August’s Regulatory News

Since 2014, the FCA has been at the vanguard of regulatory activities to foster innovation and reduce the barriers to entry for new products, business models and firms in the financial services industry. 2014 saw the beginning of Project Innovate, and along with the Monetary Authority of Singapore, the FCA was the first regulator to launch a ‘regulatory sandbox’ – a safe space for firms to test innovative products and services with live customers without the need for prior regulatory authorisation.

Earlier this year, in recognition that many of the innovations in FinTech firms are global in nature, the FCA asked stakeholders for their views on the creation of a global sandbox. The latest twist in this innovative tale came earlier this month with the FCA’s announcement that a Global Financial Innovation Network (GFIN) had been created in collaboration with 11 financial regulators and related organizations.

The accompanying consultation paper describes GFIN’s mission as

“a collaborative policy and knowledge sharing initiative aimed at advancing areas
including financial integrity, consumer wellbeing and protection, financial inclusion, competition and financial stability through innovation in financial services, by sharing experiences, working jointly on emerging policy issues and facilitating responsible cross-border experimentation of new ideas”

GFIN will have three main functions – as a network of regulators to promote information and knowledge sharing, provide a forum for joint policy work and discussions and to provide firms with an environment in which to test cross-border solutions. The initial group of organizations involved comprises the following

  • Abu Dhabi Global Market (ADGM)
  • Autorité des marchés financiers (AMF)
  • Australian Securities & Investments Commission (ASIC)
  • Central Bank of Bahrain (CBB)
  • Bureau of Consumer Financial Protection (BCFP, USA)
  • Dubai Financial Services Authority (DFSA)
  • Financial Conduct Authority (FCA, UK)
  • Guernsey Financial Services Commission (GFSC)
  • Hong Kong Monetary Authority (HKMA)
  • Monetary Authority of Singapore (MAS)
  • Ontario Securities Commission (OSC, Canada)
  • Consultative Group to Assist the Poor (CGAP)

All are committed to developing the idea further. However, the FCA is at pains to stress that the eventual membership is still to be determined.

The consultation period ends on 14th October 2018, after which the FCA and the other organizations listed above will consider the feedback and develop a timeline for the launch of the GFIN.