving efficiency at every step in our process and the dedicated work of Committee staff. We have also transformed how we approach compliance with mitigation agreements.  Today, we are actively monitoring mitigation measures in approximately 240 cases.  We have expanded and devoted significant resources to monitoring, nearly doubling the size of Treasury’s team over the last several years, including hiring professionals with audit and other relevant compliance experience.   In 2023, Treasury and other agencies went on over forty site visits, both domestically and internationally, to monitored businesses. In addition to the Committee’s monitoring role, the use of third parties and internal compliance professionals is a critical piece of ensuring the protection of national security – from third party monitors and auditors to trustees to security officers and security directors, all of whom play an integral role in working with mitigated companies and the Committee to protect national security. We also remain vigilant in our enforcement of mitigation agreements, and as I mentioned earlier we’ve made tremendous advancement in this space.  In an effort to increase transparency with regard to enforcement actions, in August, we debuted an updated enforcement website that provides further information regarding how the Committee approaches compliance and enforcement.  This includes new information regarding the penalties CFIUS has levied in the past few years, including the $60 million penalty imposed for a company’s failure to take appropriate measures to prevent unauthorized access to certain sensitive data and failure to promptly report unauthorized access.  I can also share that, in the last year, CFIUS has – for the first time – utilized its subpoena authority in support of its national security mission.   As many of you know firsthand, we have continued to improve our ability to identify transactions that may pose a risk to national security and were not notified to the Committee by the parties.  The Committee leverages multiple tools and data sources – including public reporting, subscription services, tips from the public, Committee members or Congress, and classified reporting – to identify and analyze such non-notified transactions.  Treasury’s non-notified team screens thousands of transactions, ultimately putting forward those that may raise national security considerations to the Committee for consideration to request a filing.  The President’s order in May of this year prohibiting the purchase and requiring the divestment of certain real estate operated as a cryptocurrency mining by facility by MineOne initially came to the Committee’s attention through our non-notified process after we received a tip from the public.  The MineOne case also showcases the importance of our jurisdiction over real estate transactions.  CFIUS reviewed and investigated this transaction pursuant to authorities provided by Congress in FIRRMA to cover real estate transactions in close proximity to certain sensitive U.S. facilities.  We have been focused on updates to our real estate jurisdiction, working closely with the Department of Defense.  Last year, we added eight military installations to our real estate regulations and earlier this month, we issued a final rule that expands CFIUS’s ability to review certain real estate transactions by foreign persons near more than 60 military bases and installations across 30 states. This is the result of a recent comprehensive assessment conducted by the Department of Defense regarding its military installations.   And just yesterday, we issued a final rule to sharpen our investigation and enforcement tools.  Among other things, this rule expands our authority to request and subpoena information for non-notified transactions, increases the maximum monetary penalty available for certain violations, and expands the instances in which CFIUS may use its subpoena authority, including in the non-notified context.  After taking into consideration the public comments we received on the proposed rule, the final rule allows the CFIUS Staff Chairperson to impose a deadline with respect to party responses to mitigation agreement drafts not as a default, but where appropriate.  We see this as a necessary tool in certain instances.  These enhancements are drawn from lessons learned as we have increased our focus on compliance, monitoring, and enforcement over the last few years.   We also remain engaged with Congress as one of our key stakeholders. In July, I again testified before the Senate Banking Committee regarding the work of the Committee.  We regularly engage with congressional staff and members regarding potential legislation, and pursuant to our statute, from time-to-time provide case briefings on covered transactions after concluding action.  Our protection of national security does not stop at the border; indeed, our national security is linked to the security of our allies and partners.  Therefore, it is essential to U.S. national security that our allies and partners develop and maintain effective national security-focused investment screening processes.  This has been an important part of our work and in 2023 and 2024 alone, alongside the State Department, we have had hundreds of engagements with our foreign allies and partners, including an investment screening Memorandum of Intent that Treasury Secretary Yellen signed last year with her counterpart in Mexico. Over the past few years, the work we have done has contributed to the proposal, creation, or enhancement of investment screening programs in over 30 countries.   I am proud of Treasury and the Committee’s efforts in all of these areas, but I also recognize that there is more work to do.  While some of us will be departing our roles during this transition period, the incredible career staff will carry on with the same high caliber of professionalism and competence that you all have come to expect. In doing so, I fully anticipate that the Committee will remain focused on promoting and enforcing compliance with our regulations and agreements, improving our efficiency, and honing our authorities to ensure the protection of national security, all the while creating a welcoming environment for foreign investment.   Thank you again for joining us today.

Thank you very much for the opportunity to be here today, and a particular thank you to our hosts, John Williams, Fabiola Ravazzolo, and their team at the Federal Reserve Bank of New York. This conference is a timely and welcome addition to the range of engagements the New York Fed hosts. Foreign exchange markets are critical to so much economic activity, from hedging to trade financing, and they are evolving rapidly. We have come a long way from the days when spot markets were dominant, and the New York Fed has been a positive force at every step along the way.  Let me state at the outset that these are unusual circumstances in which to be giving a policy speech. I serve as Treasury’s Assistant Secretary for International Finance and was nominated for this role by President Biden. Given the results of the U.S. presidential election, I’ll be ending my service in just a couple of months’ time. But the U.S. cross-border payments agenda is an area where there is significant and broad-based agreement across the public and private sectors, and across both political parties. We need a modern system of payments, guided by strong U.S. international financial leadership. As such, the U.S. cross-border payments agenda has many elements where actions across administrations can build towards shared goals.  One of these shared goals is to improve the efficiency and safety of the infrastructure that underlies international commerce. Another is to maintain and strengthen the conditions that lead to the important global roles of the U.S. financial sector and the U.S. dollar, with the resulting benefits these bring for governance, our national security, financial stability, and the global economy. We all also aim to have high standards with respect to privacy and the enforcement of anti-money laundering and countering the financing of terrorism (AML/CFT) requirements.  We are pursuing these goals across three lines of effort. First, we are directly encouraging and participating in responsible payments innovation and experimentation. Second, we are coordinating with the private sector and foreign partners to better align legal, regulatory, and supervisory frameworks, which are the foundations of a more efficient and effective payments system. And third, we are supporting strong international standards and high-quality compliance regimes, which ensure the stability of payments and of the broader financial system.  I believe the United States must lead when it comes to cross-border payments to maximize the chances that any new systems with significant international usage reach the quality and standards we prefer when it comes to governance and support for financial stability. My comments today will review these efforts in turn, relate them to the role of the dollar, highlight some areas where we need to be cautious, and suggest some next steps for moving forward. THE PROBLEM OF CROSS-BORDER PAYMENTS Cross-border payments are essential to global business and finance. But in my experience as a policymaker, there is a widely held complaint that cross-border payments are slow, costly, unreliable, or unsafe. I have heard this from large multinational corporations and representatives of small business, in advanced economies, emerging markets, and low-income countries alike. Wholesale payments are typically the fastest and least expensive mode of payment, and over 90% of wholesale payments utilizing the SWIFT system typically reach the beneficiary bank within an hour.  However, customers experience a high degree of variation across regions.  In Africa, more than 20 percent of even wholesale payments take more than a day to reach the account of the end customer. In Asia-Pacific and the Middle East, this figure is greater than 10 percent.[1] At the retail level, too, cross-border transfers remain slow and costly. The average cost of a $200 remittance in 2024 was 6.4 percent, including roughly 2 percent for foreign exchange conversion and roughly 4 percent for service fees. In many parts of the world, 40% of remittances take more than one day to reach the beneficiary.[2] Some of this cost and delay is deliberately built into the system as a feature, not a bug. For example, some is due to batching and delayed settlement in legacy payment arrangements, which may help mitigate credit, legal, and liquidity risk. And, separately, some delay may result from faithful compliance with AML/CFT requirements, which is of course critically important. But there’s clearly room to make cross-border payments faster, cheaper, more accessible, and more transparent, without exacerbating risk or neglecting compliance. And doing so would bring great benefits. It would improve the functioning and competitiveness of a broader set of trade corridors and, with key partner countries, reinforce diversification efforts like the “friendshoring” Secretary Yellen has prescribed. It would reduce barriers for retail transfers like remittances and cross-border payments to small businesses, enabling new business models and fostering entrepreneurship. And making the dollar-oriented system faster and more efficient would strengthen our hand in upholding U.S. values like privacy and in bolstering both our national security and that of our allies.  PARTICIPATION IN RESPONSIBLE PAYMENTS INNOVATION AND EXPERIMENTATION Let me start with our efforts to foster responsible innovation and experimentation in payments technology.  The landscape is evolving, in part, from the integration of well-known tools, like application programming interfaces (APIs) and quick response (QR) codes, into existing payments infrastructure. Some innovations build on more recent technologies, like distributed ledgers, that could bring fundamental change to payment, clearing, and settlement.  Around the world, public authorities and private firms have started applying this range of innovations to their domestic payment systems. As of March 2024, 89 percent of Brazil’s population had initiated a payment through its Pix real-time payment system. Pix is free to individuals for most payments, and according to IMF data, the cost to merchants accepting a Pix payment is 85 percent less than accepting a credit card.[3] Similarly, India’s Unified Payment Interface (UPI) is credited by the World Economic Forum with reducing payment fees to Indian consumers by more than $67 billion since its inception in 2016.[4] In the United States, the private and public sectors have developed new solutions for domestic instant payments, some of which gave rise to new products that are able to reach households less likely to otherwise participate in the financial sector.[5]  U.S. policy seeks to maximize the chances that these kinds of technological innovations can also increase the safety and efficiency of cross-border payments.  As one example, the United States is directly leading, participating in, or observing various experiments or new offerings of domestic and cross-border payment solutions. In 2023, following several years of exploration, the Federal Reserve launched FedNow, an instant payment infrastructure that allows businesses and individuals to send and receive domestic payments in real time through participating depository institutions. The Fed has also proposed extending operating hours for its other payment services, the Fedwire Funds Service and National Settlement Service. Together, and in combination with private-sector efforts like The Clearing House’s RTP Network among others, these developments bring the benefits of near round-the-clock payments and improved liquidity management for domestic payments. Further, the Fed is contributing to international projects to improve cross-border payments. Together with six other central banks and over forty private sector firms, including several U.S. firms, the Fed is participating in Project Agorá, an initiative of the Bank for International Settlements to explore the integration of tokenized central bank and commercial bank money on the same platform. Last year, with the Monetary Authority of Singapore, the Fed concluded Project Cedar x Ubin+, an exploration of improvements to multi-currency wholesale cross-border payments on a bilateral and technology-neutral basis. Finally, the Treasury and other agencies are exploring the possibility of enhancing bilateral payment system connectivity with select other jurisdictions. This might be achieved in multiple ways, including interconnecting fast payment systems or supporting the participation of foreign banks in domestic payment platforms. Improving connectivity in these ways requires the United States and its partners to develop a better understanding of each other’s payments technology and protocols, to formulate and agree on a governance system, and to take care to ensure that payments integrity programs and AML/CFT compliance controls in the partner countries meet international standards.  Improvements in bilateral connectivity may not only offer economic benefits for American consumers and businesses, they may also offer the promise of greater adherence to global standards and shared national security gains. Enhancing connectivity with the U.S. system may offer significant commercial benefit for our partners, and that presents an opportunity for the United States to invite a deeper and more transparent commitment to shared policy goals, like combatting illicit finance. Of course, even though I have only highlighted public sector activity so far, the United States government recognizes that the private sector has an essential role to play in improving cross-border payments. Regulated U.S. financial institutions are at the forefront of exploring global, “always on” real-time payments, clearing, and settlement, using a variety of technologies, and we wish to create a climate that ensures these institutions can remain at the frontier. Relatedly, we believe that policymakers should preserve optionality as to what form innovation takes. Governments should avoid picking winners and losers in payments technology. Now, I should note, not all payments system experimentation is as responsible, cautious, and transparent as the efforts I just described. This is no small matter. If a poorly designed payments system were widely adopted, it would not only fail to resolve cross-border payments challenges, it could do significant harm to international financial stability and economic security. Policymakers and industry participants should take that risk seriously and be very skeptical of any project that seeks to wipe the slate clean, or avoid safeguards in the current system, or omit, elide, or avoid strong and transparent governance and oversight. One reason the United States must continue to lead on innovation and governance for cross-border payments is precisely to avoid the proliferation of opaque systems that may introduce unacceptable macro-financial, illicit finance, and operational risks into the global financial system. IMPROVING LEGAL, REGULATORY, AND SUPERVISORY FRAMEWORKS Next, I would like to share how the United States is engaging to improve legal, regulatory, and supervisory frameworks in support of responsible innovation, reduced frictions in payments, and greater competition and transparency.  Internationally, one line of U.S. effort since 2020 has been to provide intensive support for the G20’s Roadmap to Enhance Cross-border Payments. As part of this Roadmap, Treasury has been encouraging legal and regulatory changes in foreign jurisdictions, including so that more financial data, not less, can move freely across borders. Localization and other restrictions on cross-border data sharing, if implemented beyond narrow national security considerations, can restrict firms from working with the best data or compliance service providers, if those providers happen to be in a foreign country. That harms U.S. business. And, such restrictions can also become major obstacles to the highest quality risk management and most efficient cross-border payment technologies.  Domestically, Treasury and the Financial Stability Oversight Council have repeatedly recommended that Congress develop a clear regulatory framework for stablecoins, a technology often described as showing promise in facilitating cross-border transactions.[6],[7] But stablecoins are structurally vulnerable to runs, which can pose risks to consumers and investors, and to financial stability. Analogous to how, in pegged currency regimes, foreign reserves back the value of the exchange rate, most stablecoin issuers require dollar-denominated liquid assets to peg their stablecoin to the dollar. Doubts about the quality of those backing reserves, or about the redeemability of the stablecoin at par, can lead to runs on the issuer. This is not theoretical. In the last three years, we’ve seen prominent stablecoins break their peg during periods of market stress. And in 2022, we saw the complete collapse of the Terra/Luna arrangement, which had a totally inadequate mechanism for trying to stabilize the value of its token.  Last year, the Financial Stability Board published high-level recommendations for the oversight, supervision, and regulation of broadly adopted stablecoins, consistent with the key features we have advocated in a U.S. stablecoins framework.[8] Treasury has also advocated for common-sense reforms of its tools and authorities to address the increasing use of stablecoins by a variety of illicit actors, including to evade sanctions. Finally, Treasury has also called, as Under Secretary Liang did in a speech last month, for a federal payments framework.[9] The current framework for the regulation of non-bank and e-money payment service providers has requirements that vary from state to state. This raises risks for the integrity of payment systems and public trust in money. It also raises barriers to entry, limiting competition and innovation. A federal payments framework would help maintain the global leadership of U.S. financial firms.  SUPPORTING STRONG INTERNATIONAL STANDARDS AND COMPLIANCE Finally, we must navigate these technological innovations, and changing laws and regulations, without abandoning our commitment to strong international standards and compliance regimes. Standards and compliance regimes limit economic risk and help protect citizens around the world from fraud and other illicit finance threats. I’ve used the phrase “standards” several times now. But in plain English, what do I mean? Standards can specify requirements for how payments technology must work, including elements related to the underlying programming code and messaging used to send and process payment requests. Standards can set the rules to determine who is allowed to participate in a payments system and when, and what users must do to manage risk and to make sure payments can continue to flow in the face of certain threats or disruptions. Operational standards might describe who has responsibility for oversight of various parts of the system and what pieces of information must be transparent and disclosed. Standards can define precisely what it means for a payment to be settled.  Domestically, high quality, clear standards promote a safe and level playing field for firms, and invite stakeholder trust in their critical infrastructure. Internationally, standards can facilitate the spread of best practices and interoperability among systems—making it possible for the system in one country to “speak” to the system in another, both technically and legally. One example of these standards is the Principles for Financial Market Infrastructures (PFMI), which provide guidance for managing the credit, collateral, and liquidity risks of payment system participants, as well as consideration of the operational risks than arise when system upgrades are rolled out.  Another example is Financial Action Task Force (FATF) standards, which specify steps that countries should implement in order to combat money laundering, terrorist financing, and proliferation financing. They are critical in our efforts to prevent or trace financial activity involving fraudsters, drug traffickers, terrorists, and other bad actors. Currently, the United States is actively involved in the revision of FATF Recommendation 16 on payment transparency to reflect evolutions in the payments landscape over the last two decades and ensure the standard remains technologically neutral. A final example is the standards Committee on Payments and Market Infrastructures (CPMI), which recently published a harmonized international Organization for Standardization (ISO) 20022 messaging standard to reduce complications in cross-border payments created when different countries use different messaging formats. These payment system standards are typically technology neutral. They apply just as well to new systems as they do to old ones. As we enter a period when legacy and innovative payment solutions coexist, standards will facilitate interoperability, not only across jurisdictions but also between diverse technologies. And accordingly, we will continue to encourage the application of these existing standards to new systems.  But we have to remain vigilant. Innovation can often give rise to new, implicit standards, long before the appropriate standard-setting organizations have reacted or caught up to the new technology. Therefore, the United States is and should continue to be an active and vocal participant in international standard-setting processes, ensuring that the responsible institutions keep pace with change. Public authorities, including Treasury and the Federal Reserve, represent the United States in groups like the FATF and CPMI.  But we also rely on private sector firms to develop and advance standards, including those that apply internationally. For example, the American National Standards Institute, which is the U.S. member of the ISO, convenes experts across the private and public sectors, including Treasury, as well as academia. These and similar bodies are setting standards for critical and emerging technologies, and U.S. engagement is essential. Treasury also supports the good work of the IMF and World Bank to provide payment system technical assistance and capacity development. This work helps embed and put into practice high quality technical, legal, and regulatory standards around the world. In the process, it helps deliver real benefits for the functioning of many domestic and cross-border payment systems in emerging market and developing economies. Conversely, we should be wary of innovations that fail to meet international standards for safety, and soundness. For example, the United States has pressed international organizations to end any involvement with payment initiatives that are specifically designed to undermine or skirt global AML/CFT rules, sanctions, and other illicit finance controls. And we will discourage participation in payment systems that are not subject to high-quality international standards and supervision.   POSITIVE EXTERNALITIES, CURRENCY CHOICE, AND THE INTERNATIONAL ROLE OF THE DOLLAR How does all of this relate to the role of the U.S. dollar? The fact that the dollar’s global usage far exceeds the U.S. share of global economic and financial activity reflects features that are mostly unrelated to payments. It more likely stems from the fact that the dollar is supported by a transparent and reliable legal system, an independent central bank, and a government committed to sound macroeconomic policies and a freely floating currency. Dollar dominance is also likely buoyed by the global importance of U.S. capital markets, which support open, deep, and liquid trades in dollar-denominated securities.[10] That said, we do not – and must not – take for granted the benefits of the dollar system.  And we should be appropriately humble with respect to our understanding of the demand for dollar use. After all, the fall of the pound and rise of the dollar roughly 100 years ago stands among the few observed shifts from one globally dominant currency to another. That’s not a lot of data points to use to test hypotheses. So, while there is little evidence from recent history that payments technology is a driver of currency choice, we must still at least entertain the possibility that new, high-quality, and safe payments infrastructures that are based on, or compatible with, the U.S. dollar, would bolster the dollar’s important international role.  To be clear, the United States has not sought to compel anyone to use the dollar in cross-border or foreign transactions. Rather, we believe that emerging cross-border payment arrangements should preserve currency choice, including the ability to use a vehicle currency in foreign exchange transactions. All else equal, this will help reduce the overall cost of cross-currency payments. And if we succeed in keeping the U.S. public and private sectors central to payments innovations, operating within a well-designed domestic and global legal and regulatory environment, and upholding high-quality global standards and compliance regimes, the continued dominant use of the dollar strikes me as both the likely outcome and one that is in the interests of Americans as well as our allies and partners around the world.  To achieve that vision, the United States is seeking to advance payment rails innovation, implement sound regulatory frameworks internationally and at home, and promote international standards that improve safety and address illicit finance risks. We should step up our commitment to explore the potential benefits of tokenization solutions, pass strong and responsible domestic stablecoin legislation, and press international organizations to avoid supporting any payments innovations that could undermine existing, high-quality standards. And all together, these efforts can help maintain the continued primacy of the dollar and support the strength of the U.S. financial system, to the benefit of Americans and the world.  The steps I’ve outlined above speak to core U.S. values and the need for sustained U.S. public and private sector engagement. The payments landscape is evolving in ways that have far reaching implications, from natural security to economic prosperity. The future of the financial system, global markets, and the U.S. and global economies demands our continued leadership.  Thank you.  ###    [1] FSB (2024), “Annual Progress Report on Meeting the Targets for Cross-border Payments: 2024 Report on Key Performance Indicators.” [2] Word Bank (2024), “Remittance Prices Worldwide Quarterly.”  [3] IMF (2024), “Pix: Brazil’s Successful Instant Payment System,” Banco Central do Brasil (2024), “Pix Statistics.” [4] Piyush Gupta (2023), “India’s digital leap: the Unified Payment Interface’s unprecedented impact on the financial landscape,” World Economic Forum. [5]See U.S. Department of the Treasury (2024), “National Strategy for Financial Inclusion in the United States: Fostering Financial Access, Resilience, and Well-Being for All.” [6] FSOC (2022), “Report on Digital Asset Financial Stability Risk and Regulation,” President’s Working Group on Financial Markets (2021), “Report on Stablecoins.” [7] President’s Working Group on Financial Markets, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (2021), “Report on Stablecoins,” Financial Stability Oversight Council (2022), “Report on Digital Asset Financial Stability Risks and Regulation.” [8] FSB (2023), “High-level Recommendations for the Regulation, Supervision, and Oversight of Global Stablecoin Arrangements.” [9]Remarks by Under Secretary for Domestic Finance Nellie Liang “Modernizing the Regulatory Framework for Domestic Payments” at the Chicago Payments Symposium, hosted by the Federal Reserve Bank of Chicago | U.S. Department of the Treasury [10]Remarks by Chair Gary Gensler “Exorbitant Privilege: Responsibilities and Challenges” at the Council on Foreign Relations | U.S. Securities and Exchange Commission