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Global Weekly Fintech Update

11 October 2020

11 October 2020

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.

Please click here to subscribe to future editions of the round-up.

CLIFFORD CHANCE PUBLICATIONS AND MATERIALS
SPOTLIGHT

As part of its Digital Finance strategy, the EU has recently published a far-reaching proposal for new legislative frameworks creating a pan-European regulatory regime for cryptoassets (MiCA) as well as a digital operational resilience framework for financial services (DORA) We've analysed the MiCA and DORA proposals to understand their impact. Read on to find our high-level overviews, key takeaways for businesses and the next steps for each.

Find out more on what these developments mean for you in relation to MiCA here and DORA here 

GLOBAL LEGAL & REGULATORY UPDATES

International

  • (9 Oct 2020) The Bank for International Settlements, in collaboration with the European Central Bank, the Board of Governors of the US Federal Reserve and the central banks of Canada, Japan, Sweden, Switzerland and England, has published a report setting out common foundational principles and key requirements for a central bank digital currency (CBDC) | Report | Press release
  • (6 Oct 2020) The International Swaps and Derivatives Association (ISDA) has announced the pilot implementation of the Common Domain Model for the clearing of interest rate derivatives using DAML, an open-source smart contract language | Press release​
  • (2 Oct 2020) ISDA report​ on its work towards a digital future for financial markets, including the digitisation of its documentation and the development of data standards

Americas

Canada:       

  • (5 Oct 2020) Bank of Canada analytical note​ on the risks and benefits of an anonymous token-based CBDC

US:  

  • (8 Oct 2020) Attorney General Cyber-Digital Task Force cryptocurrency enforcement framework, which provides an overview of the emerging threats and enforcement challenges associated with increasing use of cryptocurrencies, and the enforcement approach of the Department of Justice, including towards non-US entities | Press release
  • (6 Oct 2020) Antitrust Sub-committee of the House Committee on the Judiciary report on competition in the digital markets, in which it calls for antitrust reforms to address the issues posed by big tech | Clifford Chance briefing

APAC

Philippines:  

  • (5 Oct 2020) Governor of the Central Bank of the Philippines, Benjamin E. Diokno,​ speech​ on the bank's current digitisation developments and initiatives

Europe

EU:  

  • (5 Oct 2020) EU Parliament report​ setting out its recommendations to the EU Commission for a civil liability regime for artificial intelligence.
  • (5 Oct 2020) The EU Parliament has voted to adopt the EU Commission's legislative proposals for a regulation and directive to establish a ​crowdfunding framework. The framework is expected to apply one year after it is published in the Official Journal. | Press release ​| Directive legislative procedure page​ | Regulation legislative procedure page
  • (5 Oct 2020) The Eurogroup, an informal gathering of Eurozone finance ministers, has released its work programme to June 2021, in which it lists the consideration of a CBDC (a digital euro) as one of its priority policy areas | Press release
  • (2 Oct 2020) European Central Bank report ​​​​​on the issuance of a digital euro and the role of virtual currencies within the Eurosystem | ECB digital euro hub | Press release​
  • (2 Oct 2020) European Securities and Markets Authority work programme for 2021, which includes, among other things, a focus on identifying the opportunities and risks posed by financial innovation and achieving a coordinated approach to the regulation and supervision of innovative financial activities and technology | Press release​
  • (Sep 2020) European Parliamentary Research Service (EPRS) study on the European framework on ethical aspects of artificial intelligence, robotics, and related technologies (AI). The study consists of an assessment aiming to evaluate the added value that could potentially be generated for the EU as a result of a joint EU approach to the ethical aspects of AI.

Estonia:        

  • (2 Oct 2020) The Estonian Central Bank, Eesti Pank, has announced the launch of a research project into the infrastructure and technology needed to operate a CBDC | Press release (in Estonian)

France:          

  • (7 Oct 2020) Governor of the Banque de France, François Villeroy de Galhau, speech​ on digital payments, in which he speaks of the EU's current work on stablecoins and CBDCs, including the plans to start testing a retail CBDC

UK:

  • (6 Oct 2020) Financial Conduct Authority (FCA) policy statement in which it bans the sale of derivatives and exchange traded notes that reference certain types of cryptoassets (cryptoderivatives) to retail consumers | Press release​
  • (5 Oct 2020) The FCA has announced it is launching a pilot for a Digital Sandbox, which will support firms in testing innovative products and solutions that are still in development and not yet ready for testing in a live environment (unlike the FCA's existing Regulatory Sandbox, which allows firms to test products and services on real consumers). The FCA is particularly interested in applicants developing innovative solutions to pandemic challenges. | Press release​ | Digital Sandbox webpage

Middle East

Oman:

  • (6 Oct 2020) The Central Bank of Oman has issued a statement warning citizens of the high risks associated with cryptocurrencies, in which it confirms that cryptoassets are not viewed as legal tender in the country and that no institution has been licensed by the bank to offer crypto-related services. | Press release (in Arabic)
Events

Warsaw Perspectives series – Artificial intelligence and third party liability (21 October 2020):
Work on the implementation of clear and comprehensive principles governing third party liability for artificial intelligence in European countries, which has been ongoing for several years, is reflected in the draft regulation drawn up by the Committee on Legal Affairs of the EU Parliament, the implementation of which was recommended to the EU Commission. During the seminar, we will take a closer look at the proposed legal and regulatory solutions and discuss the significance of their implementation, both for the developers of artificial intelligence and for the entities using it. | Please note this seminar will be delivered in Polish, for more information and to register, please contact the Warsaw Perspectives team

Perspectives series – Security token offerings: a global perspective (5 November 2020):
Security token offerings (STOs) involve the offering or issuance of digital tokens to investors using distributed ledger technology (DLT) or blockchain, as an alternative to traditional debt or equity financing options. As the global market for STOs has developed over the last few years, so have the approaches taken by regulators in different jurisdictions. Our panel will consider how STOs can be successfully undertaken across key global financial centres and the risks and regulatory challenges to be aware of. | For more information and to register, see the registration form

Perspectives series – Accelerating digital transformation: turning compliance, regulation and automation to your advantage (17 November 2020):
Earlier this year, Clifford Chance worked with Forbes on a global survey of 300 senior business executives, which explored their approach and attitudes to tech-driven growth. In this webinar we will discuss some of the trends and issues raised by the report – including ethical tech, Board reskilling, tech regulation, the workforce of the future, and AI and big data – and how important these are in a post-COVID-19 world. Our speakers will look at the impact these issues could have over the next decade, and what businesses need to think about now.| For more information and to register, see the 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.

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