UK – Page 4 – FinTech and Blockchain Law Watch

UK Government Measures for FinTech – Autumn 2017 Budget

Nov 28 2017

The UK Chancellor of the Exchequer, Philip Hammond, included three measures in his 2017 Autumn Budget on 22 November of interest to the FinTech industry:

Regulators’ Pioneer Fund: The aim is to help unlock the potential of emerging technologies. The new £10 million fund is designed to help regulators to develop innovative approaches aimed at getting new products and services to market.
Tech Nation: To secure the position of the UK in digital innovation, the Government will invest £21 million over the next 4 years to expand Tech City UK’s reach – to become ‘Tech Nation’ – and support regional tech companies and start-ups. Tech Nation will roll out a dedicated sector programme for leading UK tech specialisms, including FinTech and Artificial Intelligence. Regional hubs will be located in: Cambridge, Bristol and Bath, Manchester, Newcastle, Leeds and Sheffield, Reading, Birmingham, Edinburgh and Glasgow, Belfast, and Cardiff.
AI: The government plans to create a new Centre for Data Ethics and Innovation, to enable safe, ethical, and ground-breaking innovation in AI and data-driven technologies. This advisory body is designed to work with the Government, regulators, and industry to help lay the foundations for AI adoption. The Government will also invest over £75 million to progress key recommendations of the independent review on AI, create new AI fellowships, and provide initial funding for 450 PhD researchers.

FCA’s New Consumer Consultation

Nov 13 2017

By Jonathan Lawrence

The UK Financial Conduct Authority (FCA) has launched a new consultation entitled Our Future Approach to Consumers. In the accompanying paper, the FCA recognises that FinTech is bringing new firms into the market and developing far more efficient ways for consumers to save, borrow and invest. The FCA must strike a balance between promoting better outcomes for consumers while not compromising on consumer protection or the standards expected from firms. The FCA also need to set frameworks that ensure markets work well. An example is the New Bank Start-up Unit, run jointly by the Prudential Regulation Authority (PRA) and the FCA. This Unit provides new banks with the information and materials they need to navigate the process of becoming a bank, and tailored supervisory resource during the early years post-authorisation. Since its launch in January 2016, the Unit has helped ten applicants gain authorisation with a range of products, from mobile-only and technology-driven to a new clearing bank, and many new banks have been authorised.

Bank of England continues digital currency research

Oct 18 2017

By Rizwan Qayyum

A researcher at the Bank of England (“BoE”) recently explored the notion and technological requirements of a central bank issuing a digital currency (“CBDC”) and posited it may not be necessary to use distributed ledger technology (“DLT”) for the currency.

Bank of England FinTech Accelerator Lessons

Oct 16 2017

By Jonathan Lawrence

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.

The UK’s Financial Conduct Authority’s David Geale on FinTech regulation

Oct 12 2017

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 FCA has been, and continues to be, actively involved in engaging in dialogue with industry participants, both large firms and smaller start-ups.
As with other global regulators, the FCA is currently focused on blockchain, its potential effect on the market and the FCA’s role. The FCA released a discussion paper on distributed ledger technology earlier this year
The FCA recently issued an initial coin offering consumer alert.
The number of firms applying for the FCA’s regulatory sandbox exceeded initial expectations.
Some of the more interesting concepts that David has seen come through the sandbox put existing technology to a different use such as alternative credit scoring methods (eg using social media) and connected insurance (eg using fitbit data to determine insurance premiums).
Some UK firms have been experimenting with using videos to convey regulatory disclosures.
Digital identity and open banking are areas of interest going forward.

Future of FinTech conference London

Oct 06 2017

By Jonathan Lawrence

At the Telegraph Future of FinTech conference in London on 28 September several regulatory-related themes emerged:

There will soon be more money outside the regulated environment rather than inside, the tipping point is approaching
Currencies are no longer the sole domain of sovereign countries and regulated central banks
Some regulators are competing to attract the industry to their jurisdiction and are generally agnostic about the technology used to deliver the financial service
Open Banking in the UK from 13 January 2018 will usher in a new era of transparency across a UK customer’s whole financial life
Brexit is not a major focus for the UK FinTech industry or its regulators, the biggest challenge is acquiring talent
Using vehicles such as IOSCO to promote regulator cooperation and cross-border regulation for FinTech; genuine common standards are a goal
Financial regulators in many countries are struggling to keep up with the industry due to high workload on other issues and limited resources
Talent is flowing between the industry and regulators
Artificial intelligence, blockchain, PropTech and ICOs were identified as the “hot” areas

FCA’s Hong Kong Hat Trick of FinTech Cooperation Agreements

Sep 25 2017

By Jonathan Lawrence

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.

Islamic Finance News Europe Forum 2017

Sep 19 2017

By Jonathan Lawrence

The Islamic Finance News Europe Forum 2017 took place in London on 11 September. The Forum gave several insights into the Islamic FinTech regulatory space.

Ian Johnson, the Chief Executive of the Dubai Financial Services Authority (DFSA) (the regulator of the Dubai International Finance Centre (DIFC)) spoke at the Forum about his organisation’s approach to regulating the FinTech space. He said that regulators are engaging strongly in the sector, often at the behest of their national governments who are leading the charge as a policy matter. The regulator’s job was to allow innovation whilst maintaining systemic and investor protection.

RegTech and AML: New UK Report

Aug 14 2017

By Jonathan Lawrence

The UK Financial Conduct Authority (FCA) published a report on 2 August entitled “’New Technologies and Anti-Money Laundering Compliance”. The report details findings of three months of research by the authors PA Consulting. The work included over 40 interviews with regulated firms, technology providers, and other bodies. The report sets out respondents’ views on topics such as:

What are the key functions of new and emerging technologies related to anti-money laundering (AML) compliance, and how can they aid compliance activities?
What challenges do firms face in introducing new technologies?
What good practice examples and lessons are available for firms considering new compliance technologies?
What steps could the FCA take to encourage more innovation in AML compliance?

Lord Chief Justice of England and Wales gives thoughts on development of law for digital businesses

Aug 02 2017

By Jonathan Lawrence

In a recent speech, the most senior judge in England and Wales has spoken about the need to keep English law up to date so that it remains the law of choice for digital ways of doing business. The Lord Chief Justice of England and Wales, Lord Thomas of Cwmgiedd, said that some issues could be left to the judges to develop law in the traditional manner, but that this may not be possible for everything that the digital economy can produce. Amongst his thoughts:

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