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Global Weekly Fintech Round-up

08 March 2021

08 March 2021

Welcome to this week's global fintech round-up, summarising fintech regulatory developments that have happened around the world along with our Clifford Chance fintech publications and upcoming events.

Details of these and previous developments can also be found on our Fintech Topic Guide on the Clifford Chance Financial Markets Toolkit.

You are welcome to share the round-up with colleagues who may like to subscribe.

CLIFFORD CHANCE PUBLICATIONS AND MATERIALS
SPOTLIGHT: 

International Festival of Fintech - Explaining AI and algorithms

Do you understand the scope of the AI-enabled tools that your business is developing or using, and the different audiences that you might need to provide this information to? In this recent online panel discussion, Clifford Chance partners Kate Scott and Megan Gordon explored the rules on AI explanations applicable to financial institutions and fintechs in detail, alongside Simon McDougall, Deputy Commissioner at the UK Information Commissioner's Office and Sarah Carver, Global Head of Digital at Delta Capita.

 

GLOBAL LEGAL AND REGULATORY UPDATES
International 
  • (4 Mar 2021) Bank for International Settlements working paper on central banks' use of big data and machine learning.
  • (1 Mar 2021) International Organization of Securities Commissions work programme 2021-2022, which includes plans to review its standards in light of the Financial Stability Board's recommendations on stablecoins​ and to publish its final report on the use of artificial intelligence and machine learning by market intermediaries and asset managers.
  • (26 Feb 2021) International Monetary Fund working paper on India's approach to open banking and its implications for financial inclusion.

Africa

Nigeria:

  • (26 Feb 2021)​​ Speech by the Vice-President, Professor Yemi Osinbajo, in which ​he confirms his agreement with the recent statements of the Central Bank of Nigeria and Securities and Exchange Commission regarding the potential dangers posed by cryptoassets, but calls on the institutions to regulate them rather than ban them outright.

Americas

US:  

  • (3 Mar 2021) Speech​ by National Credit Union Administration (NCUA) Vice-Chairman, Kyle Hauptman, on regulatory priorities for 2021. Among other things, Hauptman notes the NCUA is considering producing guidance on the treatment of digital assets.
  • (2 Mar 2021) Internal Revenue Service updated FAQs on virtual currency transactions. The FAQs have been revised to clarify that investors do not need to report virtual currencies purchased with fiat currency under the 'virtual currency' question of their Individual Income Tax Return forms.
  • (1 Mar 2021) New York Attorney General investor alert and industry alert on the risks associated with virtual currencies. The alerts warn investors that virtual currencies pose heightened risks and low protection, and warn industry members that if they are dealing in virtual currencies that are deemed commodities or securities under New York law, they must register with the Office of the Attorney General.
  • (26 Feb 2021) Securities and Exchange Commission Division of Examinations statement​ on how it intends to vet digital asset products going forward. Examinations will consider custody arrangements, record keeping, registration requirements and conflicts of interest protocols.

APAC

India:             

  • (28 Feb 2021) Reserve Bank of India report​ on currency and finance 2020-21, which sets out the Bank's assessment of the opportunities and challenges posed by central bank digital currencies.

Thailand:      

  • (2 Mar 2021) Securities and Exchange Commission (SEC) statement (in Thai) on its proposals​ to introduce qualification, experience and income requirements for digital asset investors. In response to the widespread criticism of the proposals, the SEC has stated that its consultation was intended predominantly to test stakeholder sentiment, and brought forward its scheduled investor feedback session from 24 March 2021 to 4 March 2021.

Europe

EU:  

  • (3 Mar 2021) European Banking Authority opinion​ on the money laundering and terrorist financing risks affecting the EU financial sector. The opinion includes an assessment of the risks associated with fintech and virtual currencies.
  • (2 Mar 2021) European Securities and Markets Authority (ESMA) response to the EU Commission's consultation on the European Single Access Point (ESAP) for company information. Overall ESMA supports the proposals but expresses concern about the Commission's current pilot to assess the feasibility of using blockchain to share data for the ESAP. ESMA reminds the Commission that the 'immutable' nature of information on the blockchain might contravene the rights of the data subject.
  • (26 Feb 2021) The European Economic and Social Committee has published three opinions on the EU Commission's digital finance proposals:
  • (25 Feb 2021) EU Parliament draft report (in German) on the EU Commission's proposed regulation on markets in cryptoassets (MiCA). The English language version is expected to be published early in March.

Turkey:          

  • (1 Mar 2021) Statement (in Turkish) posted on the official Twitter account of the Ministry of Treasury and Finance stating it is collaborating on research into cryptocurrencies with the Turkish Central Bank, the Banking Regulation and Supervision Agency and the Capital Markets Board.
CLIFFORD CHANCE EVENTS

Perspectives series: Post GameStop – a fresh look at market behaviour in the digital age (23 March 2021):
In the wake of the social media fuelled trading interest in GameStop and other assets, the focus of regulators is turning to whether this might have involved any breach of securities or commodities laws and whether increased regulation may be required around payments for order flow. Join us for our webinar where we will discuss these issues in the context of UK and US regulation of market behaviour, looking at key differences and what future regulation might involve. | To register, please see the event registration form.

Perspectives series: The shifting global regulatory outlook for stablecoins (25 March 2021):
Stablecoins – privately issued cryptocurrencies designed to have limited price volatility – have received growing attention since Facebook’s announcement of its proposed global stablecoin Diem (formerly Libra) in 2019 and the resulting regulatory backlash. Advocates hail them as an unmatched tool for financial inclusion and limiting financial crime, by linking payments to identity, while critics have concerns around regulatory standards and financial stability. Join us for this online panel session, in which our panellists will consider how the international regulatory response is evolving, how stablecoins can be successfully issued across key global financial centres and the risks and regulatory challenges to be aware of. | To register, please see the event registration form.

Additional Information

This publication does not necessarily deal with every important topic nor cover every aspect of the topics with which it deals. It is not designed to provide legal or other advice. Clifford Chance is not responsible for third party content. Please note that English language translations may not be available for some content. 

The content above relating to the People's Republic of China (PRC) is based on our experience as international counsel representing clients in business activities in the PRC and should not be construed as constituting a legal opinion on the application of PRC law. As is the case for all international law firms with offices in the PRC, whilst we are authorised to provide information concerning the effect of the Chinese legal environment, we are not permitted to engage in Chinese legal affairs. Our employees who have PRC legal professional qualification certificates are currently not PRC practising lawyers.