Archive:January 2018

1
Hacking of digital currency exchange leaves Japanese company footing the bill
2
Open Banking: UK Parliamentary Roundtable
3
Digital currency exchange providers, do you need to register with AUSTRAC?
4
UK Islamic FinTech Panel Launched
5
CFPB Expects to Further Delay Prepaid Account Rule’s Effective Date
6
Qatar and Islamic FinTech
7
Is Bitcoin Islamic-compliant?
8
Top 5 regulatory changes to watch for in 2018
9
New Report on UK Alternative Finance
10
Comptroller Otting: A New Ally for a FinTech Charter?

Hacking of digital currency exchange leaves Japanese company footing the bill

By Cameron Abbott and Allison Wallace

Coincheck – one of Japan’s largest digital currency exchanges – says it will repay hundreds of millions of dollars’ worth of virtual money, after hackers broke into its network, stealing a reporting 58 billion yen (AUD660 million) worth of NEM (a cryptocurrency like Bitcoin).

Hackers broke into the Coincheck network early Friday morning, but it wasn’t discovered until nearly eight and a half hours later. Read More

Open Banking: UK Parliamentary Roundtable

By Jonathan Lawrence

The UK All Party Parliamentary Group (APPG) on FinTech and APPG on Alternative Lending will be hosting an invite-only roundtable on Open Banking, taking place on 31 January from 9:00-10.30am at the Houses of Parliament.

Open Banking went live in the UK on 13 January.  From this date, the high street banks were required to make their customers’ bank transaction data available to third party businesses when instructed to do so by the customer. This is the first major milestone in a multi-year programme to open all payment products to the market for financial services. Over time, it is expected to revolutionise the way consumers and small businesses use and access financial services.

Open Banking was the main remedy mandated by the UK Competition and Markets Authority (CMA) following its investigation into the supply of personal current accounts and banking services in 2016. The CMA concluded that UK banks do not compete hard enough for customers’ business; and that technology should be employed to enable customers to compare and access better deals from new providers.

The Roundtable will be an opportunity to hear the latest from the Trustee of Open Banking, Imran Gulamhuseinwala, two weeks after the new services went live; and to raise any concerns about the potential for consumer detriment. You can register your interest here.

Digital currency exchange providers, do you need to register with AUSTRAC?

By Jim Bulling and Michelle Chasser

Australian anti-money laundering regulator AUSTRAC has released draft AML/CTF Rules for consultation following recently passed amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act which expand Australia’s AML/CTF regime to digital currency exchanges. The amendments will come into effect from the date of Proclamation which is expected to be 1 April 2018.

Under the amendments exchanging digital currency for money (whether Australian or not) or exchanging money (whether Australian or not) for digital currency, where the exchange is provided in the course of carrying on a digital currency exchange business will attract obligations under the AML/CTF regime. Notably, exchanging one digital currency for another will not be regulated.

Read More

UK Islamic FinTech Panel Launched

By Jonathan Lawrence

An independent group of Islamic Finance and FinTech practitioners came together on 24 January for the inaugural meeting of the UK Islamic FinTech Panel. The panel aims to create momentum in the Islamic FinTech sector by building on London’s position as a global FinTech hub and as a recognised centre for Islamic Finance.

The panel will be chaired by Harris Irfan, MD of Cordoba Capital, an Islamic Finance and Islamic FinTech advisory boutique. Irfan was previously CEO of Deutsche Bank’s Islamic Finance subsidiary, Global Head of Islamic Finance at Barclays and Head of Investment Banking at Rasmala Group. A recent white paper on the Islamic Finance sector, published by Cordoba Capital and IslamicBanker, promoted the idea of an Islamic FinTech panel as a means to build a community to work alongside existing public sector infrastructure in order to provide support to sharia-compliant FinTech companies. If you would like a copy of the white paper, please contact Jonathan Lawrence.

Read More

CFPB Expects to Further Delay Prepaid Account Rule’s Effective Date

By Eric A. Love

On December 21, 2017, the Consumer Financial Protection Bureau (CFPB) issued a statement providing a status update about its comprehensive final rule amending the implementing regulations for the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z) as applied to prepaid accounts (Final Rule).

The Final Rule extends Regulation E protections to prepaid accounts, thus requiring financial institutions to give consumers easy access to account information, investigate and resolve erroneous charges, and limit consumer liability for unauthorized charges in certain circumstances.  In addition, the Final Rule applies Regulation Z protections to prepaid accounts that are linked to credit products.  The Final Rule also sets forth certain requirements concerning disclosures and account terms posting and submission.

Read More

Qatar and Islamic FinTech

By Jonathan Lawrence

In the Qatar Islamic Finance Report “Expanding Horizons”, Islamic FinTech regulation and support are considered. The report is a joint venture of the Qatar Financial Centre (QFC), Thomson Reuters and the Islamic Research and Training Institute (IRTI). The report notes that the FinTech industry in Qatar remains very small. As a part of its efforts to support the Qatar National Vision 2030, the QFC held a Fintech event in January 2017. The report concludes that Islamic FinTech could be supported in three ways:

Read More

Is Bitcoin Islamic-compliant?

By Jonathan Lawrence

In a recent research paper, Mufti Faraz Adam has considered whether Bitcoin is Islamic-compliant. This is an important area of interest given the growing Islamic finance market which is expected to be worth more than US$6.5 trillion by 2020. The paper examines whether Bitcoin is money, a commodity or something else entirely.

Read More

Top 5 regulatory changes to watch for in 2018

By Jim Bulling and Michelle Chasser

As one year has drawn to a close it is time to look forward to 2018 and our tips for the most important 5 regulatory changes for the FinTech industry in Australia.

  1. Increased access to bank data.

The Government has announced its intention to introduce an open banking regime in Australia under which customers will have the ability to give third parties such as FinTechs access to the customer’s banking data. Treasury is currently conducting a review into open banking models, with the report which was due at the end 2017 yet to be released.

Also planned to come in to effect by 1 July 2018 is mandatory comprehensive credit reporting which will give lenders access to deeper and richer sets of data on consumers to base their credit decisions on. Comprehensive credit reporting is currently voluntary.

Read More

New Report on UK Alternative Finance

By Jonathan Lawrence

The Cambridge Centre for Alternative Finance sits within the University of Cambridge Judge Business School and has recently published its 4th UK Alternative Finance Industry Report entitled “Entrenching Innovation”.  The Centre defines alternative finance as financial channels and instruments that emerge outside of the traditional financial system (i.e. regulated banks and capital markets).

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Comptroller Otting: A New Ally for a FinTech Charter?

By Dan Cohen

The FinTech charter may have an important new, if tepid, ally: U.S. Comptroller of the Currency Joseph Otting. Speaking at a press conference on December 20th, Comptroller Otting signaled a cautious openness to the charter, stating, according to various media outlets, that although he is “not sure what it [FinTech charter] looks like and how it’s funded…there’s a space there that a technology solution can solve.” The key question to him is “what is the requirement…to get that charter”, a topic on which he did not elaborate.

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