On 2 April 2019, the European Commission announced the launch of the European Forum for Innovation Facilitators (“EFIF”). The EFIF will serve as a joint platform designed to foster collaboration and experience sharing among European financial supervisors on their engagement with FinTech firms through sandboxes and innovation hubs. On an ad-hoc basis, the European Supervisory Authorities (“ESAs”) and EU Member States’ National Competent Authorities (“NCAs”) will also be joined by third-countries’ authorities to exchange best practices, identify regulatory obstacles and share knowledge.
The EFIF is expected to contribute to the creation of a favourable environment for FinTech and to enable innovative firms to scale-up across the EU single market. As envisaged by the Commission’s 2018 FinTech Action Plan, the ultimate objective is to ensure competitiveness of the European financial sector by turning Europe into a hub of financial innovation.
The establishment of the EFIF follows the recommendations set out in the 2019 ESAs’ joint report on regulatory sandboxes and innovation hubs. The ESAs mapped the existing EU initiatives and reported that there are currently 5 operational regulatory sandboxes and 21 innovation hubs in the EU. Besides a joint platform for these innovation facilitators, the ESAs suggested the development of guidance on their cooperation.
The recently agreed changes to the ESAs’ mandates in their founding regulations should provide a further push to ensure regulatory convergence and facilitate the uptake of FinTech. In addition to the coordination role, the ESAs will have to take account of all issues related to technological innovation when carrying out their supervisory and regulatory mandates.