FinTech and Blockchain Law Watch – Page 45 – At the Crossroads of Law, Innovation and Commerce

Regulators in the UK and Ontario sign co-operation agreement

Feb 27 2017

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.

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.

Australian marketplace lending update

Feb 09 2017

By Jim Bulling and Michelle Chasser

In a recent report on licensing applications the Australian Securities and Investment Commission (ASIC) revealed that it has granted 7 Australian financial services licences (AFSL) and 3 Australian credit licences to marketplace lenders between January and June 2016. A further 3 AFSL applications are currently being considered. Previously, 6 licenses were granted between 1 July 2015 and 31 December 2015. This indicates that the number of entrants to the Australian market continues to grow.

Unlike other jurisdictions such as New Zealand, Australia does not have specific marketplace lending legislation. Marketplace lenders have had to adapt to fit within the existing financial services framework. There are a number of business models that can be used to facilitate marketplace lending.