FinTech Industry & Regulation – Page 25 – FinTech and Blockchain Law Watch

UK conduct rules in the FinTech era

Feb 15 2017

The Chairman of the UK Financial Conduct Authority (FCA), John Griffiths-Jones, has delivered a speech in which he talked about conduct rules in the FinTech era. At the Cambridge Judge Business School on 13 February 2017, he talked about current regulatory models being too detailed to keep pace with the emergence of new financial technologies, leaving regulators struggling to cope with the way financial services are delivered.

He said “Rules that were designed for the paperwork era do not work necessarily for the online one. The distinction between advice and guidance, once reasonably clear, has become much greyer with the advent of platforms and the potential of robo-advice. High frequency trading is a million miles from open outcry trading on an exchange. Artificial Intelligence puts the pooling of risk via insurance under pressure as individual odds become increasingly forecastable. An additional challenge comes from the differential pace of take up of new ways of doing things by the general public…”.

IOSCO releases report on FinTech

Feb 15 2017

By Jonathan Lawrence

The International Organisation of Securities Commissions (IOSCO) has released a new report that says that changes resulting from FinTech are testing the boundaries of full disintermediation through the use of technology. IOSCO is the international body that brings together the world’s securities regulators and is a global standard setter for the securities sector. IOSCO develops, implements and promotes adherence to internationally recognised standards for securities regulation. It works with the G20 and the Financial Stability Board on the global regulatory reform agenda.

Singapore fast-tracks the FinTech space

Feb 14 2017

By Nicholas Hanna and Samantha See

Increasingly, early stage start-ups and FinTech businesses are seeing incentives in Singapore as an attractive location to set up shop. Innovative policies to kick start businesses and commerce in Singapore have been developing for the last two years. The increase in FinTech investment coupled with the ramifications of Brexit has now seen a trend of British businesses migrating to Singapore. For example, Aviva, the British insurer, created its second “digital garage” in Singapore. The Chairman of Aviva’s Asian business and head of its digital business has named both London and Singapore FinTech Hubs. He also noted that Singapore is fast-tracking the FinTech sector with innovations such as allowing financial institutions to use cloud infrastructure, helping start-ups to compete with incumbents and giving permission for all insurance products to be sold online.

Found out that you can’t play in the sandbox?

Feb 09 2017

By Jim Bulling and Michelle Chasser

The Australian Securities and Investment Commission’s (ASIC) regulatory sandbox is up and running exempting qualifying businesses from holding an Australian financial services licence or Australian credit licence. There are a number of reasons why a business may not be eligible including:

the business will issue the financial products;
it is likely that there will be more than 100 retail clients
it is likely that the value of the financial products will be more than $5 million;
12 months testing will not be sufficient; or
the financial products the business deals with fall outside the eligible products for the sandbox which are:
- simple managed investment schemes;
- non-cash payment systems issued by a bank;
- listed securities;
- government bonds; and
- unsecured loans.

So what are your options if you don’t meet all the eligibility criteria but don’t want to obtain your own licence?

Switzerland proposes to reduce barriers to market entry for FinTechs

Feb 09 2017

By Jonathan Lawrence

During its meeting on 1 February 2017, the Swiss Federal Council initiated a consultation on amendments to the Banking Act and Banking Ordinance in the FinTech area. The aim is to ensure that barriers to market entry for FinTech firms in Switzerland are reduced and that the competitiveness of the Switzerland as a financial centre is enhanced. The consultation will last until 8 May 2017.

The Future of Active Funds Part 3: How to Get Started with Blockchain

Feb 06 2017

By Tyler Kirk

In this installment of “The Future of Active Funds,” we explore how an active fund can get started with using blockchain technology. As we predicted in Part 2 of this series, 2017 is shaping up as the year blockchain applications will be brought to market, revolutionizing the way securities transactions are executed. As an initial matter, blockchain will reduce the time and cost of settling transactions. Given the cost advantages of passive funds and ETFs over active funds, there is less of an incentive for passives and ETFs to become early adopters of blockchain. However, blockchain is a solution for at least one major problem faced by active fund managers, the inability to compete on a cost basis.

So, what is an easy way for an active fund to get started with blockchain? According to a recent HBR article, a “single-use” implementation is best. Active funds can begin simply by accepting investments in bitcoin and redeeming investors in bitcoin. This will allow the fund’s adviser, board, and service providers to become comfortable with the technology. Further, as we previously posted, experimentation is easy thanks to blockchain cloud services offered by Microsoft, Amazon, and IBM. However, there are legal issues such as appropriate disclosures regarding transacting in bitcoin and custody under § 17(f) of the 1940 Act. For a good primer on the technology, read our article, Blockchain 101 for Asset Managers. Bottom-line, active managers need to have a blockchain strategy or risk being left behind.

New Special Purpose National Bank Charter for FinTech Companies

Jan 31 2017

New York partners Anthony Nolan and Judith Rinearson will be speaking in a Strafford live webinar on “New Special Purpose National Bank Charter for FinTech Companies: Evaluating the Benefits and Regulatory Pitfalls on Thursday, March 16 2017 at 1:00pm-2:30pm EDT. This will focus on a recent proposal by the United States Office of the Comptroller of the Currency (OCC) to consider granting special purpose national bank charters to FinTech companies that are engaged in fiduciary activities or in activities that include receiving deposits, paying checks, or lending money. The special purpose charter offers the benefits of federal preemption and some state licensing requirements. However, there are regulatory and supervisory burdens that must be carefully considered such as activity limitations, BSA/AML requirements and minimum capital and liquidity requirements.

Bank of England Governor delivers wide-ranging FinTech speech

Jan 26 2017

By Jonathan Lawrence

Mark Carney, the Governor of the Bank of England, has given a wide-ranging speech on FinTech which he delivered at the Deutsche Bundesbank G20 conference on 25 January 2017. It was entitled “The Promise of FinTech – Something New Under the Sun?”. Whilst recognising that FinTech’s true promise springs from its potential to unbundle banking into its core function, systemic risks will evolve. The challenge for policymakers is to ensure that FinTech develops in a way that maximises the opportunities and minimises the risks for society. Read More

Top Five Legal Trends for FinTech in 2017

Jan 25 2017

Judith Rinearson and Robert Zinn contributed an article to AmericanLawyer.com on legal trends to watch for in 2017 concerning FinTech. Trends include:

Major political change
Investments and M&A
Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF)
Blockchain & distributed ledgers
Cybercrime and data security

To read the article, click here.

Accenture runs its largest ever fintech accelerator programme in shadow of Brexit

Jan 20 2017

By Cameron Abbott and Allison Wallace

After fielding more than 300 applicants around the globe, Accenture has selected 20 start-ups to participate in its largest ever fintech accelerator programme.

Artificial Intelligence, Blockchain and gamification technology are all key features in this year’s 12-week programme running in London.

By the end of the programme, 8 start-ups will be selected to present at the programme’s Graduation Day to a group of venture capitalists and financial industry executives. All of the start-ups will receive mentorship from representatives of 28 financial institutions.

Accenture’s Tom Graham told Finextra “the transformation requirements that the financial services industry must undertake to remain relevant arguably pose a bigger challenge than the immediate geo-political uncertainty casting a shadow over the industry”.

Category:FinTech Industry & Regulation