Technical update

AI

The chair of the Financial Stability Board has warned that frontier AI models pose a significant cybersecurity risk. Speaking as AI developers themselves have highlighted the potential risks posed by this tech, Andrew Bailey has called on authorities to take ‘appropriate steps’ to support safe and responsible releases and deployment of AI models. He also wants financial institutions to ensure they have ‘robust response and recovery capabilities’ and relevant cybersecurity resilience among critical third-party providers.

Cybersecurity

The International Organisation of Securities Commissions and the Bank of International Settlements’ committee on payments and market infrastructures have published guidance on boosting cybersecurity for financial market infrastructure. Cyber Resilience Toolkit: Practical Considerations for FMIs and the discussion paper FMIs’ Reliance on Third-Party Service Providers: Challenges and Risks offers practical advice on cyber resilience.

Accounting standards

An International Accounting Standards Board (IASB) survey will promote understanding of how investment professionals use cashflow information when analysing financial statements of financial institutions. The survey will boost IASB research on possible exemptions for financial institutions from presenting cashflow information in their financial statements.

The IFRS Foundation Trustees are consulting on changes to the trust’s constitution that will reduce the number of board members running the IASB and the International Sustainability Standards Board (ISSB) to 10. The changes will also reform how these boards make decisions and mandate attributes held by members.

The ISSB is opening an office in Geneva, Switzerland, during 2027, boosting its multi-location model, with bases already including Beijing, Frankfurt, Montreal, London and Tokyo. With more than 45 jurisdictions using ISSB standards and, by 2027, companies in 18 jurisdictions issuing ISSB-based reports, the board says existing funding agreements and revenue streams will finance its activities to 2031, by when it expects to secure a long-term funding model.

Auditing and assurance

The International Auditing and Assurance Standards Board (IAASB) is offering a targeted public consultation system for financial statement users commenting on proposed changes to its standards. For example, a new IAASB User Consultation Survey is requesting views on planned changes to ISA 330 (auditor’s responses to assessed risks); ISA 500 (audit evidence); and ISA 520 (analytical procedures), without addressing all consultation issues.

Ethics

The IAASB and the International Ethics Standards Board for Accountants have also issued their joint 2025 annual report.

Sustainability

EFRAG (the European Financial Reporting Advisory Group) has released a 2026 draft datapoint list for the updated European Sustainability Reporting Standards (ESRS), effective this year, following its July adoption by the European Commission. The group said the revised (and rationalised) list was prepared using the same methodology as the 2024 datapoints, with some usability improvements, such as categorisation using distinct data types; and EFRAG references embedded as hyperlinks.

EFRAG has also launched a survey aiding a cost-benefit analysis of draft ESRS for certain non-EU undertakings to help balance the group’s advice on the proposals to the European Commission, which must authorise these requirements.

The Global Reporting Initiative (GRI) has released Vietnamese language versions of all its sustainability reporting standards, including revised GRI universal standards, new topic standards for biodiversity, climate change and energy, and all GRI sector standards.

European Union

The European Commission has released guidelines helping large companies determine whether they have a dominant position in the European Union (EU) market and hence must not unfairly exclude competitors (in line with article 102 of the EU treaty). The advice follows EU case law in explaining how to identify and analyse such commercial behaviour.

The EU Council of Ministers has approved an overhaul of EU customs rules, clarifying that non-EU e-commerce platforms be considered a goods importer when selling into the EU and hence responsible for customs formalities and duty payments, rather than EU consumers.