Global Weekly Fintech Update
18 January 2021
18 January 2021
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.
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CLIFFORD CHANCE PUBLICATIONS & MATERIALS
Ransomware attacks, or the combination of malicious software (malware) with extortion, have drastically increased and become more sophisticated in the wake of the COVID-19 pandemic, with global damages from ransomware predicted to reach in excess of USD 20 billion in 2021. In addition to costing companies millions of dollars, ransomware attacks have also become a significant source of regulatory and reputational risk, with reports of attacks regular fixtures in international news publications.
To help your business prevent and respond to ransomware attacks we have put together this playbook which details the types of attacks, the best way to defend against ransomware and how to respond if you are attacked, and how Clifford Chance's global tech group cyber security experts can help.
GLOBAL LEGAL AND REGULATORY UPDATES
- (8 Jan 2021) Bank for International Settlements working paper on the impact of investor sentiment in firm-level research and development after periods of intense technological innovation.
- (2 Jan 2021) The Income Tax (Digital Service Tax) Regulations, 2020 enter into force. These Regulations establish a new tax regime focusing on the digital services market, including introducing a 1.5% levy on e-market transactions, such as cryptocurrency payments. | Digital Service Tax factsheet
- (14 Jan 2021) The Financial Crimes Enforcement Network has announced it is extending the deadline for responses to its recent Notice of Proposed Rulemaking, in which it set out proposals to require registered crypto-businesses to hold more customer information, particularly when transacting with self-hosted digital wallets. The comment period was initially fifteen days (ending 4 January 2021), but, following criticism from the sector, it has been reopened and extended for another fifteen days (to 29 January 2021) for comments on the reporting requirements and 45 days (to 28 February 2021) for comments on the recordkeeping and counterparty reporting requirements. | Press release
- (12 Jan 2021) Speech by Governor of the Federal Reserve, Lael Brainard, on supporting the responsible use of artificial intelligence and equitable outcomes in financial services.
- (5 Jan 2021) White House revised charter for its Select Committee on Artificial Intelligence. The Select Committee was originally chartered in 2018 and has been re-chartered under the National Artificial Intelligence Initiative Act of 2020 with a broader scope and membership, to serve as the senior interagency body responsible for overseeing the National Artificial Intelligence Initiative. The charter contains information on the Select Committee’s purpose and scope, functions, membership, and interface with the private sector.
- (5 Jan 2021) Consumer Financial Protection Bureau (CFPB) report setting out its recommendations on ways in which to improve and modernise the legal and regulatory environment for the consumer financial services markets. The report contains a number of recommendations relevant to fintechs, including calling for the introduction of federal charters for fintech companies and opening up their access to the payments system. | Office of the Comptroller of the Currency response to the report.
- (5 Jan 2021) National Information Security Standardisation Technical Committee (TC260) best practice guide (in Chinese) on preventing ethical security risks associated with the use of artificial intelligence. | Press release (in Chinese)
- (13 Jan 2021) European Central Bank (ECB) initial summary of responses to its consultation on the issuance and design of the digital euro. The ECB intends to publish a detailed analysis in the spring, ahead of a decision on the launch of the project. Some institutions have made their consultation responses public, a selection of which are linked below:
- (12 Jan 2021) EU Parliament answer to a question on the EU's proposed regulatory framework for Markets in Cryptoassets (MiCA). Among other things, the answer summarises some of the safeguarding provisions included in the framework and confirms that future central bank digital currencies will not be covered by the framework as they will be deemed a form of public money.
· (12 Jan 2021) Financial Supervision Authority (KNF) statement (in Polish) on the risks associated with the purchase of and trading in cryptoassets, and the KNF's definition of payment, utility and investment tokens, stablecoins, cryptocurrency mixers and cryptocurrency wallets.
- (14 Jan 2021) HM Treasury has extended the deadline for its consultation on proposed insolvency changes for payment and e-money institutions, including a new special administration regime. The deadline for responses has been moved from 14 to 21 January 2021. | Consultation webpage
- (11 Jan 2021) Financial Conduct Authority warning to consumers about the risks of investments advertising high returns based on cryptoassets.
CLIFFORD CHANCE EVENTS
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.