The European Commission (EC) has published the summary of contributions to its ‘Public Consultation on FinTech: a more competitive and innovative European financial sector’. The consultation, conducted in spring 2017, sought stakeholders’ input to further develop the EC’s approach towards technological innovation in financial services. More than 200 respondents provided their views on FinTech’s legal, regulatory and policy aspects.
Respondents favoured a European Union (EU) policy approach to FinTech guided by the principles of technological neutrality, proportionality and integrity, as well as “same service, same risk, same rule” to ensure a level playing field among market players. The need to maintain an open dialogue between regulators, supervisors and the industry was emphasised. Most respondents expressed broad support for an EU framework for crowdfunding and peer-to-peer financing and convergence across the EU on how supervisors handle licencing, outsourcing, and support for innovation (e.g. innovation hubs).
On RegTech, most respondents called for a supportive policy approach encouraging take-up by industry, improving efficiency and reducing costs. On DLT, issues proposed to be tackled included enforceability of smart contracts; classification of tokens; General Data Protection Regulation (GDPR); securities law and liability rules.
Regarding regulatory barriers to the growth and development of FinTech in the EU, respondents noted, among other issues:
- the lack of harmonised anti-money laundering rules and their diverse interpretations in EU Member States;
- lack of technological neutrality in financial services legislation; and
- the restrictions on cross border flow of data stemming from various national requirements (an issue to be changed by a new Regulation).
Finally, most respondents called for a stronger role of the European supervisory authorities, suggesting coordination of innovation hubs and regulatory sandboxes. The idea of creating an innovation lab at a European level, established by the EC, was greatly supported.