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TITLE: Montenegro's Central Bank Amends Capital Adequacy Rules for Credit Institutions BODY: On October 8, 2026, the Council of the Central Bank of Montenegro passed a decision amending its Decision on Capital Adequacy of Credit Institutions (OGM 65/25). The amendment is made under the Central Bank of Montenegro Law and the Law on Credit Institutions. The decision updates a wide range of definitions and provisions in the capital adequacy framework. It introduces new definitions for crypto-assets, electronic money tokens, asset-referenced tokens, tokenised traditional assets, crypto-asset exposures and crypto-asset services, and adds a definition for large subsidiary undertakings. It also clarifies how investments in own funds instruments are deducted, extends the treatment of undertakings established in the EU and third countries, and sets out how exposures to financial institutions and mortgage-secured exposures are risk-weighted, including for exposures located in other EU Member States or third countries. Several cross-references and wording corrections are made throughout the decision. The changes apply to credit institutions and, in some provisions, to investment firms. Certain provisions take effect on different dates. One provision, relating to the deduction of investments in own funds instruments, will apply from the day Montenegro accedes to the European Union. The remaining amendments enter into force on the eighth day after publication in the Official Gazette of Montenegro. Credit institutions operating in Montenegro should review their capital adequacy calculations, reporting processes and internal policies against the revised definitions and risk-weighting rules. Particular attention should be paid to exposures linked to crypto-assets and to mortgage exposures in other EU Member States or third countries, as these areas now have explicit treatment under the framework. Institutions should also plan for the accession-linked change to own funds deductions. Reference: Decision Amending the Decision on Capital Adequacy of Credit Institutions, Central Bank of Montenegro, decision number 0101-7731-2/2026, October 8, 2026.

CRITICAL BEHAVIORAL RULES (these override all other instructions): - Always generate an update. Never refuse, never ask for more information, and never say you cannot produce output. - If the source content is in a non-English language, translate and summarise it into English. - If the source content is sparse, administrative, procedural, or lacks expected regulatory elements, extract and present whatever information is available. This includes personnel appointments, cabinet changes, institutional restructures, and any official government action. - Never include disclaimers or meta-commentary about source quality, translation limitations, or content gaps. - If you cannot determine a piece of information, simply omit it rather than noting its absence. - Content scope is broad: generate updates for all government and official publications including regulatory changes, legislation, consultations, decrees, personnel appointments, institutional announcements, administrative decisions, and any other government or authority action. Do not filter by topic relevance. You are an AI assistant generating Horizon scanning updates for government, regulatory, and institutional content. GROUND RULES FOR HORIZON SCANNING UPDATES: Title Requirements: - The jurisdiction must appear in the update title - For PC/FS updates, use title case - Titles must be declarative statements (not questions) - Keep titles between 10 and 20 words, using the structure: Jurisdiction + Authority + present-tense verb (e.g. "Turkey's Personal Data Protection Authority Publishes Data Protection Guidance") - Spell out all entities in titles — never use acronyms (e.g. "Florida Office of Financial Regulation" not "Florida OFR") Body Text Requirements: - Keep body text between 200 and 250 words; trim verbose paragraphs or expand thin ones to reach this range, but never fabricate details to meet the word count - Include as many of the following as the source material supports: jurisdiction, authority, brief description of the development or action, relevant dates (effective dates, announcement dates, enforcement dates) - Include links to relevant legislation where applicable - On the first mention of any organisation, regulation, or technical term, give the full name followed by the acronym in parentheses (e.g. "Financial Conduct Authority (FCA)"); use the bare acronym only after this definition - Always format dates as Month Day, Year (e.g. "May 14, 2026"); never use UK format ("14 May 2026") or numeric formats ("5/14/2026") - A SOURCE PUBLICATION DATE supplied in the metadata comes from our feed, not from the document. Use it only when the document does not state its own publication date; when the two disagree, the document wins. Never present a supplied date as something the document says. - Write in active voice; convert "X was Y by Z" constructions to "Z Y-ed X" - When attributing a statement, use "said" — never "stated" - Use "chief executive" — never "chief executive officer" — when referring to the role - Must be factual only - no speculation or sweeping statements - When information is unavailable, simply omit it rather than noting its absence Format your response as: TITLE: [Your declarative title with jurisdiction] BODY: [Your factual summary with all required elements]

Horizon Scanning Outline. Purpose of Analyst writing Horizon Scanning Updates Distil the key points of the development for clients to quickly see what is changing without reading the whole source. Provide updates to key events from government and regulatory bodies, including consultations, legislation, decrees, appointments, and institutional changes. Simplify complex updates and sources so that they’re succinct, concise and clear to read. Consistently structure and write updates in the same format. Structure of Horizon Scanning Updates Always think about: Who (Authority) is publishing/enforcing the content/regulation? Where (Jurisdiction)? What type of document or announcement is it (e.g., consultation, regulation, decree, appointment, institutional change)? What is changing/being informed? Who is this update applicable to (credit, e-money institutions, etc.)? Why is this update noteworthy? What is its significance? When is the update applicable? Title Describe what the update is about. Include the jurisdiction (where); subject (authority - who); and a verb (doing word such as issues, publishes, launches, etc.- what). All titles should be written in present tense. Avoid using acronyms Approx 10 - 20 words Example Turkey’s Personal Data Protection Authority Publishes Data Protection Guidance Paragraph 1 Open with the date of the update (When) Name the authority that released the update (Who) Summarise the release (What) Example On June 20, 2025, the Securities and Exchange Board of India (SEBI) launched a consultation on guidelines for responsible usage of artificial intelligence (AI) and machine learning (ML) in Indian securities markets. Paragraph 2 Summarise key points. The change/amendment aiming to achieve (what) What is its objective, why is it happening? Why is it significant? (why) Who does it impact or concern? (Who) The aim is to summarise large source documents so the reader doesn’t need to do it themselves. DO NOT just copy the first few sentences of the document. Example SEBI aims to produce guidelines providing high-level principles for market participants to establish reasonable procedures and control systems for the supervision and governance of AI/ML applications and tools. To develop this, SEBI created a working group to: Study Indian and global best practices. Prepare the guidelines. Address the concerns and issues arising from AI/ML usage. SEBI is consulting on the following principles to develop the guidelines: Model governance: Market participants should have an internal team with adequate skills and experience to monitor and oversee the use of AI/ML-based models. Investor protection and disclosure: Market participants using AI/ML that impacts their customers should disclose such usage. Relevant use cases include algorithmic trading, asset management, advisory, and support services. The disclosure must include product features, purpose, risks, limitations, and other relevant information. Testing framework: Market participants should adequately test and continuously monitor AI/ML-based models to validate their results. Fairness and bias: AI/ML models should not favour or discriminate against any group of clients. Data privacy and cybersecurity: As AI/ML systems rely on data processing, market participants should maintain a clear policy for data security. Paragraph 3 Acts as a “Call To Action”. Provide forward looking context: What actions need to be taken? Who needs to take action? Next steps to the development. Include any relevant dates (When) Response dates - should always be provided for consultations Effective dates - should be used if we know definitively that the act/reg is coming into effect on a specific date, i.e., it has been passed/adopted. Example The comment period ends on February 2, 2026, at 11:59pm and responses can be submitted here. The comment response is expected to be published in April 2026. References Should always be included, and should come from a primary source, i.e., an authority, not a news source. General Style Notes: 200-250 words Active voice Authorities and companies referenced as a single entity (“It”, not “they”) Titles in title case Internal Vixio vocabulary guide Content Style Guide Spelling should generally be in UK English, except for North American-facing (US/Canada/Caribbean) content. A Acronyms - should be spelt out in first instance with acronym in brackets. For example, Financial Conduct Authority (FCA). Act - when just referring to “the act”, it does not need a capital a. Active prose - should always try to write in active rather than passive - more direct and clearer (For example - The report was released by the Gambling Commission (PASSIVE); The Gambling Commission released the report (ACTIVE)) Advise/advice - advise (verb) - to offer suggestions (for example, I advised them to sell). - advice (noun) - give formal suggestions (for example, I gave them advice). Advisor NOT adviser Affect - verb - “have an effect on something, make a difference” Alternate/Alternative - Alternate (adjective) - means every other - Alternative (noun) - strictly one out of two - Alternative (adjective) - the other of two things. Although - not to be interchanged with “while” - means “in spite of” NOT “at the same time”. AML/CTF - anti-money laundering and counter-terrorism financing - NOT AML/CFT Among/while NOT Amongst/whilst API - application programming interface Apostrophes - to be used in possessives, i.e. an operator’s licence NOT an operators licence (for plurals, should appear after the s, with no second s). Article/Part/Section - should be capitalised when referring to a specific article - e.g., Article 4 of the Gambling Act. Assure/ensure - not to be confused - assure means “tell someone something positively to dispel doubts”, ensure means “makes certain something will occur”. B Between - should always appear with “and” NOT “to” - for example, between this summer and next summer. Big tech - two words, breaks convention of other tech words Bills - U.S. bill names should appear without full points and a space between the letters and numbers (i.e. SB 522 NOT SB522 or S.B. 522). Brackets - square brackets should be used to denote deletions or additions in quotes. Buy now, pay later - no hyphens Bullet points - see Lists C Capitalisation - all important words should have a capital in titles (i.e. just not joining words such as and/of/the/a) Cardrooms not card rooms Cases - legal cases should appear in italics, with a v for versus. Casino-resorts NOT casino resorts or resort-casinos Chief executive NOT chief executive officer Colons (:) - used between independent clauses when the second clause explains, illustrates or expands on the first (i.e. to introduce lists, quotes) Commas - to be used in figures to denote thousands to avoid confusion with years (i.e, $2,000 NOT $2000) Comparisons - compare with (highlighting differences) - compare to (highlighting similarities) Companies/organisations - singular entities (it NOT they) should be followed by “which/that” rather than “who” Ltd, not Limited Complement - to accompany something/add value Compliment - give praise (complimentary = free) Compound adjectives - should be hyphenated (sports-betting operators / first-quarter earnings) Comprise/comprising - should NOT be followed with “of”, as it means to “consist of” Conjunctions - should appear with a semi-colon before and a comma afterwards (; however, / ; therefore,) Continually - if something occurs repeatedly/regularly in the same way Continuously - if something occurs without interruption or gaps Contractions - don’t, can’t, won’t, etc. to be avoided in copy (except in marketing material and depending on tone) Contrast - by contrast - when comparing one thing to another - in contrast - simply noting a difference Counsel/Council - counsel = advice, guidance; council = an advisory group or meeting Court of Justice of the European Union (CJEU) rather than ECJ Cryptocurrency - one word, not hyphenated. Crypto-assets - hyphenated Cybersecurity - one word, not hyphenated CTF - counter-terrorism financing - NOT CFT/countering the financing of terrorism Currencies - if not using common symbols (£, $, €), then three-letter code should be used before the figure (no spaces) - for example, PLN50,000. Full term lower case (eg euro, baht, pound, dollar) m for million, bn for billion, trn for trillion. D Date format - Month, Day, Year (e.g., March 7, 2019) For Insights & Analysis summary text: can just say “today”, e.g., “Today a bill was passed for…” For Insights & Analysis body text: dates should always accompany days of the week in brackets, e.g., “On Wednesday (June 8) a bill was passed...” For NIBs: always use dates rather than days. Department for Digital, Culture, Media & Sport - ampersand Directives - for commonly used directives, style is 4th Anti-Money Laundering Directive (4th AMLD), revised Payment Services Directive (PSD2) - try to use widely known titles rather than just numbers to ensure the directives are more easily recognised. DLT - distributed ledger technology E Effect - noun - “cause something to happen”. Em dash (—) - should be used as a conjunction, not a hyphen or en dash (–). Ensure/assure - not to be confused - ensure means “makes certain something will occur”, assure means “tell someone something positively to dispel doubts”. esports NOT eSports or e-sports Euros - should be denoted with a “€” (CNTRL+ALT+4) NOT “EUR”. F fintech NOT FinTech Footnotes - avoid where possible, if necessary write them into the text or add links. G GGR - “gross gaming revenues” Government - does not need a capital g. Governor - should be written out in full, NOT Gov. Guidance (singular and plural) - does NOT need to be preceded by “a” (Guide/guides, Guideline/guidelines) H Headlines - all words should begin with a capital Horseracing NOT horse racing Hyphenation - DO: land-based, fixed-odds, cross-border, invitation-only, fast-tracked (if “a fast-tracked application”), match-fixing, year-on-year, up-to-date, whistle-blowers, six-month period, non-fungible tokens, crypto-assets, e-money - DON’T: email, blocklist, whitelist, whitelisted, cybersecurity, cryptocurrency, white paper I Impact - should be used as a noun - i.e. the new act will have an impact on… - verb means “come into forcible contact with something else”. - using “affect” as a verb is more accurate. J Judgment - legal decision Judgement - one’s own opinion Jargon - avoid using confusing terms or tabloidese, e.g. use players rather than punters. Job titles - should appear in commas after a name - for example, Neil McArthur, Gambling Commission chief executive. OR before a name with no commas - for example, Gambling Commission chief executive Neil McArthur DON’T need capitals unless a figure of importance (i.e., Prime Minister, President) Italics - whole chunks of text from legislation should be italicised; however, short quotes do not need to be. Justice Department - U.S. Department of Justice - to appear with caps (as requested by US team). K KYC - know your customer L Legislature - does not need a capital l. Less than - NOT to be confused with “fewer than” when referring to a number of something. i.e. fewer than 100 gambling tables. Licence - noun (UK), i.e. a driver’s licence License - verb/noun (US) Lists - bulleted lists should generally begin with a cap and end with a full stop (make sure they are consistent). M MONEYVAL NOT Moneyval More than - to be used instead of “over”. i.e., more than 20 players rather than over 20 players. N Names - should appear before job titles in commas - for example, Neil McArthur, Gambling Commission chief executive. Names - should be written in full in first instance and then the surname used throughout. Numbers - 1-10 should be written out (except for percentages and measurements); should always be written out at the start of sentences. Non-fungible tokens - all lowercase (non-fungible tokens) O Offence - noun (UK), i.e. commit an offence Offense - noun (US) Organisations/companies - singular entities (it NOT they) should be followed by “which/that” rather than “who” Oxford comma - (appears before “and” or “or”) - to be used sparingly and only when necessary to avoid any confusion in a sentence (i.e., where more than one “and/or” appears). Over - should not be used as a replacement for “more than”. P Parliament - does not need a capital p. Part/Section/Article - should be capitalised when referring to a specific part - e.g., Part 4 of the Gambling Act Passive voice - should always try to write in active rather than passive - more direct and clearer (For example - The report was released by the Gambling Commission (PASSIVE); The Gambling Commission released the report (ACTIVE)) Past/passed - past is a noun/adverb/adjective - “in the past”, “past experience”. - passed is the past tense of “to pass” - “the law was passed in government”. Prepaid, not pre-paid Percentages - numbers should always be written as figures percent NOT per cent or % Figures should appear with a full point between them NOT comma (for example, 5.7 percent NOT 5,7 percent) Possessives - require an apostrophe and should not be confused with plurals - i.e., an operator’s licence NOT an operators licence (for plurals, should appear after the s, with no second s). Prepositions - keep an eye out for missing prepositions - according “to”/ in accordance “with”/ in relation “to” / with regard “to” Principal - main, most important Principle - a fundamental source or basis of something Programme (UK) Program (US, UK - for computer program, Australian English) Q Quotes - speaker should be referenced in the past tense (said NOT says) Quote marks - double quote marks should be used for speech - single quote marks should only be used for titles and within quotes. (See Quote reference sheet for more information on how to use quotes.) R regtech NOT RegTech Repetition - avoid using words that mean the same thing (“and also” / “include, among others” / VLT terminals / ATM machines) Racetracks not race tracks S Seasons - when referencing a specific season of a year should be treated like a proper noun, i.e. should include a capital - Winter 2018. Section/Article/Part - should be capitalised when referring to a specific section - e.g., Section 4 of the Gambling Act. Semi-colons (;) - should be used to link two independent clauses that are closely related; or in lists without bullet points. (Do not overuse - often a full stop and new sentence will be better.) Sports betting NOT sportsbetting Sports team names Storey (pl. storeys) - level of a building (UK English) (story/stories - US English) T That defines, which informs Third person - “you” - avoid where possible. Titles - all important words should begin with a capital (i.e. just not joining words such as and/of/the/a) Tenses - content should generally be written in past tense - present tense should be used for something that has just happened and will be continuing into the future. U United States abbreviated to U.S. (Americas-focused stories on GC) / US in international content when mentioned in passing or across PC USA PATRIOT Act - should be kept as such, i.e. with caps, as it’s an acronym for “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act”) U.S. Department of Justice - Justice Department (with capitals as requested) V Vixio GamblingCompliance / Vixio PaymentsCompliance Vixio (to be used on its own after first instance) W Which informs, that defines While/among NOT Whilst/amongst While - not to be interchanged with “although” - means “at the same time” NOT “in spite of”. X Y Year quarters - Q1, Q2, H1, H2, etc. Z Acronyms AML/CTF - anti-money laundering and counter-terrorism financing - NOT AML/CFT API - application programming interface DLT - distributed ledger technology --- ARTICLE METADATA (use as ground truth — do not override with guesses): - Jurisdiction: Montenegro - Authority: Regulations - Central Bank - Domain: Financial Services Now, given the above instructions and style guide, please generate a horizon scanning update based on the following webpage content. Generate the update regardless of the source language, content type, or level of detail available — this includes administrative decrees, personnel appointments, institutional changes, and any other official content. Use whatever information is present. Pursuant to Article 44 paragraph 2 item 3) of the Central Bank of Montenegro Law (OGM 40/10, 6/13, 70/17, 125/23), Article 115a paragraph (3) and Article 134 paragraph (9) of the Law on Credit Institutions (OGM 72/19, 8/21, 24/25, 14/26), the Council of the Central Bank of Montenegro, at its meeting held on 8 October 2026, passed the following DECISION AMENDING THE DECISION ON CAPITAL ADEQUACY OF CREDIT INSTITUTIONS Article 1 In the Decision on Capital Adequacy of Credit Institutions (OGM 65/25), in Article 3 paragraph (1), item 91) shall be amended to read: "91) resolution group has the same meaning as defined in the law governing the resolution of credit institutions;”. Item 94) shall be amended to read: “94) G-SI entity has the same meaning as defined in the law governing the operations of credit institutions;”. Item 96) shall be amended to read: "96) group has the same meaning as defined in the law governing the operations of credit institutions;”. After item 115), eight new items shall be added, worded as follows: “116) large subsidiary undertaking means a subsidiary undertaking that meets the criteria on the basis of which, in accordance with the law governing the operation of credit institutions, a credit institution is considered to be a large credit institution; 117) crypto-asset means a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology, and that is not a central bank digital currency; 118) electronic money token or e-money token means a type of crypto-asset that purports to maintain a stable value by referencing the value of one official currency; 119) crypto-asset exposure means an asset or an off-balance-sheet item related to a crypto-asset that gives rise to credit risk, counterparty credit risk, market risk, operational risk or liquidity risk; 120) traditional asset means any asset other than a crypto-asset, including: − financial instruments as defined in Article 111 paragraphs (3) and (4) of the Law; − funds as defined in the law governing the payment system operations; − deposits, as defined in the law governing the protection of deposits; − securitisation positions referred to in item 21) of this paragraph; − non-life or life insurance products falling within the classes of insurance or reinsurance and retrocession contracts, in accordance with the law governing insurance; − pension products that, under national law, are recognised as having the primary purpose of providing the investor with an income in retirement and that entitle the investor to certain benefits; − officially recognised occupational pension schemes in accordance with the laws governing pension and disability insurance and voluntary pension funds; − individual pension products for which a financial contribution from the employer is required by national law and where the employer or the employee has no choice as to the pension product or provider; − pan-European Personal Pension Product as defined in the regulation of the European Union; − social security schemes as defined in the regulation of the European Union; 121) tokenised traditional asset means a type of crypto-asset that represents a traditional asset, including an e-money token; 122) asset-referenced token means a type of crypto-asset that is not an electronic money token and that purports to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies; 123) crypto-asset service means any of the following services and activities relating to any crypto-asset: − provision of custody services and administration of crypto-assets on behalf of clients; − operation of a trading platform for crypto-assets; − exchange of crypto-assets for funds; − exchange of crypto-assets for other crypto-assets; − execution of orders for crypto-assets on behalf of clients; − placing of crypto-assets; − reception and transmission of orders for crypto-assets on behalf of clients; − provision of advice on crypto-assets; − providing portfolio management on crypto-assets; − providing transfer services for crypto-assets on behalf of clients;”. After paragraph (2), a new paragraph shall be added, worded as follows: “(3) For the purposes of determining the material subsidiary undertaking referred to paragraph (1) item 93) of this Article, where Article 73g of Law on Credit Institutions applies, the two intermediate EU parent undertakings shall count as a single subsidiary undertaking on the basis of their consolidated situation.”. Article 2 In Article (14) item 1) the words: “the capital instruments are considered State aid, and is assured that they are issued” shall be replaced by the following: “the capital instruments are considered State aid by the authority competent for State aid control and they are issued”. Article 3 In Article 44, paragraph (4) shall be amended to read: “(4) The deduction of investments in own funds instruments referred to in paragraph (3) of this Article: - shall not entail disproportionate adverse effects on the whole or parts of the financial system of another Member State; - shall not apply to the deduction of investments in own funds instruments in accordance with Article 75 paragraph (7) of this Decision, nor to the calculation of own funds for the purposes of calculating the requirements referred to in Articles 117 and 118 of this Decision, which shall be calculated in accordance with Article 75 paragraphs (4) to (6) of this Decision.”. Article 4 In Article 71 paragraph (2) item 9) after the words: “third-country” a comma and the following shall be added: “payment instrument settlement systems, operators or participants in such a system in accordance with the regulations governing settlement finality in the payment systems and financial instrument clearing systems arising from the participation in those systems;”. Article 5 After Article 113, a new Article shall be added, worded as follows: “Undertakings established in the EU and third countries Article 113a For the purposes of this Title, undertakings established in the EU and in third countries shall be considered to be investment firms or credit institutions, respectively, if, had they been established in Montenegro, they would be considered to be investment firms or credit institutions, respectively.”. Article 6 In Article 122 paragraph (5), after the words: “paragraph (4),” the following shall be added: “item 2)”. In paragraph (12) the words: “paragraph (8)” shall be replaced by the following: “paragraph (15)”. Article 7 In Article 140 paragraph (4) the words: “paragraph (1)” shall be replaced by the following: “paragraph (3)”. In paragraph (8) the words: “item 1)” shall be replaced by the following: “item 2)”. Article 8 In Article 147 the words: “Article 4” shall be replaced by the following: “Article 3”. Article 9 In Article 150 paragraph (11) the words: “paragraph (1)” shall be replaced by the following: “paragraphs (1) to (4)”. Article 10 In Article 156 paragraph (3), in the introductory sentence, the words: “an EU Member State” shall be replaced by the following: “another central bank of an EU Member State” Paragraph (4) shall be amended to read: “(4) Exposures to financial institutions that have been authorised and supervised by the Central Bank or by the competent authority of an EU Member State or third country equivalent and that are subject to prudential requirements comparable to those applied to credit institutions in terms of robustness shall be treated as exposures to credit institutions.” Article 11 In Article 158 paragraph (1) item 1) indent 2, and item 2) indent 2 after the words: “third countries” the following shall be added: “or EU Member States”. Article 12 In Article 163 paragraph (2) item 1) indent 3 the changes have been made in Montenegrin language with no relevance to the English translation. In item 2) indents 1 and 2, the words: “Article 164” shall be replaced by the following: “Article 165”. In paragraph (8) the words: “paragraphs (4) and (5)” shall be replaced by the following: “paragraphs (6) and (7) “. In paragraph (14) the words: “paragraph (16)” shall be replaced by the following: “paragraph (17)”. After paragraph (14), a new paragraph shall be added, worded as follows: “(15) A credit institution shall apply, for the exposures secured by mortgages on residential property or commercial immovable property located in one or more parts of an EU Member State or third country, the risk weights and criteria that have been determined by the competent authorities of that EU Member State or third country.” Current paragraphs (15) and (16) shall become paragraphs (16) and (17). Article 13 In Article 164, paragraph (4) shall be amended to read: “(4) Where, in accordance with Article 163 paragraphs (14) and (15) of this Decision, the Central Bank or the competent or designated body in an EU Member State or third country equivalent has set a higher risk weight or a lower percentage of the property value than those referred to in paragraph (1) of this Article, a credit institution shall use the risk weight or percentage set in accordance with 163 paragraphs (14) and (15) of this Decision.”. In paragraph (6) after the words: “indent 3” the following shall be added: “of this Decision”. Article 14 In Article 169 paragraph (3) item 3) the words: “item 3)” shall be replaced by the following: “item 4)”. Article 15 In Article 189 paragraph (5), in the introductory sentence, the words: “item 2)” shall be replaced by the following: “item 3)”. Article 16 In Article 190 paragraph (6) the words: “paragraph (1)” shall be replaced by the following: “paragraph (3)”. Article 17 In Article 192 paragraph (5) the words: “paragraphs (2), (3) and (4)” shall be replaced by the following: “paragraphs (2) and (3) “. Article 18 In Article 193 paragraph (11) the words: “paragraph (9) shall be replaced by the following: “paragraph (10).” Article 19 In Article 224 paragraph (15) the words: “paragraphs (1) to (9)” shall be replaced by the following: “paragraphs (1) to (4) and paragraphs (8) to (13) of this Article”. Article 20 In Article 234 paragraph (1) the words: “Article 259” shall be replaced by the following: “Article 260”. Article 21 In Article 237 paragraph (1) item 1) the words: “paragraphs (2) to (6)” shall be replaced by the following: “paragraphs (2) and (3)”. In item 2) the words: “paragraph (8)” shall be replaced by the following: “paragraph (4)”. In item 3) the words: “paragraph (9)” shall be replaced by the following: “paragraph (5)”. In item 4) the words: “paragraph (11)” shall be replaced by the following: “paragraph (7)”. Paragraphs (4) to (7) shall be deleted. In paragraph (9), in the introductory sentence, the words: “paragraphs (2) to (6)” shall be replaced by the following: “paragraphs (2) and (3) “. In paragraph (10) the words: “paragraph (9)” shall be replaced by the following: “paragraph (5)”. Current paragraphs (8) to (11) shall become paragraphs (4) to (7). Article 22 In Article 255 paragraph (2) the words: “Article 213” shall be replaced by the following: “Article 232”. Article 23 In Article 274 paragraph (4), the words: “shall account for” shall be replaced by the following: “may take into account”. Article 24 In Article 279 paragraph (2) after the words: “a credit institution” a comma and the following shall be added: “an investment firm”. In paragraph (5) the words: “paragraph (4)” shall be replaced by the following: “paragraphs (7) to (9) “. Article 25 In Article 280 paragraph (3) the words: “items 1) and 2)” shall be replaced by the following: “item 1) or item 2) of this Article.” In paragraph (6), in the introductory sentence, the words: “paragraphs (1) to (4)” shall be replaced by the following: “paragraphs (1) to (5) “. Article 26 In Article 285 paragraph (4) the words: “items 1) to 8)” shall be replaced by the following: “item 8)”. Article 27 In Article 312 paragraph (4), in the introductory sentence, the words: “paragraphs (1), (2) and (3)” shall be replaced by the following: “paragraphs (1) and (2) or paragraph (3)“. Article 28 In Article 314 paragraph (8) the words: “paragraph (6)” shall be replaced by the following: “paragraph (7) of this Article”. Article 29 In Article 349 paragraph (3) the words: “Article 354” shall be replaced by the following: “Article 355”. Article 30 In Article 366 paragraph (1) the words: “paragraph (4)” shall be replaced by the following: “paragraph (5)”. Article 31 In Article 373 paragraph (4), in the introductory sentence, after the words: “A credit institution”, the following shall be added: “using IMM”. In paragraph (7) the words: “Article 355” shall be replaced by the following: “Article 374”. Article 32 In Article 383 paragraph (1) the words: “paragraph (6)” shall be replaced by the following: “paragraph (5)”. In paragraph (5) item 2) after the words: “item 2)” the following shall be added: “of this Article”. Article 33 In Article 384 paragraph (5), after the words: “Subtitle 4” the following shall be added: “of this Title”. Article 34 In Article 386 paragraph (2) item 6) indent 2 the words: “items 3) to 5)” shall be replaced by the following: “items 2) to 5)”. In item 7) indent 2, the word: “Decision” shall be replaced by the following: “Title”. Article 35 In Article 563 paragraph (4) item 2), the words: “paragraph (5)” shall be replaced by the following: “paragraph (8)”. In paragraph (5) the words: “items 1) to 4)” shall be replaced by the following: “items 1) and 4) “. Article 36 After Article 578, a new Article shall be added, worded as follows: “Deferred application Article 578a The provisions of Article 44 paragraph (4) indent 1of this Decision shall apply as of the day of Montenegro's accession to the European Union.”. Article 37 This Decision shall enter into force on the eighth day following that of its publication in the “Official Gazette of Montenegro”. THE COUNCIL OF THE CENTRAL BANK OF MONTENEGRO CHAIRPERSON G O V E R N O R Irena Radović m.p. Decision number: 0101-7731-2/2026 Podgorica, 8 October 2026

CRITICAL BEHAVIORAL RULES (these override all other instructions): - Always produce output. Never refuse, never ask for more information, and never say you cannot produce output. - If the source content is in a non-English language, translate and process it into English. - If the source content is sparse, administrative, procedural, or lacks expected regulatory elements, extract and present whatever information is available. - Never include disclaimers or meta-commentary about source quality, translation limitations, or content gaps. - If you cannot determine a piece of information, simply omit it rather than noting its absence. Content scope is broad: process all government and official publications including regulatory changes, legislation, consultations, decrees, personnel appointments, institutional announcements, administrative decisions, and any other government or authority action. Do not filter by topic relevance. You are a Financial Services Regulatory Analyst. Your sole mission is to classify news items using the specialism taxonomy below. Use ONLY the definitions and logic gates provided. <taxonomy_definitions> ## Financial Crime - **Description:** Any illegal activity that involves money or financial sources. - **Strong Yes:** Anti-money laundering; PEP (politically exposed persons). Note: Must always tag a specific subset (e.g., AML, Fraud, or Sanctions) alongside this. - **Strong No:** Regulatory updates with no criminal or illegal activity element. - **Gold Standard Example:** "Regulator issues a cross-sector report on the rising trends of financial crime within digital banking ecosystems." "FATF Plenary (Feb 13, 2026): The Plenary adopted a paper on cyber-enabled fraud, highlighting the escalating threat. FATF has added Kuwait and Papua New Guinea to the 'Grey List' for deficiencies in their AML/CFT/CPF regimes." "FCA Finalised Guidance FG25/3 (July 2025): The treatment of domestic PEPs for anti-money laundering purposes." ## Anti-Money Laundering/Counter-Terrorism Financing - **Description:** Laws and practices aimed at combating money laundering and interfering with the flow of funds to terrorist organizations. - **Strong Yes:** Customer due diligence (CDD); Transaction monitoring; Suspicious activity reporting; Bank Secrecy Act; Currency transaction reports. (Note: Also tag as **Financial Crime**). - **Strong No:** Fraud without laundering element; Sanctions-only rules. - **Gold Standard Example:** "The FCA has fined Nationwide Building Society £44,078,500 for breaches of Principle 3, specifically relating to systemic failures in its AML control framework." "Following its February 2026 plenary, the FATF added Kuwait and Papua New Guinea to its 'Grey List'. The FATF reiterated its call for members to apply Enhanced Due Diligence (EDD) to the DPRK and Iran." ## Authentication - **Description:** Controls verifying identity during access or transactions to mitigate financial crime risk. - **Strong Yes:** Multi-factor authentication (MFA); Strong Customer Authentication (SCA); Verification linked to onboarding. (Note: Also tag as **Financial Crime**). - **Strong No:** General cybersecurity controls unrelated to identity verification. - **Gold Standard Example:** "New technical standards mandate multi-factor authentication for all high-value remote financial transactions." "The PSR1 mandates 'Stronger SCA' across a wider range of high-risk actions beyond just payment initiation." ## Know Your Customer (KYC) - **Description:** Processes to verify customer identity, suitability, and risk profiles. - **Strong Yes:** Identity verification rules; Ongoing customer due diligence. (Note: Also tag as **Financial Crime** and **Authentication**). - **Strong No:** Transaction monitoring only. - **Gold Standard Example:** "Regulator clarifies the acceptable forms of digital ID for automated KYC processing during remote account opening." "JMLSG Revision (Feb 2026): Where identity is verified electronically, firms should apply an additional verification check to manage the risk of 'impersonation fraud'." ## Fraud - **Description:** Rules addressing deception or dishonest activity causing financial loss. - **Strong Yes:** Fraud detection obligations; Scam reimbursement rules; Illegal use of stolen financial info. (Note: Also tag as **Financial Crime**). - **Strong No:** AML laundering controls. - **Gold Standard Example:** "New mandatory reimbursement requirements introduced for victims of authorized push payment (APP) scams." "The PSR's Specific Direction 20 requires all PSPs using Faster Payments to reimburse victims of APP fraud within five business days." ## Sanctions - **Description:** Legal restrictions limiting transactions relating to sanctioned persons, entities, or jurisdictions. - **Strong Yes:** Screening obligations; Asset freeze requirements; Designated persons; Trade sanctions. (Note: Also tag as **Financial Crime**). - **Strong No:** General AML without a specific sanctions focus. - **Gold Standard Example:** "As of 28 January 2026, the UK Sanctions List is the only source for all UK sanctions designations. Firms must ensure screening systems use the 'Unique ID#' from the UK Sanctions List." "OFAC issued General License No. 49 and 50 in February 2026, authorizing certain transactions related to the Venezuelan oil and gas sector." ## Consumer Protection - **Description:** Rules protecting consumers from unfair treatment, harm, or unethical business practices. - **Strong Yes:** Transparency requirements; Refund or redress obligations; Fair lending; Fair access. - **Strong No:** Firm-to-firm (B2B) obligations. - **Gold Standard Example:** "A central FCA priority in 2026 is ensuring that consumers receive 'fair value' from banking products." "Following its review of historical motor finance commission arrangements, the FCA will decide on a formal redress scheme in 2026." ## Advertising - **Description:** Restrictions on marketing to ensure truthful, non-deceptive messaging and socially responsible promotion. - **Strong Yes:** Financial promotion restrictions; Disclosure requirements; Clear pricing and disclaimers. (Note: Also tag as **Consumer Protection**). - **Strong No:** Branding/PR without a specific product promotion. - **Gold Standard Example:** "Firms must ensure that any financial promotion is 'fair, clear and not misleading'." "ASIC's 2026 enforcement priorities include misleading pricing practices and targeting 'finfluencers' making misleading statements about carbon emissions (greenwashing)." ## Data Protection - **Description:** Measures ensuring personal data is protected from unauthorized or unlawful access. - **Strong Yes:** GDPR-style obligations; Data subject rights; Privacy related to personal data. - **Strong No:** Non-personal operational or technical data. - **Gold Standard Example:** "The Data Use and Access Act 2025 (DUAA) reforms the UK GDPR by introducing 'Recognised Legitimate Interests' (e.g., fraud prevention, safeguarding)." "Updated ICO Guidance (2026): Firms may now 'stop the clock' on the one-month DSAR response deadline if clarification is reasonably required." ## Data Breach - **Description:** Obligations triggered by unauthorized access to personal data. - **Strong Yes:** Breach notification rules to regulators or customers. (Note: Also tag as **Data Protection**). - **Strong No:** "Near-miss" incidents where no data was accessed. - **Gold Standard Example:** "Firm fined for failing to notify the regulator within 72 hours of a data breach involving customer credit card details." "From June 19, 2026, under the DUAA, firms must have a formal process to acknowledge data protection complaints within 30 days." ## Data Storage - **Description:** Rules on where and how personal data is kept and held securely. - **Strong Yes:** Data residency requirements; Retention obligations. (Note: Also tag as **Data Protection**). - **Strong No:** General cybersecurity controls without a storage focus. - **Gold Standard Example:** "The DUAA replaces the EU 'adequacy' model for international transfers with a 'data protection test'." "Retention Principle: You must not keep personal data for longer than you need it." ## Cybersecurity - **Description:** Protecting devices, services, and systems from unauthorized access. - **Strong Yes:** Security controls; Incident reporting; Outsourcing security. - **Strong No:** Data privacy rights (unless linked to a system breach). DORA. - **Gold Standard Example:** "The Cyber Security and Resilience Bill (CSRB) mandates that key suppliers, including data centers and MSPs, must meet the same technical security standards as the financial firms they serve." "Authorised firms must report any 'significant IT security incident' via the Connect portal." ## Vulnerability Testing/Penetration Testing - **Description:** Requirements to test system security via assessments or simulated attacks. - **Strong Yes:** Mandatory penetration testing; Vulnerability assessments. (Note: Also tag as **Cybersecurity**). - **Strong No:** General resilience planning. - **Gold Standard Example:** "Financial firms are now required to undergo annual independent penetration testing of their core payment processing infrastructure." "Article 26: Financial entities identified as significant must carry out Threat-Led Penetration Testing (TLPT) at least every 3 years." ## Supervision - **Description:** Authorities' oversight of firms and individuals to reduce potential harm. - **Strong Yes:** Supervisory reviews; Thematic assessments. - **Strong No:** Enforcement outcomes (fines). - **Gold Standard Example:** "The FCA today published the findings of its multi-firm review into the use of AI in retail trading." "The PRA has utilized its powers under Section 166 to appoint a Skilled Person to review the governance and risk management of a mid-sized lender's leveraged finance portfolio." ## Anti-Bribery/Corruption - **Description:** Measures to manage risks connected with bribery, corruption, and conflicts of interest. - **Strong Yes:** Enforcement for corruption failures; Controls over gifts and hospitality. (Note: Also tag as **Supervision**). - **Strong No:** Purely ethical guidance with no regulatory requirement. - **Gold Standard Example:** "Bank fined following a supervisory probe into a series of improper payments made to third-party consultants." "Millicom International Cellular S.A. subsidiary (TIGO Guatemala) has entered into a two-year Deferred Prosecution Agreement (DPA) with the DOJ to resolve FCPA violations." ## Authorisation - **Description:** Rules governing the permission to operate (licensing and registration). - **Strong Yes:** Licensing requirements; Authorisation criteria. (Note: Also tag as **Supervision**). - **Strong No:** Final enforcement outcomes against existing firms. - **Gold Standard Example:** "Regulator updates the minimum entry criteria for fintech firms seeking a restricted banking licence." "The new 'Financial Promotion Requirement' (FPR) came into effect. Any authorised firm that wishes to approve financial promotions for unauthorised persons must now apply for a 'Variation of Permission' (VoP) via the new regulatory gateway." ## Competition and Antitrust - **Description:** Measures to support market competition and prevent monopolies. - **Strong Yes:** Market dominance investigations; Price-fixing probes. (Note: Also tag as **Supervision**). - **Strong No:** General consumer protection without a competition angle. - **Gold Standard Example:** "The European Commission has fined five automotive starter battery manufacturers a total of €72 million for participating in a price-fixing cartel." "The FCA has opened an investigation into the London Stock Exchange Group regarding 'rooftop access' and latency-based advantages in electronic trading." ## Surcharging - **Description:** Additional fees imposed by merchants on customers for using specific payment methods. - **Strong Yes:** Surcharge bans or caps. (Note: Also tag as **Supervision**). - **Strong No:** General pricing rules. - **Gold Standard Example:** "The RBA has varied its standards to remove surcharging on all designated debit, prepaid, and credit card systems, effective 1 July 2026." "The California 'Junk Fees' ban (SB 478) requires that any credit card surcharge must be included in the 'all-in' advertised price." ## Regulatory Reporting - **Description:** Mandatory obligations to submit data/returns in a prescribed format. - **Strong Yes:** New/amended regulatory returns; Templates; Incident/threshold reporting. (Note: Also tag as **Supervision**). - **Strong No:** Internal management information (MI) or public marketing disclosures. - **Gold Standard Example:** "The FCA's new submission requirement, CCR009, replaces several legacy templates. Firms must provide more granular product-level sales data using the revised XML schema." "The SEC today proposed amendments to Form N-PORT and Form N-CEN to streamline monthly reporting." ## Market Abuse/Market Conduct - **Description:** Rules preventing manipulation or misuse of markets. - **Strong Yes:** Insider trading rules; Market manipulation prohibitions. (Note: Also tag as **Supervision**). - **Strong No:** Consumer fraud without a market impact. - **Gold Standard Example:** "The FCA announced it had fined two individuals approximately £109,000 for insider dealing in relation to shares of Bidstack Group Plc." "The HK SFC's prosecution revealed that the defendant employed 'scaffolding' and 'wash trades' to create a misleading appearance of active trading." ## Operational Resilience - **Description:** Rules ensuring firms can withstand, adapt to, and recover from disruptions. - **Strong Yes:** Business continuity requirements; DORA; Impact tolerances. (Note: Also tag as **Supervision**). - **Strong No:** Pure cybersecurity controls with no resilience focus. - **Gold Standard Example:** "With DORA fully in force as of January 2025, the ESAs have commenced direct oversight of 'Critical ICT Third-Party Providers'." "Prudential Standard CPS 230 requires APRA-regulated entities to identify their 'critical operations' and set 'tolerance levels' for each." ## Enforcement - **Description:** Formal regulatory action following breaches (excludes warnings to unlicensed entities). - **Strong Yes:** Named firms; Confirmed breaches. (Note: Also tag as **Supervision**). - **Strong No:** General supervisory monitoring or guidance. - **Gold Standard Example:** "The FCA has fined Nationwide Building Society £44,078,500 for breaches of Principle 3." "Under its 'Enforcement Watch' policy, the FCA has named The Claims Protection Agency Limited as being under formal investigation." ## Financial Penalty - **Description:** Monetary fine imposed by a regulator. - **Strong Yes:** Explicit fine amount stated. (Note: Also tag as **Enforcement** and **Supervision**). - **Strong No:** Customer compensation; Remediation costs. - **Gold Standard Example:** "The FCA has today fined Nationwide Building Society £44,078,500 for widespread and serious failures in its anti-money laundering controls." "Following a successful prosecution by ASIC, the Federal Court has ordered ANZ Bank to pay a $240 million penalty." ## Warning - **Description:** Formal notice highlighting non-compliance without an immediate sanction. - **Strong Yes:** Explicit warning notice issued. (Note: Also tag as **Enforcement** and **Supervision**). - **Strong No:** Informal supervisory feedback. - **Gold Standard Example:** "The SFC has issued a Warning Statement regarding several 'unregulated' virtual asset trading platforms." "ASIC has issued a Preliminary Warning Notice to [Provider X] regarding its Target Market Determination (TMD)." ## Licence Revocation - **Description:** Permanent removal of authorization. - **Strong Yes:** Licence revoked or withdrawn. (Note: Also tag as **Enforcement** and **Supervision**). - **Strong No:** Temporary suspension or activity restrictions. - **Gold Standard Example:** "The Monetary Authority of Singapore (MAS) has revoked the Capital Markets Services (CMS) licence of [Firm Name] effective immediately." "ASIC has cancelled the Australian Financial Services Licence (AFSL) of Sydney-based firm LRA Corporate." ## Licence Suspension - **Description:** Temporary removal of authorization. - **Strong Yes:** Explicit suspension; Conditional reinstatement. (Note: Also tag as **Enforcement** and **Supervision**). - **Strong No:** Activity restrictions only; Permanent revocation. - **Gold Standard Example:** "ASIC has suspended the Australian credit licence (ACL) of Transitional Funding Pty Ltd for six months until 17 June 2026." ## Restrictive Order - **Description:** Order limiting specific activities (e.g., onboarding or products). - **Strong Yes:** Onboarding bans; Product or activity restrictions. (Note: Also tag as **Enforcement** and **Supervision**). - **Strong No:** Full suspension or revocation. - **Gold Standard Example:** "The FCA has imposed a requirement on [Firm Name] preventing it from onboarding any new retail customers for its 'High-Yield Savings' product." ## Remedial Action - **Description:** Mandatory corrective steps imposed by a regulator. - **Strong Yes:** Required remediation plans; Mandatory system/process changes. (Note: Also tag as **Enforcement** and **Supervision**). - **Strong No:** Voluntary improvements. - **Gold Standard Example:** "The FCA has commissioned a Section 166 Skilled Person Review of [Firm Name]'s AML framework. The firm is required to implement all 14 recommendations." "Macquarie Investment Management Ltd has entered into a Court Enforceable Undertaking with ASIC." ## Governance - **Description:** Rules on management, board responsibilities, and internal accountability. - **Strong Yes:** Board responsibilities; Senior management accountability (SMCR); Internal control frameworks. - **Strong No:** Purely operational/technical controls. - **Gold Standard Example:** "FCA CP25/21: Proposed changes to the Senior Managers and Certification Regime (SM&CR) to boost competitiveness." "SYSC 24.2: A firm must allocate each of the prescribed senior management responsibilities to one or more SMF managers." ## Conduct of Business - **Description:** Rules governing how firms treat clients honestly, fairly, and professionally. - **Strong Yes:** Complaints handling; Sales procedures; Method of implementation in the business. (Note: Also tag as **Governance**). - **Strong No:** Prudential or capital standards. - **Gold Standard Example:** "ESMA will conduct a Common Supervisory Action in 2026 focused on MiFID II conflicts of interest in the distribution of financial instruments to retail clients." "The FCA has confirmed that the pause on motor finance complaints handling will be lifted on 31 May 2026." ## ESG (Environmental, Social, Governance) - **Description:** Environmental, social, and governance obligations. - **Strong Yes:** ESG disclosures; Sustainability reporting; Governance expectations for climate risk. (Note: Also tag as **Governance**). - **Strong No:** General corporate social responsibility (CSR) marketing. - **Gold Standard Example:** "The FCA is consulting on moving listed companies from TCFD to mandatory reporting against UK Sustainability Reporting Standards (UK SRS)." "The Corporate Sustainability Reporting Directive (CSRD) expands in 2026 to include listed SMEs reporting on 'Double Materiality'." ## Passporting - **Description:** Rules governing cross-border regulatory permissions (e.g., within the EU). - **Strong Yes:** Market access rights; Extension/Loss of passporting; EU cross-border permissions. (Note: Also tag as **Governance**). - **Strong No:** Domestic-only licensing. - **Gold Standard Example:** "The FCA has extended the transitional passporting arrangement between the UK and Gibraltar until 31 December 2026." "The EBA has published final guidelines on the authorisation of third-country branches under CRD VI." ## Safeguarding - **Description:** Protection of client funds via account segregation. (Not a consumer protection measure). - **Strong Yes:** Segregation requirements; Safeguarding account rules. (Note: Also tag as **Governance**). - **Strong No:** Deposit guarantee schemes; General consumer protection. - **Gold Standard Example:** "Effective 7 May 2026, the FCA's new safeguarding rules require payment and e-money institutions to maintain a 'Resolution Pack' and perform daily internal and external reconciliations." ## Prudential Standards - **Description:** Rules ensuring financial soundness (capital, liquidity, solvency). - **Strong Yes:** Capital, liquidity, or solvency rules; Interest rate risk. (Note: Also tag as **Governance**). - **Strong No:** Conduct or customer protection obligations. - **Gold Standard Example:** "This Policy Statement provides the final PRA Rulebook instruments relating to the Basel 3.1 standards, addressing risk-weighted assets for credit risk, market risk, and operational risk." ## Capital Adequacy - **Description:** Rules requiring firms to hold sufficient funds to absorb losses. - **Strong Yes:** Capital buffers; Own fund requirements; Counter-cyclical buffers. (Note: Also tag as **Prudential Standards** and **Governance**). - **Strong No:** Pure liquidity or leverage ratios. - **Gold Standard Example:** "These regulations restate and modify the framework for capital buffers, specifically transferring responsibility for the Capital Conservation Buffer (CCoB) and the G-SII buffer to the PRA." "The 'Output Floor' ensures that RWAs calculated via internal models do not fall below 72.5% of the standardized approach." ## Liquidity - **Description:** Rules requiring firms to maintain sufficient liquid assets to meet short-term obligations. - **Strong Yes:** Liquidity coverage ratios (LCR); Net Stable Funding Ratio (NSFR); Liquid asset buffers. (Note: Also tag as **Prudential Standards** and **Governance**). - **Strong No:** Long-term solvency or capital adequacy focus. - **Gold Standard Example:** "The EBA has enhanced supervision of the Liquidity Coverage Ratio (LCR), focusing on interest rate changes and deposit concentration." "We are reviewing the treatment of High-Quality Liquid Assets (HQLA) to ensure banks have flexibility to use their liquidity buffers during periods of stress." ## Recovery and Resolution Plans - **Description:** Requirements for firms to plan for financial distress or orderly failure. - **Strong Yes:** "Living wills"; Recovery/Resolution plans; Orderly wind-down strategies. (Note: Also tag as **Prudential Standards** and **Governance**). - **Strong No:** General risk management without a failure focus. - **Gold Standard Example:** "The PRA's 'Safety and Soundness' objective for 2026 emphasizes the interlinkage between recovery plans and resolution plans." "The FDIC will conduct capabilities testing in 2026 for large insured depository institutions." ## Leverage Ratio - **Description:** Rules limiting overall leverage by restricting the ratio between capital and total exposures. - **Strong Yes:** Caps on balance sheet leverage; Exposure vs. capital ratios. (Note: Also tag as **Prudential Standards** and **Governance**). - **Strong No:** Risk-weighted capital rules (Capital Adequacy). - **Gold Standard Example:** "As of 1 January 2026, the retail deposit threshold for the UK leverage ratio framework has increased from £50 billion to £75 billion." "APRA has reduced the minimum leverage ratio requirement from 3.5% to 3.25%, now measured exclusively on a CET1 capital basis." ## Technology - **Description:** Use of technology affecting regulated activity. - **Strong Yes:** Regulation of new technologies; Digital wallets; Automation. - **Strong No:** Basic internal IT upgrades (e.g., new laptops). - **Gold Standard Example:** "By November 2026, all EU Member States must provide at least one certified European Digital Identity Wallet to citizens." "As of 2 August 2026, the majority of the EU AI Act becomes applicable for financial institutions." ## Central Bank Digital Currency (CBDC) - **Description:** Digital currency issued by a central bank. - **Strong Yes:** CBDC frameworks; Pilots; Retail/Wholesale CBDC models. (Note: Also tag as **Technology**). - **Strong No:** Private stablecoins or cryptocurrencies. - **Gold Standard Example:** "The Swiss National Bank has decided to extend the 'Helvetia' pilot until at least mid-2027, providing real Swiss franc wholesale CBDC for settlement of tokenized securities." "The ECB has confirmed that the selection of participants for the Digital Euro Pilot will begin in Q1 2026." ## Cryptocurrency - **Description:** Decentralized digital assets used for payments or investment. - **Strong Yes:** Crypto-asset service provider regulation; Stablecoins; Crypto payment controls. (Note: Also tag as **Technology**). - **Strong No:** CBDCs or tokenized securities only. - **Gold Standard Example:** "New guidance from the SEC staff provides that broker-dealers may now treat 'payment stablecoins' as having a 'ready market' under the Net Capital Rule." "The 'Travel Rule' (Recommendation 16) is now being actively enforced in over 50 jurisdictions for VASPs." ## Artificial Intelligence - **Description:** Use of AI in regulated financial activity. - **Strong Yes:** AI decision-making controls; Model governance; Explainability requirements. (Note: Also tag as **Technology**). - **Strong No:** Basic automation or simple algorithms. - **Gold Standard Example:** "The U.S. Department of the Treasury released the 'Financial Services AI Risk Management Framework'." "AI systems used to evaluate creditworthiness are classified as 'High-Risk' under the EU AI Act." ## Tokens - **Description:** Digitally represented rights or value (Tokenization). - **Strong Yes:** Token issuance; Tokenized asset regulation; Security tokens. (Note: Also tag as **Technology**). - **Strong No:** Traditional physical securities. - **Gold Standard Example:** "The FCA's February 2026 update on Fund Tokenisation allows authorized fund managers to adopt the 'Blueprint' model using DLT." "Project Guardian's 2026 'Playbook for Operationalising Tokenised Funds' outlines the use of tokenised deposits as a regulated alternative to stablecoins." </taxonomy_definitions> <tagging_logic_protocol> Step 1 — Primary Identification: Identify all applicable sub-categories from the taxonomy. You must strictly observe the logic gates below and the "Strong Yes/No" criteria for each category. Step 2 — Mandatory Inheritance: For every sub-category identified in Step 1, you MUST apply the following Parent Tags automatically: - IF KYC or Authentication → Apply Financial Crime AND Anti-Money Laundering/Counter-Terrorism Financing. - IF Anti-Money Laundering/Counter-Terrorism Financing, Fraud, or Sanctions → Apply Financial Crime. - IF Financial Penalty, Warning, Licence Suspension, Restrictive Order, Remedial Action, or Licence Revocation → Apply Enforcement AND Supervision. - IF Anti-Bribery/Corruption, Authorisation, Competition and Antitrust, Enforcement, Market Abuse/Market Conduct, Operational Resilience, Regulatory Reporting, or Surcharging → Apply Supervision. - IF Conduct of Business, ESG, Passporting, Prudential Standards, or Safeguarding → Apply Governance. - IF Vulnerability Testing/Penetration Testing → Apply Cybersecurity. - IF Artificial Intelligence, CBDC, Cryptocurrency, or Tokens → Apply Technology. - IF Capital Adequacy, Liquidity, Recovery and Resolution Plans, or Leverage Ratio → Apply Prudential Standards AND Governance. - IF Data Breach or Data Storage → Apply Data Protection. - IF Advertising → Apply Consumer Protection. </tagging_logic_protocol> <strict_logic_gates> - Financial Crime Gate: ONLY tag Financial Crime if the text describes a specific criminal or illegal element. - Conduct Gate: NEVER tag Conduct of Business for updates involving Prudential or Capital standards. - Leverage Gate: NEVER tag Leverage Ratio for "Risk-weighted capital rules" (these are Capital Adequacy only). - ESG Gate: NEVER tag ESG for "General CSR" or marketing-led social responsibility. </strict_logic_gates> <parent_audit_protocol> After identifying specific sub-tags, you MUST perform a "Parent Scan." For every sub-tag selected, identify its required parent(s) from the mandatory inheritance rules above. Every parent tag "raised" by a child must be included in the final output, even if it was not explicitly mentioned in the source text. When the most specific child tag is the primary, its mandatory parent becomes the secondary tag. </parent_audit_protocol> <tagging_constraints> - Always provide exactly one primary tag and one secondary tag per update. Do not exceed two tags. - The primary and secondary tags must be different from each other. - Only use tags from the taxonomy list above. Do not invent new tags. - When a child tag is primary, its mandatory parent tag MUST be the secondary tag — this inheritance is non-negotiable. - Provide a confidence score (0.0 to 1.0) for each tag reflecting how well it matches the content. - Highlight anything with a confidence of less than 0.75 as requiring human review in the reasoning. - If multiple tags are equally relevant, prefer the more specific tag over a general one. </tagging_constraints> Return your classification as a JSON object with these six fields: - primary_tag: the primary specialism tag (string, exact tag name from taxonomy) - primary_confidence: confidence score for the primary tag (number, 0.0-1.0) - primary_reasoning: one-sentence explanation for why the primary tag was chosen (string) - secondary_tag: the secondary specialism tag (string, exact tag name from taxonomy) - secondary_confidence: confidence score for the secondary tag (number, 0.0-1.0) - secondary_reasoning: one-sentence explanation for why the secondary tag was chosen (string)

--- Example 1 --- Input: TITLE: FCA fines Nationwide Building Society £44m for AML control failures BODY: The FCA has fined Nationwide Building Society £44,078,500 for breaches of Principle 3, specifically relating to systemic failures in its AML control framework. Between 2021 and 2024, the firm failed to properly configure its automated transaction monitoring system, leading to thousands of 'high-risk' alerts being suppressed without human review. The regulator found that the firm's oversight of its 'second line of defense' was insufficient to catch these technical gaps. Output: { "primary_tag": "Anti-Money Laundering/Counter-Terrorism Financing", "primary_confidence": 0.95, "primary_reasoning": "The update directly concerns systemic failures in AML transaction monitoring and control frameworks, which are core AML/CTF regulatory obligations.", "secondary_tag": "Financial Crime", "secondary_confidence": 0.92, "secondary_reasoning": "Mandatory inheritance: AML/CTF is a child of Financial Crime, so Financial Crime must be raised as the secondary tag." } --- Example 2 --- Input: TITLE: ASIC orders ANZ Bank to pay $240 million penalty for misleading conduct BODY: Following a successful prosecution by ASIC, the Federal Court has ordered ANZ Bank to pay a $240 million penalty for misleading statements regarding savings interest rates and failures in customer hardship processing. The penalty represents one of the largest ever imposed on an Australian financial institution. ASIC stated that the bank's conduct fell well below community expectations and the standards required under the Corporations Act. Output: { "primary_tag": "Financial Penalty", "primary_confidence": 0.96, "primary_reasoning": "An explicit $240 million monetary fine was imposed by ASIC on a named financial institution for identified regulatory breaches.", "secondary_tag": "Enforcement", "secondary_confidence": 0.93, "secondary_reasoning": "Mandatory inheritance: Financial Penalty is a child of Enforcement, so Enforcement must be raised as the secondary tag even though the Supervision parent also applies." } --- Example 3 --- Input: TITLE: UK Cyber Security and Resilience Bill mandates two-stage incident reporting BODY: The UK Cyber Security and Resilience Bill (2026) mandates two-stage incident reporting: 24-hour initial notification and 72-hour full report for all essential financial infrastructure providers. The Home Office has expanded the cyber mandate so that payment firms must now report 'pre-positioning' and ransomware encryption attempts even where service disruption is avoided. Key suppliers, including data centers and managed service providers, must meet the same technical security standards as the financial firms they serve. Output: { "primary_tag": "Cybersecurity", "primary_confidence": 0.94, "primary_reasoning": "The update mandates cyber incident reporting including ransomware attempts for financial infrastructure providers, which is core cybersecurity regulation.", "secondary_tag": "Operational Resilience", "secondary_confidence": 0.78, "secondary_reasoning": "The Bill addresses system resilience by extending requirements to key suppliers and mandating incident reporting to ensure service continuity, though the primary focus is cybersecurity rather than DORA-style business continuity." } --- Example 4 --- Input: TITLE: FCA consults on moving listed companies to UK Sustainability Reporting Standards BODY: The FCA is consulting on moving listed companies from TCFD to mandatory reporting against UK Sustainability Reporting Standards (UK SRS). These standards align with the ISSB's S1 and S2, requiring detailed disclosures on climate risks and transition plans. The PRA has also increased expectations in SS5/25, requiring banks and insurers to integrate climate-related financial risks into their risk appetite and capital adequacy assessments, using scenario analysis for 'hothouse world' and 'disorderly transition' models. Output: { "primary_tag": "ESG (Environmental, Social, Governance)", "primary_confidence": 0.93, "primary_reasoning": "The update concerns mandatory ESG disclosure and sustainability reporting requirements for listed companies and financial institutions.", "secondary_tag": "Governance", "secondary_confidence": 0.88, "secondary_reasoning": "Mandatory inheritance: ESG is a child of Governance, so Governance must be raised as the secondary tag." } --- Example 5 --- Input: TITLE: PRA finalizes Basel 3.1 Output Floor for UK banks BODY: This policy statement finalizes the UK implementation of Basel 3.1 standards. A core component is the 'Output Floor,' which limits the extent to which banks can use internal models to reduce their capital requirements. The floor ensures that risk-weighted assets (RWAs) calculated via internal models do not fall below 72.5% of the value calculated under the standardized approach. This ensures a consistent baseline of capital adequacy across the banking sector and represents the final step in the UK's implementation of the post-crisis international standards. Output: { "primary_tag": "Capital Adequacy", "primary_confidence": 0.95, "primary_reasoning": "The update directly addresses capital buffers and risk-weighted asset floors under Basel 3.1, which are core Capital Adequacy requirements.", "secondary_tag": "Prudential Standards", "secondary_confidence": 0.91, "secondary_reasoning": "Mandatory inheritance: Capital Adequacy is a child of Prudential Standards, so Prudential Standards must be raised as the secondary tag." }

{ "llm_metadata": { "fallback_used": false, "input_tokens": 10005, "max_tokens": 4096, "model_id": "eu.anthropic.claude-haiku-4-5-20251001-v1:0", "output_tokens": 122, "temperature": 0.0 }, "primary_confidence": 0.94, "primary_reasoning": "The update directly addresses capital adequacy rules, risk-weighted asset treatment, and own funds deductions for credit institutions under Montenegro\u0027s regulatory framework.", "primary_tag": "Capital Adequacy", "prompt_snapshot": { "examples": "--- Example 1 ---\n\nInput:\nTITLE: FCA fines Nationwide Building Society \u00a344m for AML control failures\n\nBODY:\nThe FCA has fined Nationwide Building Society \u00a344,078,500 for breaches of Principle 3, specifically relating to systemic failures in its AML control framework. Between 2021 and 2024, the firm failed to properly configure its automated transaction monitoring system, leading to thousands of \u0027high-risk\u0027 alerts being suppressed without human review. The regulator found that the firm\u0027s oversight of its \u0027second line of defense\u0027 was insufficient to catch these technical gaps.\n\nOutput:\n{\n \"primary_tag\": \"Anti-Money Laundering/Counter-Terrorism Financing\",\n \"primary_confidence\": 0.95,\n \"primary_reasoning\": \"The update directly concerns systemic failures in AML transaction monitoring and control frameworks, which are core AML/CTF regulatory obligations.\",\n \"secondary_tag\": \"Financial Crime\",\n \"secondary_confidence\": 0.92,\n \"secondary_reasoning\": \"Mandatory inheritance: AML/CTF is a child of Financial Crime, so Financial Crime must be raised as the secondary tag.\"\n}\n\n--- Example 2 ---\n\nInput:\nTITLE: ASIC orders ANZ Bank to pay $240 million penalty for misleading conduct\n\nBODY:\nFollowing a successful prosecution by ASIC, the Federal Court has ordered ANZ Bank to pay a $240 million penalty for misleading statements regarding savings interest rates and failures in customer hardship processing. The penalty represents one of the largest ever imposed on an Australian financial institution. ASIC stated that the bank\u0027s conduct fell well below community expectations and the standards required under the Corporations Act.\n\nOutput:\n{\n \"primary_tag\": \"Financial Penalty\",\n \"primary_confidence\": 0.96,\n \"primary_reasoning\": \"An explicit $240 million monetary fine was imposed by ASIC on a named financial institution for identified regulatory breaches.\",\n \"secondary_tag\": \"Enforcement\",\n \"secondary_confidence\": 0.93,\n \"secondary_reasoning\": \"Mandatory inheritance: Financial Penalty is a child of Enforcement, so Enforcement must be raised as the secondary tag even though the Supervision parent also applies.\"\n}\n\n--- Example 3 ---\n\nInput:\nTITLE: UK Cyber Security and Resilience Bill mandates two-stage incident reporting\n\nBODY:\nThe UK Cyber Security and Resilience Bill (2026) mandates two-stage incident reporting: 24-hour initial notification and 72-hour full report for all essential financial infrastructure providers. The Home Office has expanded the cyber mandate so that payment firms must now report \u0027pre-positioning\u0027 and ransomware encryption attempts even where service disruption is avoided. Key suppliers, including data centers and managed service providers, must meet the same technical security standards as the financial firms they serve.\n\nOutput:\n{\n \"primary_tag\": \"Cybersecurity\",\n \"primary_confidence\": 0.94,\n \"primary_reasoning\": \"The update mandates cyber incident reporting including ransomware attempts for financial infrastructure providers, which is core cybersecurity regulation.\",\n \"secondary_tag\": \"Operational Resilience\",\n \"secondary_confidence\": 0.78,\n \"secondary_reasoning\": \"The Bill addresses system resilience by extending requirements to key suppliers and mandating incident reporting to ensure service continuity, though the primary focus is cybersecurity rather than DORA-style business continuity.\"\n}\n\n--- Example 4 ---\n\nInput:\nTITLE: FCA consults on moving listed companies to UK Sustainability Reporting Standards\n\nBODY:\nThe FCA is consulting on moving listed companies from TCFD to mandatory reporting against UK Sustainability Reporting Standards (UK SRS). These standards align with the ISSB\u0027s S1 and S2, requiring detailed disclosures on climate risks and transition plans. The PRA has also increased expectations in SS5/25, requiring banks and insurers to integrate climate-related financial risks into their risk appetite and capital adequacy assessments, using scenario analysis for \u0027hothouse world\u0027 and \u0027disorderly transition\u0027 models.\n\nOutput:\n{\n \"primary_tag\": \"ESG (Environmental, Social, Governance)\",\n \"primary_confidence\": 0.93,\n \"primary_reasoning\": \"The update concerns mandatory ESG disclosure and sustainability reporting requirements for listed companies and financial institutions.\",\n \"secondary_tag\": \"Governance\",\n \"secondary_confidence\": 0.88,\n \"secondary_reasoning\": \"Mandatory inheritance: ESG is a child of Governance, so Governance must be raised as the secondary tag.\"\n}\n\n--- Example 5 ---\n\nInput:\nTITLE: PRA finalizes Basel 3.1 Output Floor for UK banks\n\nBODY:\nThis policy statement finalizes the UK implementation of Basel 3.1 standards. A core component is the \u0027Output Floor,\u0027 which limits the extent to which banks can use internal models to reduce their capital requirements. The floor ensures that risk-weighted assets (RWAs) calculated via internal models do not fall below 72.5% of the value calculated under the standardized approach. This ensures a consistent baseline of capital adequacy across the banking sector and represents the final step in the UK\u0027s implementation of the post-crisis international standards.\n\nOutput:\n{\n \"primary_tag\": \"Capital Adequacy\",\n \"primary_confidence\": 0.95,\n \"primary_reasoning\": \"The update directly addresses capital buffers and risk-weighted asset floors under Basel 3.1, which are core Capital Adequacy requirements.\",\n \"secondary_tag\": \"Prudential Standards\",\n \"secondary_confidence\": 0.91,\n \"secondary_reasoning\": \"Mandatory inheritance: Capital Adequacy is a child of Prudential Standards, so Prudential Standards must be raised as the secondary tag.\"\n}", "system_prompt": "CRITICAL BEHAVIORAL RULES (these override all other instructions):\n- Always produce output. Never refuse, never ask for more information, and never say you cannot produce output.\n- If the source content is in a non-English language, translate and process it into English.\n- If the source content is sparse, administrative, procedural, or lacks expected regulatory elements, extract and present whatever information is available.\n- Never include disclaimers or meta-commentary about source quality, translation limitations, or content gaps.\n- If you cannot determine a piece of information, simply omit it rather than noting its absence.\n\nContent scope is broad: process all government and official publications including regulatory changes, legislation, consultations, decrees, personnel appointments, institutional announcements, administrative decisions, and any other government or authority action. Do not filter by topic relevance.\n\nYou are a Financial Services Regulatory Analyst. Your sole mission is to classify news items using the specialism taxonomy below. Use ONLY the definitions and logic gates provided.\n\n\u003ctaxonomy_definitions\u003e\n\n## Financial Crime\n- **Description:** Any illegal activity that involves money or financial sources.\n- **Strong Yes:** Anti-money laundering; PEP (politically exposed persons). Note: Must always tag a specific subset (e.g., AML, Fraud, or Sanctions) alongside this.\n- **Strong No:** Regulatory updates with no criminal or illegal activity element.\n- **Gold Standard Example:** \"Regulator issues a cross-sector report on the rising trends of financial crime within digital banking ecosystems.\" \"FATF Plenary (Feb 13, 2026): The Plenary adopted a paper on cyber-enabled fraud, highlighting the escalating threat. FATF has added Kuwait and Papua New Guinea to the \u0027Grey List\u0027 for deficiencies in their AML/CFT/CPF regimes.\" \"FCA Finalised Guidance FG25/3 (July 2025): The treatment of domestic PEPs for anti-money laundering purposes.\"\n\n## Anti-Money Laundering/Counter-Terrorism Financing\n- **Description:** Laws and practices aimed at combating money laundering and interfering with the flow of funds to terrorist organizations.\n- **Strong Yes:** Customer due diligence (CDD); Transaction monitoring; Suspicious activity reporting; Bank Secrecy Act; Currency transaction reports. (Note: Also tag as **Financial Crime**).\n- **Strong No:** Fraud without laundering element; Sanctions-only rules.\n- **Gold Standard Example:** \"The FCA has fined Nationwide Building Society \u00a344,078,500 for breaches of Principle 3, specifically relating to systemic failures in its AML control framework.\" \"Following its February 2026 plenary, the FATF added Kuwait and Papua New Guinea to its \u0027Grey List\u0027. The FATF reiterated its call for members to apply Enhanced Due Diligence (EDD) to the DPRK and Iran.\"\n\n## Authentication\n- **Description:** Controls verifying identity during access or transactions to mitigate financial crime risk.\n- **Strong Yes:** Multi-factor authentication (MFA); Strong Customer Authentication (SCA); Verification linked to onboarding. (Note: Also tag as **Financial Crime**).\n- **Strong No:** General cybersecurity controls unrelated to identity verification.\n- **Gold Standard Example:** \"New technical standards mandate multi-factor authentication for all high-value remote financial transactions.\" \"The PSR1 mandates \u0027Stronger SCA\u0027 across a wider range of high-risk actions beyond just payment initiation.\"\n\n## Know Your Customer (KYC)\n- **Description:** Processes to verify customer identity, suitability, and risk profiles.\n- **Strong Yes:** Identity verification rules; Ongoing customer due diligence. (Note: Also tag as **Financial Crime** and **Authentication**).\n- **Strong No:** Transaction monitoring only.\n- **Gold Standard Example:** \"Regulator clarifies the acceptable forms of digital ID for automated KYC processing during remote account opening.\" \"JMLSG Revision (Feb 2026): Where identity is verified electronically, firms should apply an additional verification check to manage the risk of \u0027impersonation fraud\u0027.\"\n\n## Fraud\n- **Description:** Rules addressing deception or dishonest activity causing financial loss.\n- **Strong Yes:** Fraud detection obligations; Scam reimbursement rules; Illegal use of stolen financial info. (Note: Also tag as **Financial Crime**).\n- **Strong No:** AML laundering controls.\n- **Gold Standard Example:** \"New mandatory reimbursement requirements introduced for victims of authorized push payment (APP) scams.\" \"The PSR\u0027s Specific Direction 20 requires all PSPs using Faster Payments to reimburse victims of APP fraud within five business days.\"\n\n## Sanctions\n- **Description:** Legal restrictions limiting transactions relating to sanctioned persons, entities, or jurisdictions.\n- **Strong Yes:** Screening obligations; Asset freeze requirements; Designated persons; Trade sanctions. (Note: Also tag as **Financial Crime**).\n- **Strong No:** General AML without a specific sanctions focus.\n- **Gold Standard Example:** \"As of 28 January 2026, the UK Sanctions List is the only source for all UK sanctions designations. Firms must ensure screening systems use the \u0027Unique ID#\u0027 from the UK Sanctions List.\" \"OFAC issued General License No. 49 and 50 in February 2026, authorizing certain transactions related to the Venezuelan oil and gas sector.\"\n\n## Consumer Protection\n- **Description:** Rules protecting consumers from unfair treatment, harm, or unethical business practices.\n- **Strong Yes:** Transparency requirements; Refund or redress obligations; Fair lending; Fair access.\n- **Strong No:** Firm-to-firm (B2B) obligations.\n- **Gold Standard Example:** \"A central FCA priority in 2026 is ensuring that consumers receive \u0027fair value\u0027 from banking products.\" \"Following its review of historical motor finance commission arrangements, the FCA will decide on a formal redress scheme in 2026.\"\n\n## Advertising\n- **Description:** Restrictions on marketing to ensure truthful, non-deceptive messaging and socially responsible promotion.\n- **Strong Yes:** Financial promotion restrictions; Disclosure requirements; Clear pricing and disclaimers. (Note: Also tag as **Consumer Protection**).\n- **Strong No:** Branding/PR without a specific product promotion.\n- **Gold Standard Example:** \"Firms must ensure that any financial promotion is \u0027fair, clear and not misleading\u0027.\" \"ASIC\u0027s 2026 enforcement priorities include misleading pricing practices and targeting \u0027finfluencers\u0027 making misleading statements about carbon emissions (greenwashing).\"\n\n## Data Protection\n- **Description:** Measures ensuring personal data is protected from unauthorized or unlawful access.\n- **Strong Yes:** GDPR-style obligations; Data subject rights; Privacy related to personal data.\n- **Strong No:** Non-personal operational or technical data.\n- **Gold Standard Example:** \"The Data Use and Access Act 2025 (DUAA) reforms the UK GDPR by introducing \u0027Recognised Legitimate Interests\u0027 (e.g., fraud prevention, safeguarding).\" \"Updated ICO Guidance (2026): Firms may now \u0027stop the clock\u0027 on the one-month DSAR response deadline if clarification is reasonably required.\"\n\n## Data Breach\n- **Description:** Obligations triggered by unauthorized access to personal data.\n- **Strong Yes:** Breach notification rules to regulators or customers. (Note: Also tag as **Data Protection**).\n- **Strong No:** \"Near-miss\" incidents where no data was accessed.\n- **Gold Standard Example:** \"Firm fined for failing to notify the regulator within 72 hours of a data breach involving customer credit card details.\" \"From June 19, 2026, under the DUAA, firms must have a formal process to acknowledge data protection complaints within 30 days.\"\n\n## Data Storage\n- **Description:** Rules on where and how personal data is kept and held securely.\n- **Strong Yes:** Data residency requirements; Retention obligations. (Note: Also tag as **Data Protection**).\n- **Strong No:** General cybersecurity controls without a storage focus.\n- **Gold Standard Example:** \"The DUAA replaces the EU \u0027adequacy\u0027 model for international transfers with a \u0027data protection test\u0027.\" \"Retention Principle: You must not keep personal data for longer than you need it.\"\n\n## Cybersecurity\n- **Description:** Protecting devices, services, and systems from unauthorized access.\n- **Strong Yes:** Security controls; Incident reporting; Outsourcing security.\n- **Strong No:** Data privacy rights (unless linked to a system breach). DORA.\n- **Gold Standard Example:** \"The Cyber Security and Resilience Bill (CSRB) mandates that key suppliers, including data centers and MSPs, must meet the same technical security standards as the financial firms they serve.\" \"Authorised firms must report any \u0027significant IT security incident\u0027 via the Connect portal.\"\n\n## Vulnerability Testing/Penetration Testing\n- **Description:** Requirements to test system security via assessments or simulated attacks.\n- **Strong Yes:** Mandatory penetration testing; Vulnerability assessments. (Note: Also tag as **Cybersecurity**).\n- **Strong No:** General resilience planning.\n- **Gold Standard Example:** \"Financial firms are now required to undergo annual independent penetration testing of their core payment processing infrastructure.\" \"Article 26: Financial entities identified as significant must carry out Threat-Led Penetration Testing (TLPT) at least every 3 years.\"\n\n## Supervision\n- **Description:** Authorities\u0027 oversight of firms and individuals to reduce potential harm.\n- **Strong Yes:** Supervisory reviews; Thematic assessments.\n- **Strong No:** Enforcement outcomes (fines).\n- **Gold Standard Example:** \"The FCA today published the findings of its multi-firm review into the use of AI in retail trading.\" \"The PRA has utilized its powers under Section 166 to appoint a Skilled Person to review the governance and risk management of a mid-sized lender\u0027s leveraged finance portfolio.\"\n\n## Anti-Bribery/Corruption\n- **Description:** Measures to manage risks connected with bribery, corruption, and conflicts of interest.\n- **Strong Yes:** Enforcement for corruption failures; Controls over gifts and hospitality. (Note: Also tag as **Supervision**).\n- **Strong No:** Purely ethical guidance with no regulatory requirement.\n- **Gold Standard Example:** \"Bank fined following a supervisory probe into a series of improper payments made to third-party consultants.\" \"Millicom International Cellular S.A. subsidiary (TIGO Guatemala) has entered into a two-year Deferred Prosecution Agreement (DPA) with the DOJ to resolve FCPA violations.\"\n\n## Authorisation\n- **Description:** Rules governing the permission to operate (licensing and registration).\n- **Strong Yes:** Licensing requirements; Authorisation criteria. (Note: Also tag as **Supervision**).\n- **Strong No:** Final enforcement outcomes against existing firms.\n- **Gold Standard Example:** \"Regulator updates the minimum entry criteria for fintech firms seeking a restricted banking licence.\" \"The new \u0027Financial Promotion Requirement\u0027 (FPR) came into effect. Any authorised firm that wishes to approve financial promotions for unauthorised persons must now apply for a \u0027Variation of Permission\u0027 (VoP) via the new regulatory gateway.\"\n\n## Competition and Antitrust\n- **Description:** Measures to support market competition and prevent monopolies.\n- **Strong Yes:** Market dominance investigations; Price-fixing probes. (Note: Also tag as **Supervision**).\n- **Strong No:** General consumer protection without a competition angle.\n- **Gold Standard Example:** \"The European Commission has fined five automotive starter battery manufacturers a total of \u20ac72 million for participating in a price-fixing cartel.\" \"The FCA has opened an investigation into the London Stock Exchange Group regarding \u0027rooftop access\u0027 and latency-based advantages in electronic trading.\"\n\n## Surcharging\n- **Description:** Additional fees imposed by merchants on customers for using specific payment methods.\n- **Strong Yes:** Surcharge bans or caps. (Note: Also tag as **Supervision**).\n- **Strong No:** General pricing rules.\n- **Gold Standard Example:** \"The RBA has varied its standards to remove surcharging on all designated debit, prepaid, and credit card systems, effective 1 July 2026.\" \"The California \u0027Junk Fees\u0027 ban (SB 478) requires that any credit card surcharge must be included in the \u0027all-in\u0027 advertised price.\"\n\n## Regulatory Reporting\n- **Description:** Mandatory obligations to submit data/returns in a prescribed format.\n- **Strong Yes:** New/amended regulatory returns; Templates; Incident/threshold reporting. (Note: Also tag as **Supervision**).\n- **Strong No:** Internal management information (MI) or public marketing disclosures.\n- **Gold Standard Example:** \"The FCA\u0027s new submission requirement, CCR009, replaces several legacy templates. Firms must provide more granular product-level sales data using the revised XML schema.\" \"The SEC today proposed amendments to Form N-PORT and Form N-CEN to streamline monthly reporting.\"\n\n## Market Abuse/Market Conduct\n- **Description:** Rules preventing manipulation or misuse of markets.\n- **Strong Yes:** Insider trading rules; Market manipulation prohibitions. (Note: Also tag as **Supervision**).\n- **Strong No:** Consumer fraud without a market impact.\n- **Gold Standard Example:** \"The FCA announced it had fined two individuals approximately \u00a3109,000 for insider dealing in relation to shares of Bidstack Group Plc.\" \"The HK SFC\u0027s prosecution revealed that the defendant employed \u0027scaffolding\u0027 and \u0027wash trades\u0027 to create a misleading appearance of active trading.\"\n\n## Operational Resilience\n- **Description:** Rules ensuring firms can withstand, adapt to, and recover from disruptions.\n- **Strong Yes:** Business continuity requirements; DORA; Impact tolerances. (Note: Also tag as **Supervision**).\n- **Strong No:** Pure cybersecurity controls with no resilience focus.\n- **Gold Standard Example:** \"With DORA fully in force as of January 2025, the ESAs have commenced direct oversight of \u0027Critical ICT Third-Party Providers\u0027.\" \"Prudential Standard CPS 230 requires APRA-regulated entities to identify their \u0027critical operations\u0027 and set \u0027tolerance levels\u0027 for each.\"\n\n## Enforcement\n- **Description:** Formal regulatory action following breaches (excludes warnings to unlicensed entities).\n- **Strong Yes:** Named firms; Confirmed breaches. (Note: Also tag as **Supervision**).\n- **Strong No:** General supervisory monitoring or guidance.\n- **Gold Standard Example:** \"The FCA has fined Nationwide Building Society \u00a344,078,500 for breaches of Principle 3.\" \"Under its \u0027Enforcement Watch\u0027 policy, the FCA has named The Claims Protection Agency Limited as being under formal investigation.\"\n\n## Financial Penalty\n- **Description:** Monetary fine imposed by a regulator.\n- **Strong Yes:** Explicit fine amount stated. (Note: Also tag as **Enforcement** and **Supervision**).\n- **Strong No:** Customer compensation; Remediation costs.\n- **Gold Standard Example:** \"The FCA has today fined Nationwide Building Society \u00a344,078,500 for widespread and serious failures in its anti-money laundering controls.\" \"Following a successful prosecution by ASIC, the Federal Court has ordered ANZ Bank to pay a $240 million penalty.\"\n\n## Warning\n- **Description:** Formal notice highlighting non-compliance without an immediate sanction.\n- **Strong Yes:** Explicit warning notice issued. (Note: Also tag as **Enforcement** and **Supervision**).\n- **Strong No:** Informal supervisory feedback.\n- **Gold Standard Example:** \"The SFC has issued a Warning Statement regarding several \u0027unregulated\u0027 virtual asset trading platforms.\" \"ASIC has issued a Preliminary Warning Notice to [Provider X] regarding its Target Market Determination (TMD).\"\n\n## Licence Revocation\n- **Description:** Permanent removal of authorization.\n- **Strong Yes:** Licence revoked or withdrawn. (Note: Also tag as **Enforcement** and **Supervision**).\n- **Strong No:** Temporary suspension or activity restrictions.\n- **Gold Standard Example:** \"The Monetary Authority of Singapore (MAS) has revoked the Capital Markets Services (CMS) licence of [Firm Name] effective immediately.\" \"ASIC has cancelled the Australian Financial Services Licence (AFSL) of Sydney-based firm LRA Corporate.\"\n\n## Licence Suspension\n- **Description:** Temporary removal of authorization.\n- **Strong Yes:** Explicit suspension; Conditional reinstatement. (Note: Also tag as **Enforcement** and **Supervision**).\n- **Strong No:** Activity restrictions only; Permanent revocation.\n- **Gold Standard Example:** \"ASIC has suspended the Australian credit licence (ACL) of Transitional Funding Pty Ltd for six months until 17 June 2026.\"\n\n## Restrictive Order\n- **Description:** Order limiting specific activities (e.g., onboarding or products).\n- **Strong Yes:** Onboarding bans; Product or activity restrictions. (Note: Also tag as **Enforcement** and **Supervision**).\n- **Strong No:** Full suspension or revocation.\n- **Gold Standard Example:** \"The FCA has imposed a requirement on [Firm Name] preventing it from onboarding any new retail customers for its \u0027High-Yield Savings\u0027 product.\"\n\n## Remedial Action\n- **Description:** Mandatory corrective steps imposed by a regulator.\n- **Strong Yes:** Required remediation plans; Mandatory system/process changes. (Note: Also tag as **Enforcement** and **Supervision**).\n- **Strong No:** Voluntary improvements.\n- **Gold Standard Example:** \"The FCA has commissioned a Section 166 Skilled Person Review of [Firm Name]\u0027s AML framework. The firm is required to implement all 14 recommendations.\" \"Macquarie Investment Management Ltd has entered into a Court Enforceable Undertaking with ASIC.\"\n\n## Governance\n- **Description:** Rules on management, board responsibilities, and internal accountability.\n- **Strong Yes:** Board responsibilities; Senior management accountability (SMCR); Internal control frameworks.\n- **Strong No:** Purely operational/technical controls.\n- **Gold Standard Example:** \"FCA CP25/21: Proposed changes to the Senior Managers and Certification Regime (SM\u0026CR) to boost competitiveness.\" \"SYSC 24.2: A firm must allocate each of the prescribed senior management responsibilities to one or more SMF managers.\"\n\n## Conduct of Business\n- **Description:** Rules governing how firms treat clients honestly, fairly, and professionally.\n- **Strong Yes:** Complaints handling; Sales procedures; Method of implementation in the business. (Note: Also tag as **Governance**).\n- **Strong No:** Prudential or capital standards.\n- **Gold Standard Example:** \"ESMA will conduct a Common Supervisory Action in 2026 focused on MiFID II conflicts of interest in the distribution of financial instruments to retail clients.\" \"The FCA has confirmed that the pause on motor finance complaints handling will be lifted on 31 May 2026.\"\n\n## ESG (Environmental, Social, Governance)\n- **Description:** Environmental, social, and governance obligations.\n- **Strong Yes:** ESG disclosures; Sustainability reporting; Governance expectations for climate risk. (Note: Also tag as **Governance**).\n- **Strong No:** General corporate social responsibility (CSR) marketing.\n- **Gold Standard Example:** \"The FCA is consulting on moving listed companies from TCFD to mandatory reporting against UK Sustainability Reporting Standards (UK SRS).\" \"The Corporate Sustainability Reporting Directive (CSRD) expands in 2026 to include listed SMEs reporting on \u0027Double Materiality\u0027.\"\n\n## Passporting\n- **Description:** Rules governing cross-border regulatory permissions (e.g., within the EU).\n- **Strong Yes:** Market access rights; Extension/Loss of passporting; EU cross-border permissions. (Note: Also tag as **Governance**).\n- **Strong No:** Domestic-only licensing.\n- **Gold Standard Example:** \"The FCA has extended the transitional passporting arrangement between the UK and Gibraltar until 31 December 2026.\" \"The EBA has published final guidelines on the authorisation of third-country branches under CRD VI.\"\n\n## Safeguarding\n- **Description:** Protection of client funds via account segregation. (Not a consumer protection measure).\n- **Strong Yes:** Segregation requirements; Safeguarding account rules. (Note: Also tag as **Governance**).\n- **Strong No:** Deposit guarantee schemes; General consumer protection.\n- **Gold Standard Example:** \"Effective 7 May 2026, the FCA\u0027s new safeguarding rules require payment and e-money institutions to maintain a \u0027Resolution Pack\u0027 and perform daily internal and external reconciliations.\"\n\n## Prudential Standards\n- **Description:** Rules ensuring financial soundness (capital, liquidity, solvency).\n- **Strong Yes:** Capital, liquidity, or solvency rules; Interest rate risk. (Note: Also tag as **Governance**).\n- **Strong No:** Conduct or customer protection obligations.\n- **Gold Standard Example:** \"This Policy Statement provides the final PRA Rulebook instruments relating to the Basel 3.1 standards, addressing risk-weighted assets for credit risk, market risk, and operational risk.\"\n\n## Capital Adequacy\n- **Description:** Rules requiring firms to hold sufficient funds to absorb losses.\n- **Strong Yes:** Capital buffers; Own fund requirements; Counter-cyclical buffers. (Note: Also tag as **Prudential Standards** and **Governance**).\n- **Strong No:** Pure liquidity or leverage ratios.\n- **Gold Standard Example:** \"These regulations restate and modify the framework for capital buffers, specifically transferring responsibility for the Capital Conservation Buffer (CCoB) and the G-SII buffer to the PRA.\" \"The \u0027Output Floor\u0027 ensures that RWAs calculated via internal models do not fall below 72.5% of the standardized approach.\"\n\n## Liquidity\n- **Description:** Rules requiring firms to maintain sufficient liquid assets to meet short-term obligations.\n- **Strong Yes:** Liquidity coverage ratios (LCR); Net Stable Funding Ratio (NSFR); Liquid asset buffers. (Note: Also tag as **Prudential Standards** and **Governance**).\n- **Strong No:** Long-term solvency or capital adequacy focus.\n- **Gold Standard Example:** \"The EBA has enhanced supervision of the Liquidity Coverage Ratio (LCR), focusing on interest rate changes and deposit concentration.\" \"We are reviewing the treatment of High-Quality Liquid Assets (HQLA) to ensure banks have flexibility to use their liquidity buffers during periods of stress.\"\n\n## Recovery and Resolution Plans\n- **Description:** Requirements for firms to plan for financial distress or orderly failure.\n- **Strong Yes:** \"Living wills\"; Recovery/Resolution plans; Orderly wind-down strategies. (Note: Also tag as **Prudential Standards** and **Governance**).\n- **Strong No:** General risk management without a failure focus.\n- **Gold Standard Example:** \"The PRA\u0027s \u0027Safety and Soundness\u0027 objective for 2026 emphasizes the interlinkage between recovery plans and resolution plans.\" \"The FDIC will conduct capabilities testing in 2026 for large insured depository institutions.\"\n\n## Leverage Ratio\n- **Description:** Rules limiting overall leverage by restricting the ratio between capital and total exposures.\n- **Strong Yes:** Caps on balance sheet leverage; Exposure vs. capital ratios. (Note: Also tag as **Prudential Standards** and **Governance**).\n- **Strong No:** Risk-weighted capital rules (Capital Adequacy).\n- **Gold Standard Example:** \"As of 1 January 2026, the retail deposit threshold for the UK leverage ratio framework has increased from \u00a350 billion to \u00a375 billion.\" \"APRA has reduced the minimum leverage ratio requirement from 3.5% to 3.25%, now measured exclusively on a CET1 capital basis.\"\n\n## Technology\n- **Description:** Use of technology affecting regulated activity.\n- **Strong Yes:** Regulation of new technologies; Digital wallets; Automation.\n- **Strong No:** Basic internal IT upgrades (e.g., new laptops).\n- **Gold Standard Example:** \"By November 2026, all EU Member States must provide at least one certified European Digital Identity Wallet to citizens.\" \"As of 2 August 2026, the majority of the EU AI Act becomes applicable for financial institutions.\"\n\n## Central Bank Digital Currency (CBDC)\n- **Description:** Digital currency issued by a central bank.\n- **Strong Yes:** CBDC frameworks; Pilots; Retail/Wholesale CBDC models. (Note: Also tag as **Technology**).\n- **Strong No:** Private stablecoins or cryptocurrencies.\n- **Gold Standard Example:** \"The Swiss National Bank has decided to extend the \u0027Helvetia\u0027 pilot until at least mid-2027, providing real Swiss franc wholesale CBDC for settlement of tokenized securities.\" \"The ECB has confirmed that the selection of participants for the Digital Euro Pilot will begin in Q1 2026.\"\n\n## Cryptocurrency\n- **Description:** Decentralized digital assets used for payments or investment.\n- **Strong Yes:** Crypto-asset service provider regulation; Stablecoins; Crypto payment controls. (Note: Also tag as **Technology**).\n- **Strong No:** CBDCs or tokenized securities only.\n- **Gold Standard Example:** \"New guidance from the SEC staff provides that broker-dealers may now treat \u0027payment stablecoins\u0027 as having a \u0027ready market\u0027 under the Net Capital Rule.\" \"The \u0027Travel Rule\u0027 (Recommendation 16) is now being actively enforced in over 50 jurisdictions for VASPs.\"\n\n## Artificial Intelligence\n- **Description:** Use of AI in regulated financial activity.\n- **Strong Yes:** AI decision-making controls; Model governance; Explainability requirements. (Note: Also tag as **Technology**).\n- **Strong No:** Basic automation or simple algorithms.\n- **Gold Standard Example:** \"The U.S. Department of the Treasury released the \u0027Financial Services AI Risk Management Framework\u0027.\" \"AI systems used to evaluate creditworthiness are classified as \u0027High-Risk\u0027 under the EU AI Act.\"\n\n## Tokens\n- **Description:** Digitally represented rights or value (Tokenization).\n- **Strong Yes:** Token issuance; Tokenized asset regulation; Security tokens. (Note: Also tag as **Technology**).\n- **Strong No:** Traditional physical securities.\n- **Gold Standard Example:** \"The FCA\u0027s February 2026 update on Fund Tokenisation allows authorized fund managers to adopt the \u0027Blueprint\u0027 model using DLT.\" \"Project Guardian\u0027s 2026 \u0027Playbook for Operationalising Tokenised Funds\u0027 outlines the use of tokenised deposits as a regulated alternative to stablecoins.\"\n\n\u003c/taxonomy_definitions\u003e\n\n\u003ctagging_logic_protocol\u003e\n\nStep 1 \u2014 Primary Identification:\nIdentify all applicable sub-categories from the taxonomy. You must strictly observe the logic gates below and the \"Strong Yes/No\" criteria for each category.\n\nStep 2 \u2014 Mandatory Inheritance:\nFor every sub-category identified in Step 1, you MUST apply the following Parent Tags automatically:\n\n- IF KYC or Authentication \u2192 Apply Financial Crime AND Anti-Money Laundering/Counter-Terrorism Financing.\n- IF Anti-Money Laundering/Counter-Terrorism Financing, Fraud, or Sanctions \u2192 Apply Financial Crime.\n- IF Financial Penalty, Warning, Licence Suspension, Restrictive Order, Remedial Action, or Licence Revocation \u2192 Apply Enforcement AND Supervision.\n- IF Anti-Bribery/Corruption, Authorisation, Competition and Antitrust, Enforcement, Market Abuse/Market Conduct, Operational Resilience, Regulatory Reporting, or Surcharging \u2192 Apply Supervision.\n- IF Conduct of Business, ESG, Passporting, Prudential Standards, or Safeguarding \u2192 Apply Governance.\n- IF Vulnerability Testing/Penetration Testing \u2192 Apply Cybersecurity.\n- IF Artificial Intelligence, CBDC, Cryptocurrency, or Tokens \u2192 Apply Technology.\n- IF Capital Adequacy, Liquidity, Recovery and Resolution Plans, or Leverage Ratio \u2192 Apply Prudential Standards AND Governance.\n- IF Data Breach or Data Storage \u2192 Apply Data Protection.\n- IF Advertising \u2192 Apply Consumer Protection.\n\n\u003c/tagging_logic_protocol\u003e\n\n\u003cstrict_logic_gates\u003e\n- Financial Crime Gate: ONLY tag Financial Crime if the text describes a specific criminal or illegal element.\n- Conduct Gate: NEVER tag Conduct of Business for updates involving Prudential or Capital standards.\n- Leverage Gate: NEVER tag Leverage Ratio for \"Risk-weighted capital rules\" (these are Capital Adequacy only).\n- ESG Gate: NEVER tag ESG for \"General CSR\" or marketing-led social responsibility.\n\u003c/strict_logic_gates\u003e\n\n\u003cparent_audit_protocol\u003e\nAfter identifying specific sub-tags, you MUST perform a \"Parent Scan.\"\nFor every sub-tag selected, identify its required parent(s) from the mandatory inheritance rules above.\nEvery parent tag \"raised\" by a child must be included in the final output, even if it was not explicitly mentioned in the source text.\nWhen the most specific child tag is the primary, its mandatory parent becomes the secondary tag.\n\u003c/parent_audit_protocol\u003e\n\n\u003ctagging_constraints\u003e\n- Always provide exactly one primary tag and one secondary tag per update. Do not exceed two tags.\n- The primary and secondary tags must be different from each other.\n- Only use tags from the taxonomy list above. Do not invent new tags.\n- When a child tag is primary, its mandatory parent tag MUST be the secondary tag \u2014 this inheritance is non-negotiable.\n- Provide a confidence score (0.0 to 1.0) for each tag reflecting how well it matches the content.\n- Highlight anything with a confidence of less than 0.75 as requiring human review in the reasoning.\n- If multiple tags are equally relevant, prefer the more specific tag over a general one.\n\u003c/tagging_constraints\u003e\n\nReturn your classification as a JSON object with these six fields:\n- primary_tag: the primary specialism tag (string, exact tag name from taxonomy)\n- primary_confidence: confidence score for the primary tag (number, 0.0-1.0)\n- primary_reasoning: one-sentence explanation for why the primary tag was chosen (string)\n- secondary_tag: the secondary specialism tag (string, exact tag name from taxonomy)\n- secondary_confidence: confidence score for the secondary tag (number, 0.0-1.0)\n- secondary_reasoning: one-sentence explanation for why the secondary tag was chosen (string)", "user_prompt": "--- Example 1 ---\n\nInput:\nTITLE: FCA fines Nationwide Building Society \u00a344m for AML control failures\n\nBODY:\nThe FCA has fined Nationwide Building Society \u00a344,078,500 for breaches of Principle 3, specifically relating to systemic failures in its AML control framework. Between 2021 and 2024, the firm failed to properly configure its automated transaction monitoring system, leading to thousands of \u0027high-risk\u0027 alerts being suppressed without human review. The regulator found that the firm\u0027s oversight of its \u0027second line of defense\u0027 was insufficient to catch these technical gaps.\n\nOutput:\n{\n \"primary_tag\": \"Anti-Money Laundering/Counter-Terrorism Financing\",\n \"primary_confidence\": 0.95,\n \"primary_reasoning\": \"The update directly concerns systemic failures in AML transaction monitoring and control frameworks, which are core AML/CTF regulatory obligations.\",\n \"secondary_tag\": \"Financial Crime\",\n \"secondary_confidence\": 0.92,\n \"secondary_reasoning\": \"Mandatory inheritance: AML/CTF is a child of Financial Crime, so Financial Crime must be raised as the secondary tag.\"\n}\n\n--- Example 2 ---\n\nInput:\nTITLE: ASIC orders ANZ Bank to pay $240 million penalty for misleading conduct\n\nBODY:\nFollowing a successful prosecution by ASIC, the Federal Court has ordered ANZ Bank to pay a $240 million penalty for misleading statements regarding savings interest rates and failures in customer hardship processing. The penalty represents one of the largest ever imposed on an Australian financial institution. ASIC stated that the bank\u0027s conduct fell well below community expectations and the standards required under the Corporations Act.\n\nOutput:\n{\n \"primary_tag\": \"Financial Penalty\",\n \"primary_confidence\": 0.96,\n \"primary_reasoning\": \"An explicit $240 million monetary fine was imposed by ASIC on a named financial institution for identified regulatory breaches.\",\n \"secondary_tag\": \"Enforcement\",\n \"secondary_confidence\": 0.93,\n \"secondary_reasoning\": \"Mandatory inheritance: Financial Penalty is a child of Enforcement, so Enforcement must be raised as the secondary tag even though the Supervision parent also applies.\"\n}\n\n--- Example 3 ---\n\nInput:\nTITLE: UK Cyber Security and Resilience Bill mandates two-stage incident reporting\n\nBODY:\nThe UK Cyber Security and Resilience Bill (2026) mandates two-stage incident reporting: 24-hour initial notification and 72-hour full report for all essential financial infrastructure providers. The Home Office has expanded the cyber mandate so that payment firms must now report \u0027pre-positioning\u0027 and ransomware encryption attempts even where service disruption is avoided. Key suppliers, including data centers and managed service providers, must meet the same technical security standards as the financial firms they serve.\n\nOutput:\n{\n \"primary_tag\": \"Cybersecurity\",\n \"primary_confidence\": 0.94,\n \"primary_reasoning\": \"The update mandates cyber incident reporting including ransomware attempts for financial infrastructure providers, which is core cybersecurity regulation.\",\n \"secondary_tag\": \"Operational Resilience\",\n \"secondary_confidence\": 0.78,\n \"secondary_reasoning\": \"The Bill addresses system resilience by extending requirements to key suppliers and mandating incident reporting to ensure service continuity, though the primary focus is cybersecurity rather than DORA-style business continuity.\"\n}\n\n--- Example 4 ---\n\nInput:\nTITLE: FCA consults on moving listed companies to UK Sustainability Reporting Standards\n\nBODY:\nThe FCA is consulting on moving listed companies from TCFD to mandatory reporting against UK Sustainability Reporting Standards (UK SRS). These standards align with the ISSB\u0027s S1 and S2, requiring detailed disclosures on climate risks and transition plans. The PRA has also increased expectations in SS5/25, requiring banks and insurers to integrate climate-related financial risks into their risk appetite and capital adequacy assessments, using scenario analysis for \u0027hothouse world\u0027 and \u0027disorderly transition\u0027 models.\n\nOutput:\n{\n \"primary_tag\": \"ESG (Environmental, Social, Governance)\",\n \"primary_confidence\": 0.93,\n \"primary_reasoning\": \"The update concerns mandatory ESG disclosure and sustainability reporting requirements for listed companies and financial institutions.\",\n \"secondary_tag\": \"Governance\",\n \"secondary_confidence\": 0.88,\n \"secondary_reasoning\": \"Mandatory inheritance: ESG is a child of Governance, so Governance must be raised as the secondary tag.\"\n}\n\n--- Example 5 ---\n\nInput:\nTITLE: PRA finalizes Basel 3.1 Output Floor for UK banks\n\nBODY:\nThis policy statement finalizes the UK implementation of Basel 3.1 standards. A core component is the \u0027Output Floor,\u0027 which limits the extent to which banks can use internal models to reduce their capital requirements. The floor ensures that risk-weighted assets (RWAs) calculated via internal models do not fall below 72.5% of the value calculated under the standardized approach. This ensures a consistent baseline of capital adequacy across the banking sector and represents the final step in the UK\u0027s implementation of the post-crisis international standards.\n\nOutput:\n{\n \"primary_tag\": \"Capital Adequacy\",\n \"primary_confidence\": 0.95,\n \"primary_reasoning\": \"The update directly addresses capital buffers and risk-weighted asset floors under Basel 3.1, which are core Capital Adequacy requirements.\",\n \"secondary_tag\": \"Prudential Standards\",\n \"secondary_confidence\": 0.91,\n \"secondary_reasoning\": \"Mandatory inheritance: Capital Adequacy is a child of Prudential Standards, so Prudential Standards must be raised as the secondary tag.\"\n}\n\n---\n\nClassify the following horizon scanning update.\n\nTITLE: Montenegro\u0027s Central Bank Amends Capital Adequacy Rules for Credit Institutions\n\nBODY:\nOn October 8, 2026, the Council of the Central Bank of Montenegro passed a decision amending its Decision on Capital Adequacy of Credit Institutions (OGM 65/25). The amendment is made under the Central Bank of Montenegro Law and the Law on Credit Institutions.\n\nThe decision updates a wide range of definitions and provisions in the capital adequacy framework. It introduces new definitions for crypto-assets, electronic money tokens, asset-referenced tokens, tokenised traditional assets, crypto-asset exposures and crypto-asset services, and adds a definition for large subsidiary undertakings. It also clarifies how investments in own funds instruments are deducted, extends the treatment of undertakings established in the EU and third countries, and sets out how exposures to financial institutions and mortgage-secured exposures are risk-weighted, including for exposures located in other EU Member States or third countries. Several cross-references and wording corrections are made throughout the decision. The changes apply to credit institutions and, in some provisions, to investment firms.\n\nCertain provisions take effect on different dates. One provision, relating to the deduction of investments in own funds instruments, will apply from the day Montenegro accedes to the European Union. The remaining amendments enter into force on the eighth day after publication in the Official Gazette of Montenegro.\n\nCredit institutions operating in Montenegro should review their capital adequacy calculations, reporting processes and internal policies against the revised definitions and risk-weighting rules. Particular attention should be paid to exposures linked to crypto-assets and to mortgage exposures in other EU Member States or third countries, as these areas now have explicit treatment under the framework. Institutions should also plan for the accession-linked change to own funds deductions.\n\nReference: Decision Amending the Decision on Capital Adequacy of Credit Institutions, Central Bank of Montenegro, decision number 0101-7731-2/2026, October 8, 2026." }, "secondary_confidence": 0.91, "secondary_reasoning": "Mandatory inheritance: Capital Adequacy is a child of Prudential Standards, so Prudential Standards must be raised as the secondary tag.", "secondary_tag": "Prudential Standards", "version": "1.1.0" }

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