The EU Cross-Border Payments Regulation 924/2009 (as amended by Regulation 2019/518) (EU CBPR) has been “onshored” with significant changes into UK law following the end of the Brexit transition period (i.e., since 1 January 2021). The EU CBPR applied directly in the UK until 31 December 2020. Essentially, the onshored UK CBPR regime only retains the transparency requirements on currency conversion charges under the EU CBPR. This means that UK payment service providers (PSPs) no longer have to comply with other requirements under the EU CBPR.Read More
By Kai Zhang, Special Counsel, London
Changes are coming to the UK payment services regulatory landscape post-Brexit (from 1 January 2021). However, certain Brexit-triggered changes have been put by the FCA on “standstill”, which lasts until 31 March 2022; i.e. during this standstill period, firms can effectively ignore the relevant changes and continue to comply with the current requirements.
We summarise here how the standstill applies to some of the key legislation. Note that this does not cover the changes themselves that have been made due to Brexit.Read More
Despite the lack of announcement by UK Government to give notification to the EU under Article 50 of the Lisbon Treaty of its decision to withdraw from the Union, France is already making its move to move into the steps of the former Fintech capital of Europe. On January 25-26, 2017, more than 1,500 people attended the second edition of the Paris FinTech Forum, encompassing more than 28 countries and 130 companies, from global players to startups.
The irony of the event location, set in the historical venue of the former Paris Stock Exchange building, was not lost to the Bank of France Governor Francois Villeroy de Galhau who wondered “Who would have imagined just a few years ago that a central banker would be speaking at a forum on innovation?” before recognizing that “For banks and insurers, the digital revolution is upsetting the traditional model for client relations” and “there are difficult choices ahead.”
Jacob Ghanty contributed an article to AmericanLawyer.com on the impact of Brexit on FinTech. The article discusses the impact the Brexit referendum is having on FinTech in the UK, including the unresolved issues if financial services businesses lose the ability to “passport” across the EU in light of the vote.
To read the article, click here
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.
The Fintech world is strongly impacted by Brexit, with the ability to access financial markets easily an important factor for disruptors. No doubt they, like many of us, have a keen eye on the speed in which Brexit can occur.
On 3 November 2016, the High Court in the UK ruled that the Prime Minister cannot trigger Article 50 (the notification that triggers the process of the UK leaving the EU) without the leave of Parliament. The decision was appealed, and the Supreme Court (the highest appellate court in the UK) will hear the matter starting today, 5 December. The four days of hearings will be streamed live from the Supreme Court’s website (click here).
There will be eleven justices hearing the matter, which (according to the UK’s non-profit Full Fact organization) will be the largest panel of judges to have heard a single appeal—since the Supreme Court’s predecessor was established in 1876. There are some interesting potential outcomes of this process, including the possibility that the matter will need to be referred to the Court of Justice of the European Union to interpret Article 50.
Please note that even if the Supreme Court sides with the High Court, and decides that the Article 50 notification requires an Act of Parliament, it will still be for Parliament to decide whether or not they want to confirm and continue with the referendum’s Brexit result, or attempt to impose terms on the triggering of Article 50 (which some say is not possible), or reject it altogether. These are interesting times in the UK. We will be watching these developments closely.
A month has passed since the UK referendum vote to leave the European Union. Now that the initial dust is starting to settle, we have set out to examine various potential impacts on the UK FinTech sector. We consider areas including:
- regulation and passporting
- data protection and data sharing
- anti-money laundering and know your customer
- human capital
- the role of banks
- London as a global FinTech centre
- venture capital
For our long form insight piece, please click here.
On 23 June 2016, the United Kingdom will hold a referendum about whether to remain in or leave the European Union. A British exit from the EU has been labelled a “Brexit”.
A recent Financial News poll has showed that the UK FinTech sector is substantially in favour of staying. Financial News surveyed 118 FinTech professionals to gauge their opinion.
More than two-thirds said Brexit would be detrimental to UK FinTech. However, nearly 18% believe it is still unclear what the long-term impact would be. The remaining 13% think UK FinTech would benefit from a decision to leave the European Union.
Often tech talent is sourced from countries such as Bulgaria, Estonia, Hungary, Romania and Slovenia. The ability to access talent was a major concern of some business people interviewed. The other key potential issue is regulation. There’s a circular debate over whether there would be lighter regulation after the UK left the EU, or whether it would be forced to stay in line with the rest of Europe as a price for continued market access. One theory is that the European market – already smaller than the US – would, in effect, be divided in two. US FinTech firms already have the advantage of addressing a bigger market – partitioning Europe would make this advantage greater still.
More than 84% of those who said Brexit would harm UK FinTech said it would make London less attractive for foreign FinTech companies as a location for their European HQ. However, the largest share believes London would maintain its dominance as a FinTech hub. Asked which European cities would most threaten London, 28% answered “none”, closely followed by Berlin, 25%. Frankfurt came third with 15%.
On the other hand, some 13% said the sector would be better off and 18% were undecided. Of those who believe UK FinTech would benefit, 63% thought it would free up resources that could be reinvested in innovation. Some 58% said Brexit would make it easier for FinTech companies to do business with clients in non-EU countries.