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Global Weekly Fintech Update

24 December 2020

24 December 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

 

Our fintech top 10 most read for 2020:

 

1.     Artificial Intelligence Risk: What does 2020 hold?

2.     Fintech in 2020: five trends to watch

3.     Exploring DORA - The EU's proposed digital operational resilience framework for financial services  

4.     Central Bank Digital Currencies and Stablecoins – how might they work in practice?

5.     Security Token Offerings - a European perspective on regulation | see the equivalent APAC report here

6.     AI and risk for financial institutions

7.     Private international law aspects of smart derivatives contracts utilising distributed ledger technology – English and Singapore law | see the full report published in collaboration with ISDA, R3 and the Singapore Academy of Law here and the NY law version here.

8.     The digital future of syndicated loans

9.     Let's talk crypto – the new EU MiCA Regulation  

10.  As DeFi matures, US financial regulatory questions loom large

 

A bonus mention goes to our number 11 as we've had great feedback on its usefulness:

11. Crypto custody regulation – what rules apply globally?   

 

CLIFFORD CHANCE PUBLICATIONS AND MATERIALS 

Talking Tech article – The ransomware playbook: prevent and prepare – helping to understand and address the risk of a ransomware attack

Talking Tech article – The difficulties and risks associated with transferring social media accounts: protecting a key marketing asset

Talking Tech article – Deepfakes and legal implications: seeing is not believing

Clifford Chance podcast – Talking Tech @ the Singapore Fintech Festival:

Major shifts in artificial intelligence, digital currency and cybersecurity

Green finance, digital ecosystems and inclusion in fintech

 

GLOBAL LEGAL AND REGULATORY UPDATES

 

International

  • (22 Dec 2020) International Organization of Securities Commissions report in which it describes methods that regulators can use to educate retail investors on the potential risks of investing in cryptoassets | Press release
  • (17 Dec 2020) International Monetary Fund (IMF) blog post on recent transformative trends in the financial innovation space, including new types of data sourced from customers' online activities and new channels for communication.
  • (10 Dec 2020) World Economic Forum report on principles and practices that organisations can apply to ensure the ethical use of technology.

Africa

South Africa:

  • (8 Dec 2020) Speech by the Deputy Governor of the South African Reserve Bank, Rashad Cassim, on the current challenges facing fintech firms and the work the Intergovernmental Fintech Working Group is doing to mitigate them.

Americas

US:       

  • (18 Dec 2020) Financial Crimes Enforcement Network (FinCEN) notice of proposed rulemaking, which would require banks and money services businesses to submit reports, keep records and verify the identity of customers for transactions greater than USD 3,000 that use digital wallets not hosted by a financial institution or hosted by a financial institution in certain jurisdictions identified by FinCEN. Responses are due by 4 January 2021. | Press release
  • (16 Dec 2020) A draft act (H.R.8989)​ was introduced to Congress, which would require the Securities and Exchange Commission to conduct a study on the feasibility, benefits and costs of using a distributed ledger system in the post-trade clearing and settlement process 

APAC

China:  

  • (8 Dec 2020) Speech by Party Secretary and Deputy Governor of the People's Bank of China on fintech developments, challenges and supervision in China, including the current focus on big tech in financial services and data ownership

Europe

EU:  

  • (22 Dec 2020) Commission Delegated Regulation (EU) 2020/2176 on the deduction of software assets from Common Equity Tier 1 items under Article 36 of the Capital Requirements Regulation has been published in the Official Journal.
  • (22 Dec 2020) EU Parliament final non-binding resolution, in which it sets out its recommendations to the EU Commission on a digital finance framework to address issues around cryptoassets, cyber resilience, data sharing and customer safety. This resolution was published in provisional form in October.
  • (18 Dec 2020) European Securities and Markets Authority (ESMA) guidelines on outsourcing to cloud service providers, including recommendations regarding monitoring, risk assessments, outsourcing agreements and reporting requirements | Press release​
  • (18 Dec 2020) ESMA consultation​ on the impact of requirements regarding algorithmic trading under MiFID2. Responses are due by 12 March 2021. | Press release

Italy:

  • (19 Dec 2020) The Italian Banking Association (ABI) has announced the launch of a project to test the functioning of a digital euro based on distributed ledger technology. The goal of the project is to assess the technical feasibility of the digital euro and to consider how its use cases might differ from those of existing electronic payments systems. | Press release (in Italian)

Russia:          

  • (18 Dec 2020) Press conference with the Governor of the Central Bank of Russia, Elvira Nabiullina, in which she addresses concerns regarding the impact of the proposed digital ruble on bank liquidity. 

UK:

  • (18 Dec 2020) House of Commons EU Scrutiny Committee report​ on the 2019-21 session, in which it discusses, among other things, the EU's proposed regulations on cryptoassets (MiCA) and on a pilot regime for market infrastructures based on distributed ledger technology, and its proposed directive to amend MiFID2 to clarify the legal position of cryptoassets. The report considers, in particular, the impact of these proposals on the UK, given its exit from the EU.
  • (18 Dec 2020) House of Lords Liaison Committee report​ on the 2019-21 session, in which it examines the progress the Government is making in its implementation of the recommendations made by the Select Committee on Artificial Intelligence in its 2018 report Artificial intelligence in the UK: ready, willing and able?​
  • (17 Dec 2020) HM Treasury supplementary annex to its consultation on proposed insolvency changes for payment and e-money institutions issued on 2 December 2020. The supplementary annex sets out the draft rules that will accompany the regulations introducing a new special administration regime for payments and e-money firms. Responses on the consultation are due by 14 January 2021

CLIFFORD CHANCE EVENTS

 

·     European perspectives tech series – New EU Digital Services Act and Digital Markets Act: the Commission's proposals and what they could mean for you (14 January 2021):
The EU Commission published proposals for new tech legislation in December 2020, the first major overhaul of EU rules for online actors in two decades. Join our webinar to hear some of the top European antitrust, tech and public policy experts from across the Clifford Chance network as they discuss the contents and scope of the proposals, who they affect and what happens next. | For more information and to register, see the event webpage

 

Warsaw Perspectives series – Three years of GDPR – what now? An attempt to assess and determine the perspective for the development of the European privacy protection system (12 May 2021):
The GDPR has become a part of our everyday lives. During this seminar, we will consider what has changed in personal data protection over the last three years, how the financial sector is affected by these changes, to what extent the regulatory authority should use its powers and what other changes are to be expected. | Please note this seminar will be delivered in Polish, for more information and to register, please contact the Warsaw Perspectives team

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.