By Michelle Chasser and Felix Charlesworth
On 15 September 2017, ASIC released its responses to industry feedback on its consultation Report 523 (REP 523). As mentioned in an earlier blog, REP 523 sets out the structure and framework for ASIC’s ‘Innovation Hub’ as well as its current and future approach to regulatory technology (RegTech).
In remarks on 6 October: The Bank of England’s FinTech Accelerator: what have we done and what have we learned?, Andrew Hauser (Executive Director, Banking, Payments and Financial Resilience) surveyed the Bank’s current and future contributions to the FinTech regulatory debate.
Mr Hauser predicts that traditional distinctions between regulated and unregulated activities will blur as conventional models of intermediation being progressively ‘unbundled’. He posed questions about judging the appropriate positioning of the regulatory perimeter to ensure that risks are appropriately overseen whilst allowing valuable innovation to flourish. He highlighted a Proof of Concept within the Bank’s accelerator, Enforcd, which examines tools allowing the Bank’s legal team to draw out common trends in publicly available regulatory enforcement actions in order to inform the Bank’s own work.
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By Jim Bulling and Michelle Chasser
On 27 September 2017, Fintech Melbourne in partnership with the UK’s Department for International Trade hosted an event on FinTech regulation with the UK Financial Conduct Authority’s (FCA) Director of Policy David Geale.
Interesting points from the night included:
The Hong Kong Securities and Futures Commission (SFC) launched a regulatory sandbox on 29 September. The sandbox provides a confined regulatory environment for qualified firms to operate regulated activities under the Hong Kong Securities and Futures Ordinance (SFO) before FinTech is used on a fuller scale to the wider public. The SFC emphasises the importance of the integrity of the market and investors’ interests, and says it will not compromise regulatory requirements which are key to investor protection. For example, a qualified firm operating in the sandbox must be fit and proper and must comply with the applicable financial resources requirements.
At the Telegraph Future of FinTech conference in London on 28 September several regulatory-related themes emerged:
On 25 September, Abu Dhabi Global Market (ADGM), the international financial centre (IFC) in Abu Dhabi, via its Financial Services Regulatory Authority (FSRA), announced a Memorandum of Understanding (MoU) with Abu Dhabi Islamic Bank (ADIB). The aim of the MoU is to seek opportunities to collaborate and consult on initiatives to promote the growth and development of the FinTech ecosystem in Abu Dhabi and the United Arab Emirates (UAE). Under its terms, ADIB will partner with the FSRA across a range of Islamic-compliant FinTech-related initiatives. This partnership adds to ADGM’s FinTech commitment through the Abu Dhabi Regulatory Laboratory (RegLab) — a regulatory framework that offers a controlled environment for FinTech innovators to develop and test their products and services with the regulator.
To encourage financial services industry and the related industry to apply innovative technology for enhancing financial accessibility, practicability, and quality, on May 4, 2017, Taiwan’s Executive Yuan proposed the bill called “Financial Technology Innovation Experimentation Act” (the “Bill”) to create its version of “regulatory sandbox.” It would enable experimenting innovative financial technology within a well-defined space and duration under relaxed legal requirements.
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The UK Financial Conduct Authority (FCA) has completed a hat trick of FinTech cooperation agreements with Hong Kong regulators by signing an agreement with the Hong Kong Insurance Authority (IA). This adds to those agreements already signed by the FCA with the Hong Kong Monetary Authority (HKMA) and the Hong Kong Securities and Futures Commission (SFC) on which we have blogged in previous posts.
By Giovanni Campi and Ignasi Guardans
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).
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