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SEC guidance on roboadvice

Mar 02 2017

By C. Todd Gibson and Michael W. McGrath

The US Securities and Exchange Commission’s staff has published information and guidance for investors and the financial services industry on the fast-growing use of “robo-advisers,” a catch-all term for investment advisers that use computer algorithms to provide investment advisory services online, often with limited human interaction. In light of the unique issues raised by robo-advisers, the SEC’s Division of Investment Management issued a Guidance Update on 23 February 2017 for investment advisers with suggestions on how robo-advisers can best comply with disclosure, suitability and compliance obligations imposed by the Investment Advisers Act of 1940. A second publication, an Investor Bulletin issued by the SEC’s Office of Investor Education and Advocacy, provides individual investors with information they may need to make informed decisions if they consider using robo-advisers.

Paris stepping into London’s FinTech shoes?

Feb 27 2017

By Claude-Etienne Armingaud

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.”

FinTech in Islamic Finance public lecture

Feb 27 2017

By Jonathan Lawrence and Solomon Olukoya

The University of East London Centre for Islamic Finance, Law and Communities held a public lecture on 22 February 2017 focused on FinTech in Islamic Finance. The keynote speaker was Professor Volker Nienhaus, a Professor at the International Centre for Education in Islamic Finance in Malaysia. Professor Nienhaus dealt with four topics:

1. Islamic FinTech and crowdfunding regulations.

Research indicated that only three equity-based and two loan-based crowdfunding platforms were active and Shari’ah compliant in 2016. This was an indication that there was much more room for development in this area. FinTech in many Middle East countries is still unregulated despite recent movements in that direction via sandboxes and other methodologies.

Regulators in the UK and Ontario sign co-operation agreement

Feb 27 2017

By Jonathan Lawrence

Under a new Co-operation Agreement, FinTech businesses in Ontario and the United Kingdom will be able to seek support from their financial regulators as they aim to operate in the other’s market. Signed on 22 February 2017, the agreement allows the Financial Conduct Authority (FCA) and the Ontario Securities Commission (OSC) to refer to one another innovative businesses seeking to enter the other’s market. The regulators may provide support to innovative businesses to help reduce regulatory uncertainty and time to market.

The Agreement follows the creation of the FCA’s Innovation Hub in 2014 and the OSC’s OSC LaunchPad in October 2016. These initiatives are designed to help businesses with innovative ideas navigate the regulatory framework, support them through authorisation and facilitate their engagement with their respective regulator. The FCA and OSC have also committed to share information on emerging trends and regulatory issues pertaining to innovation in financial services.

Asia Pacific Alternative Finance Industry Survey launches

Feb 24 2017

By Jonathan Lawrence

The University of Cambridge, Monash Business School and Tsinghua University have launched the 2016-2017 Asia Pacific Alternative Finance Industry Survey with the support of twenty major industry associations across the region. This is the largest regional study to date focused on crowdfunding, peer-to-peer lending and other forms of alternative finance. Opening on 15 February 2017, this benchmarking survey aims to capture the key trends, developments, size, transaction volume and growth as well as the impact of changing regulations on the alternative finance markets across Asia in 2016.

The impact of Brexit on FinTech

Feb 23 2017

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

UK Government to host International FinTech Conference

Feb 20 2017

By Jonathan Lawrence

The UK Government will host an international FinTech conference in London on 12 April 2017 to attract more investment into the FinTech sector. The International FinTech Conference aims to bring together domestic and international investors and UK FinTech firms. The Conference will feature speeches by senior Government ministers and figures from FinTech, Venture Capital and Financial Services organisations. The conference will include fireside chats, panels and workshops for investors hosted by the UK Government, the Financial Conduct Authority and the British Business Bank. UK FinTech firms will have an opportunity to showcase themselves in an exhibition space and during a pitch session. Firms and potential investors, including Sovereign Wealth funds, family offices and high net-worth individuals should register their interest in attending the conference. It is expected to become an annual event.

The Economic Secretary to the Treasury, Simon Kirby, said: “Backing Britain’s world leading financial services industry is a key part of our plan to ensure the UK remains a great place to do business. The government is determined that London stays at the cutting edge of financial innovation and that’s why we will host a new, annual FinTech conference to boost capital investment in one of our fastest growing sectors. This will bring together hundreds of British FinTech firms and investors from around the world and cement our position as the global FinTech capital.”.

UK conduct rules in the FinTech era

Feb 15 2017

By Jonathan Lawrence

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.

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