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Global Weekly Fintech Update

23 November 2020

23 November 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.

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

CLIFFORD CHANCE PUBLICATIONS AND MATERIALS

Influencer marketing: advertising and marketing on social media in the UK and how brands can suffer reputational damage

Information Commissioner imposes second significantly reduced GDPR penalty: £18.4 million NOT £99 million

UK implements EU content rules through Audiovisual Media Services Regulations 2020

SPOTLIGHT:  
Accelerating digital transformation – turning compliance, regulation and automation to your advantage​​

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, experts from Clifford Chance and Forbes discussed some of the trends and issues raised by the findings 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.

GLOBAL LEGAL AND REGULATORY UPDATES

International

Africa

Kenya:           

  • (12 Nov 2020) Speech​ by Patrick Njoroge, Governor of the Central Bank of Kenya, on digital transformation in Kenya's finance sector

Americas

Argentina:   

  • (11 Nov 2020) Bill 6055-D-2020 (in Spanish) on cryptoassets, which was​ introduced by the Chamber of Deputies and seeks to establish a comprehensive regulatory framework for cryptoassets

Canada:       

  • (​12 Nov 2020) Office of the Privacy Commissioner recommendations​ for regulating AI through amendments to the Personal Information Protection and Electronic Documents Act

Chile:              

  • (11 Nov 2020) The Financial Market Commission has proposed a new Fintech Law, which seeks to provide a legal and regulatory framework for crowdfunding and other fintech activities related to the stock market | Press release (in Spanish)

US:  

  • (17 Nov 2020) White House memorandum to the heads of executive departments and agencies setting out policy considerations to guide regulatory and non-regulatory approaches to AI applications developed and deployed outside of the federal government. The memorandum encourages innovation and growth in AI and outlines non-regulatory approaches to AI, including sector-specific policy guidance or frameworks, pilot programs and experiments, voluntary consensus standards for the private sector and voluntary frameworks.
  • (10 Nov 2020) House of Representatives letter​ to the Acting Comptroller of the Currency, Brian Brooks, in which the House members raise concerns regarding the Office of the Comptroller of the Currency (OCC)'s recent actions in the digital activities space. Among other things, the letter states that the OCC's recent advanced notice of proposed rulemaking on digital assets risks negatively impacting the unbanked and underbanked, and that its interpretive decisions, which authorised financial institutions to hold cryptoassets for their customers, may have significant implications for the future of banking. 

APAC

Hong Kong:

  • (17 Nov 2020) The Hong Kong Securities and Futures Commission and the ISA have signed a memorandum of understanding, under which they agree to cooperate on information sharing, joint innovation projects and referrals of innovative firms seeking to enter one another's markets | Press release | See our table of fintech cooperation agreements for more information and a full list of international agreements.
  • (3 Nov 2020) ​Government consultation​ on legislative proposals aimed at enhancing anti-money laundering and counter-terrorist financing regulations through the introduction of, among other things, a licensing regime for virtual asset service providers, headed by the Securities and Futures Commission. Responses are due by 31 January 2021. | Press release

Kyrgyzstan:

  • (13 Nov 2020) The National Bank of the Kyrgyz Republic has announced it is developing a draft regulatory regime for cryptoasset exchanges | Press release (in Russian)

Singapore:   

  • (13 Nov 2020) The Monetary Authority of Singapore has announced the launch of a SGD 35,000,000 Productivity Solutions Grant, which is intended to help smaller financial institutions adopt digital solutions for more streamlined data reporting | Press release​

Thailand:      

  • (16 Nov 2020) Securities and Exchange Commission (SEC) regulations (in Thai) on net capital requirements for brokerages and securities firms, which have been revised to, among other things, allow firms dealing with digital assets to include the value of those assets when calculating their net capital funds | Press release​ (in Thai)
  • (13 Nov 2020) The SEC has announced it is intending to amend the regulations for ​tokenisation and real estate-backed and asset-backed initial coin offerings in order to more appropriately reflect the nature, form and risk of the products | Press release​ (in Thai)

Europe

Europe:         

  • (16 Nov 2020) Association for Financial Markets in Europe (AFME) report​ on the adoption of emerging and innovative technologies by large investment banks in Europe | Press release​
  • (13 Nov 2020) EU Commission new consumer agenda, which sets out the Commission's priorities and key action points to be taken from 2020 to 2025. On AI/digital transformation, the Commission intends to tackle online commercial practices that prohibit or distort consumers' decision-making processes or abuse their behavioural biases. It also intends to make a legislative proposal in 2021 setting out requirements for AI.
  • (12 Nov 2020) Speech​ by European Central Bank (ECB) President, Christine Lagarde, in which she states that the ECB expects to publish the results of its consultation on the design and issuance of a CBDC in January 2021 and that she personally believes it is likely that the ECB will decide to issue a digital euro
  • (12 Nov 2020) Speech​ by European Banking Authority Chair, Jose Manuel Campa, on the impact, risks and opportunities posed by the use of new technologies in the banking sector.

The Netherlands:      

  • (16 Nov 2020) The transitional period under the Anti-Money Laundering Directive (AMLD5) is due to expire in the Netherlands on the 21 November 2020, after which point, crypto-service providers falling under the scope of the legislation must be registered in order to continue providing their services. The Dutch Central Bank (DNB) has issued a statement announcing that, for several providers, the registration process will not be completed by this deadline, despite its best efforts. The DNB is working to ensure the quick completion of the registration in instances where the applicant is able to meet all the requirements in the short term and will discuss what this specifically entails for each provider on an individual basis. | Press release
  • (13 Nov 2020) Government consultation​ (in Dutch) on a draft Financial Markets Amendment Act 2022, which will amend the Financial Supervision Act to permit payment service providers, e-money institutions and investment firms to use a 'trust-like' account to segregate client's assets and money from their own. Responses are due by 18 December 2020.
  • (3 Nov 2020) Authority for the Financial Markets (AFM) annual trend monitor, which analyses the trends that will affect the Dutch financial sector and its supervision in the coming years. The continuing low level of interest rates, ever-evolving digitalisation and increasing attention to sustainability are the most influential issues according to the AFM. The AFM also highlights that while the trend of fintechs and tech giants moving into financial services might boost innovation and competition for the benefit of customers, some innovations also undermine customers' interests and create new risks and supervisory issues. According to the AFM, these risks and issues include more complex IT risks, the need for closer cooperation between financial and data supervisors, and increasing dependency on tech giants. | Press release

Russia:          

  • (11 Nov 2020) The Ministry of Finance has proposed a set of new amendments to Russia's cryptocurrency laws, which seek to introduce anti-money laundering provisions and clarify the rules around tax evasion | Press release​ (in Russian)

UK:

  • (18 Nov 2020) Speech by the Bank of England Chief Economist, Andy Haldane, on seizing the opportunities posed by the digitalisation of the financial services, particularly with regard to payments by individuals and lending to SMEs

Middle East

Israel:

  • (18 Nov 2020) The Abu Dhabi Global Market Financial Services Regulatory Authority and the Israel Securities Authority (ISA) have signed an innovation and fintech memorandum of understanding, under which they seek to promote innovation in financial services in both jurisdictions and achieve greater connectivity, information exchange and market access for innovative start-ups, talent and investment between the two jurisdictions | Press release | See our table of fintech cooperation agreements for more information and a full list of international agreements.
  • (17 Nov 2020) The Hong Kong Securities and Futures Commission and the ISA have signed a memorandum of understanding, under which they agree to cooperate on information sharing, joint innovation projects and referrals of innovative firms seeking to enter one another's markets | Press release | See our table of fintech cooperation agreements for more information and a full list of international agreements.

UAE:

  • (18 Nov 2020) The Abu Dhabi Global Market Financial Services Regulatory Authority and the Israel Securities Authority (ISA) have signed an innovation and fintech memorandum of understanding, under which they seek to promote innovation in financial services in both jurisdictions and achieve greater connectivity, information exchange and market access for innovative start-ups, talent and investment between the two jurisdictions | Press release | See our table of fintech cooperation agreements for more information and a full list of international agreements.
CLIFFORD CHANCE EVENTS

Clifford Chance International Festival of Fintech (30 November – 4 December 2020):
We are delighted to invite you to the Clifford Chance International Festival of Fintech, a week long series of insightful webinars on the rapidly changing world of financial technology, featuring multiple expert panel discussions and fireside chats with industry leaders. We will explore and debate the biggest questions, challenges and trends in fintech, sharing the latest insights from Clifford Chance and industry experts across the globe to help your business embrace the opportunities and manage the risks. | For more information and to register, see the event webpage

Tech policy in 2021. What are the trends and what's going to happen? (2 December 2020):
We are delighted to invite you to a panel discussion on the major trends and political risks in the tech policy space and our predictions for 2021. Join our panellists – Jonathan Kewley, Samantha Ward and Phillip Souta from Clifford Chance, Edward Bowles (Director of Public Policy at Facebook), Tom Standage (Deputy Editor of the Economist and co-host of the "Secret History of the Future" podcast) and Dr Carissa Véliz (Associate Professor at the Faculty of Philosophy and the Institute for Ethics in AI, and a Tutorial Fellow in Philosophy at Hertford College, Oxford University) – as they explore some of the biggest issues in tech policy right now: big tech vs governments, east vs west, emerging litigation, supply chain and vendor risks, privacy intrusion, mass surveillance, AI bias, trade and tech and more. | For more information and to register, see the event webpage

Perspectives series – Data claims in the UK and Europe: scaling the risk (15 December 2020):
Since it came into force in 2018, GDPR has led to a significant increase in collective data claims worth billions of euros. Our specialists will provide an update on the most active jurisdictions, including the UK and the Netherlands, and an overview as to how courts in the UK and across Europe are starting to grapple with the key question, 'what is our personal data worth?' | For more information and to register, see the registration form

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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.