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Consumers and service providers should take note of some of the enhanced risks upon an e-money institution’s insolvency.

By Hongbei Li

Technology is rapidly changing the way customers and businesses interact with financial systems. Fintech companies are a driving force behind the disruption of traditional banking and payment services, with regulatory innovation close behind.

In the 12 months to June 2021, electronic money institutions (EMIs) in the UK processed more than £500 billion of transactions, according to Financial Conduct Authority…

Hong Kong’s Core Climate aims to facilitate trading of carbon credits, while the Hub plans to expedite Singapore’s ESG ecosystem growth.

By Farhana Sharmeen, Paul A. Davies, and James Bee

On 28 October 2022, the Hong Kong Exchange and Clearing Limited (HKEX) launched Core Climate, Hong Kong’s International Carbon Marketplace. The birth of Core Climate is a further step toward the growth of ESG initiatives in Asia, which are gaining particular traction among the continent’s stock exchanges.

HKEX…

The latest statements from the government and regulators indicate that Hong Kong is moving forward with enhancing its virtual asset regulatory and legal regime.

By Simon Hawkins and Adrian Fong

The Hong Kong government and the Securities and Futures Commission (SFC) announced their policy stances and further measures to support the development of virtual assets (VA) in Hong Kong at the Hong Kong Fintech Week 2022. Senior government officials and regulators expressed support for Hong Kong to continue to establish…

The agency just revived its dormant authority to supervise nonbank financial entities that it determines pose risk to consumers. 

By Matt Hays, Benjamin Naftalis, Parag Patel, Barrie VanBrackle, and Deric Behar

On April 25, 2022, the Consumer Financial Protection Bureau (CFPB) — the US government agency established under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) and responsible for consumer protection in the financial sector — announced that it is invoking a largely unused legal provision to examine nonbank financial companies that pose risks to consumers.

The HKMA introduces a new data sharing initiative, reported on the central bank digital currency initiative, and outlined regtech plans.

 By Simon Hawkins, Kieran Donovan, and Kenneth Y.F. Hui

The fifth annual Hong Kong Fintech Week conference kicked off with speeches and panels from both Hong Kong and international regulatory representatives, in addition to key market players. Topics explored ranged from the impact and complications of technology and big data to notable technological trends that have emerged as a result of the pandemic.

The proposed regulation will provide greater consumer and investor protection and lessen the risks of participating in digital finance.

By Stuart Davis

The EU Commission has published a proposal for a wide-ranging EU regulation covering cryptoassets and e-money tokens, both of which are currently largely unaddressed in EU financial services legislation.

The draft Markets in Cryptoassets Regulation (MiCA) has been designed to:

  • Increase legal certainty in the area of cryptoassets
  • Support innovation and promote the development of cryptoassets and the wider use of distributed ledger technology (DLT)
  • Instil appropriate levels of consumer and investor protection and market integrity in an area that presents many of the same risks as traditional financial instruments
  • Ensure financial stability

HM Treasury is planning significant changes to the financial promotion regime, including expanding its scope to certain cryptoassets, and amending the approval process for promotions of unauthorised firms.

By Stuart Davis, Sam Maxson, and Anna Lewis-Martinez

On 20 July 2020, HM Treasury published two consultation papers on a regulatory framework for approval of financial promotions and cryptoasset promotions. The consultations propose to establish a regulatory “gateway” that a firm must pass through before it is able to approve the financial promotions of unauthorised firms, and to bring certain types of cryptoassets into the scope of financial promotions regulations.

The Fintech Strategic Review aims to ensure the ongoing growth and success of UK fintech as a world leader in financial innovation.

By Stuart Davis and Anna Lewis-Martinez

On 20 July 2020, HM Treasury announced the launch of an independent review into the UK’s fintech industry to “identify opportunities to support further growth in the sector”.

The Fintech Strategic Review aims to establish priority areas for industry, policy makers, and regulators to explore in order to support the continuing success of the UK fintech sector. The review will be led by Ron Kalifa OBE, the former CEO of Worldpay and non-executive director of the Court of Directors to the Bank of England. According to Kalifa, “Technology has a vital role to play in the UK’s COVID-19 economic recovery. The fintech review will ensure that we can leverage this innovative technology to help consumers and businesses, through a joined-up strategy that combines investment, skills and policy to deliver it.”

Bank for International Settlements selects Bank of England as UK centre to host new fintech hub.

By Stuart Davis, Brett Carr, and Sam Maxson

On 30 June 2020, the Bank of England announced that it had been selected to host a centre of the Bank for International Settlements’ Innovation Hub. The UK centre will support the global central banking and finance community through the development of digital public goods.

Latham Fintech partner Jenny Cieplak discussed consortium governance on a panel hosted by WEF at the Consensus: Distributed Conference.

Jenny Cieplak, a member of Latham & Watkins’ Fintech Industry Group, recently discussed blockchain consortia governance issues as part of a panel hosted by the World Economic Forum (WEF) at the Consensus: Distributed conference. A replay of the panel discussion is available on the Consensus: Distributed website, and the segment focused on consortia governance starts at minute 59.