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Global Weekly Fintech Update

13 July 2020

12 July 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.

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CLIFFORD CHANCE PUBLICATIONS AND MATERIALS

Clifford Chance briefing – Working from home: the expectation for technological transformation

Clifford Chance article – Data centres take centre stage

SPOTLIGHT

DLT legal challenges – how do you identify the law governing a token?

In this article we consider key distributed ledger technology (DLT) private international law issues for the derivatives market from an English and Singapore law perspective, including how to identify the legal situs of a token and whether conflict-of-law concerns could hamper adoption of DLT or blockchain for documenting and trading derivatives.This article is a shortened and adapted version of a paper jointly published earlier this year with ISDA, R3 and the Singapore Academy of Law. Click here to read the full paper

GLOBAL LEGAL & REGULATORY UPDATES

International

  • (7 Jul 2020) Financial Action Task Force (FATF) report for the G20 finance ministers and central bank governors on the anti-money laundering and counter-terrorist financing issues relating to stablecoins.
  • (7 Jul 2020) FATF report​ setting out the findings of its review into the implementation of its revised anti-money laundering and counter-terrorist financing standards on virtual assets and virtual asset service providers. | Press release
  • (30 Jun 2020) Bank for International Settlements Economic Adviser and Head of Research, Hyun Song Shin, speech​ on the role of central banks in payments innovation and the increasing global focus on central bank digital currencies.
  • (15 Jun 2020) The World Bank, World Economic Forum and the Cambridge Centre for Alternative Finance survey seeking views on the impact of COVID-19 on the fintech and digital financial services markets. Responses are due by 30 July 2020.

Americas

US:

  • (8 Jul 2020) Commodity Futures Trading Commission strategy 2020-2024, in which it states that developing a regulatory framework to promote responsible innovation in digital assets is one of its key strategic objectives.
  • (2 Jul 2020) Hong Kong Autonomy Act passed by the Senate. The Act seeks to restrict foreign banks and subsidiaries of US banks in Hong Kong from accessing the US dollar system if they have conducted significant transactions with persons or entities that are deemed to be contributing to the weakening of Hong Kong's autonomy. The Act's definition of 'financial institutions' includes 'any person who engages as a business in an informal money transfer system or any network of people who engage as a business in facilitating the transfer of money domestically or internationally outside of the conventional financial institutions system', and is therefore likely to impact the fintech sector. The Act is expected to be signed into law shortly.

APAC

Malaysia:       

  • (8 Jul 2020) Securities Commission Malaysia (SC) notice​, in which it cautions the public against the use of crypto-ATMs. Crypto-ATMs are required to register with the SC for a Digital Asset Exchange licence and, to date, the SC has not authorised any crypto-ATMs to operate under that licence.

Philippines:

  • (1 Jul 2020) Securities and Exchange Commission announcement​ warning the public not to engage in unauthorised crypto-investments and trading

Europe

EU:

  • (3 Jul 2020) European Central Bank working paper on the effects of technological change on financial intermediation.
  • (3 Jul 2020) European Insurance and Occupational Pensions Authority (EIOPA) Chair, Gabriel Bernardino, speech​ on the role of EIOPA's Forum for Innovation Facilitators in supporting consumer-centric financial innovation.

France:

  • (7 Jul 2020) Autorité des Marchés Financiers position paper​ on the future of digital finance in Europe, which summarises its responses to the EU Commission's consultations on the development of a European digital finance strategy, data strategy and approach to artificial intelligence.

Spain:  

  • (1 Jul 2020) Bank of Spain consultation​ (in Spanish) on a draft circular setting out requirements for financial reporting and financial statements for payment and electronic money institutions. Responses are due by 23 July 2020.

UK:

  • (8 Jul 2020) Financial Conduct Authority (FCA) statement on EIOPA's final guidelines on outsourcing to cloud service providers for (re)insurance undertakings, in which the FCA notes it will not apply the guidelines in the UK as they will enter into force after the EU withdrawal transition period. Instead the FCA intends to continue to apply its guidance for firms outsourcing to the cloud and other third-party IT services, first published in 2016 and last updated in 2019.
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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