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Global Weekly Fintech Update

11 November 2019

08 November 2019

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

To be, or not to be, a Hong Kong Securities and Futures Commission licensed virtual asset trading platform: some of the key regulatory requirements under the new regulatory framework

Asia Securities Industry and Financial Markets Association (ASIFMA) paper on tokenised securities, providing guidance for market participants and regulators (produced in collaboration with ASIFMA members, including contributions from Rocky Mui (Partner, Hong Kong) and Jason Hitch (Registered Foreign Lawyer, Hong Kong) of Clifford Chance)

SPOTLIGHT
Cyber Assist App

Fines for breaching obligations in relation to a cyber attack can be up to 4% of global turnover. The Clifford Chance Cyber Assist App should be your first port of call in a cyber crisis and can help you to manage the risk, outlining the steps which regulators around the world expect you to take in the vital hours and days which follow and connecting you with global cyber specialists from Clifford Chance for urgent assistance – day or night.

GLOBAL LEGAL AND REGULATORY UPDATES

International

  • (6 Nov 2019) International Swaps and Derivatives Association Chief Executive, Scott O'Malia, speech on the use of innovative technologies in the derivatives market
  • (4 Nov 2019) International Organization of Securities Commission (IOSCO) statement on its study of the risks and benefits arising from global stablecoin initiatives and the application to them of IOSCO's principles and standards
  • (31 Oct 2019) The Basel Committee on Banking Supervision announces its intention to publish a discussion paper on the prudential treatment of cryptoassets, to report on open banking and application programming interfaces and to assess the risks posed by the use of artificial intelligence and machine learning in the financial services | Press release
  • (30 Oct 2019) Financial Action Task Force consultation on draft guidance on the use of digital identity systems for customer due diligence | Press release

Americas

Argentina:   

  • (30 Oct 2019) Federal Public Revenue Administration general resolutions 4621/2019 and 4622/2019, which introduce a new value-added tax and income tax withholding regime for activities carried out through electronic wallets to bring their tax treatment in line with that of purchases made on credit and debit cards

APAC

China:            

  • (6 Nov 2019) Government industrial structure adjustment guidance catalogue (in Chinese), which lists the industries that the government wants to encourage, restrict or eliminate. The list has been updated to, amongst other things, remove cryptocurrency mining from the list of industries the government wishes to phase out.

Hong Kong:

  • (6 Nov 2019) Securities and Futures Commission (SFC) Chief Executive Officer, Ashley Alder, keynote speech at Hong Kong FinTech Week 2019 on fintech regulatory developments over the last year and the plans for the future regulation of cryptoassets
  • (6 Nov 2019) SFC position paper on the regulation of virtual asset trading platforms (see Clifford Chance summary)
  • (5 Nov 2019) Hong Kong Monetary Authority (HKMA) circular outlining guiding principles on consumer protection aspects of the use of big data analytics and artificial intelligence by HKMA-authorised institutions
  • (1 Nov 2019) HKMA circular outlining high-level governance principles for the use of artificial intelligence by HKMA-authorised institutions

Republic of Korea:            

  • (31 Oct 2019) The Financial Services Commission (FSC) announces that the National Assembly has passed an act on online investment-linked financing which establishes a legal basis for the operation of peer-to-peer lending businesses and the regulatory oversight role of the FSC. | Press release.

Europe

Europe:         

  • (6 Nov 2019) EU Council Presidency statement on stablecoins, which annexes a draft joint statement on stablecoins from the EU Council and EU Commission.
  • (5 Nov 2019) Association for Financial Markets in Europe paper providing recommendations on the adoption of public cloud computing in capital markets.
  • (29 Oct 2019) European Banking Authority report on potential impediments to the cross-border provision of banking and payment services, with a particular focus on the risks posed by digital solutions. | Press release.

The Netherlands:

  • (7 Nov 2019) Dutch Central Bank article on global stablecoins, in which it notes that the emergence of global stablecoins provides opportunities for making payments faster and more efficient, particularly in the area of cross-border payments. However it calls on public authorities to remain alert and take action where needed, and states that more work must be done to determine whether current laws and regulations are adequate to contain the risks posed by global stablecoins.
  • (22 Oct 2019) The Netherlands Authority for Consumers and Markets (ACM) has launched an investigation (at the request of the country's finance ministry) into the role of big tech firms in the Dutch payments market, which aims to explore whether US-headquartered corporations such as Apple, Google, Amazon and Facebook, as well as Chinese giants such as Alibaba and Tencent, 'are planning on entering' the Dutch payments market. ACM will seek to identify the opportunities for and risks to competition presented by potential penetration of the Dutch payments market by the world's biggest tech corporations. | Press release

Turkey:          

  • (3 Nov 2019) Presidential Program (in Turkish), which, amongst other things, states that the Turkish government should finish testing the national central bank digital currency in 2020

UK:

  • (6 Nov 2019) Financial Conduct Authority (FCA) Director of Innovation, Nick Cook, speech on how the FCA intends to keep pace with technology-led change in the markets it regulates.
  • (1 Nov 2019) HM Revenue & Customs guidance on the tax treatment of cryptoassets. 
CLIFFORD CHANCE EVENTS       

London Perspectives Series: The digital future of finance (12/13 Nov 2019): The Huw van Steenis report on the Future of Finance predicts major changes for the finance industry over the next decade, as the market and regulators adapt to a digital economy. Our experts will discuss what this means for financial institutions and how the Bank of England is looking to shape this transformation through smart data, the responsible use of AI and by responding to new risks. | For more information and to RSVP see the event webpage.

London Perspectives Series: Loan and securitisation transactions - getting smarter? (3/4 Dec 2019): Much buzz surrounds the possibility of using blockchain and smart contracts to replace the role of the middle man and enhance efficiency so reducing the costs in financial transactions. Drawing on our experiences from the US, Europe and London, this session will examine the extent to which lending and securitisation are ripe for this treatment and how far it is already underway. | For more information and to RSVP see the event webpage.

Frankfurt - Legal Revolution 2019 (4-5 Dec 2019) CREATE. DISRUPT. DELIVER. The pace of digital change is rapidly accelerating and has an impact on all sectors, including legal advisory services. On 4 - 5 December, Europe's largest congress and exhibition for legal innovation will take place in Frankfurt, Germany: The Legal ®Evolution 2019. We are proud to be the main sponsor of this trendsetting exhibition and congress for the entire legal department, compliance department and law firm. With us and many other exhibitors, you will learn more about efficient legal processes, legal tech and legal design, and about artificial intelligence, cyber security, data protection, change management and much more. | For more information see the event webpage

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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