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Weekly Global Fintech Update

4 October 2021

04 October 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.

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

The new EU regulation on artificial intelligence: 'AI system' = any software?

NFT: the rise of the non-fungible token

KI: Ohne Daten geht es nicht!/AI: It doesn't work without data! (in German)

SPOTLIGHT: 

The latest edition of our Global IP Newsletter takes a look at the increasingly important issue of rights in data. On the subject of monetisation, our German team evaluates the exploitation of data as a 'three-step process' from a European IP and contract law perspective. Our Chinese team gives their insights into the key features of the new Chinese Data Security Law, which aims to strengthen the scrutiny on data compliance requirements. And our Italian team analyses two new publications – the Italian Government's IP strategy, in which it demonstrates its support for digital innovation, and the guidelines on connected cars issued by the European Data Protection Board.

GLOBAL LEGAL AND REGULATORY UPDATES

International

  • (30 Sep 2021) The Bank for International Settlements (BIS) and a group formed by the central banks of Canada, England, Japan, the EU, the US, Sweden and Switzerland have published a series of reports on different aspects of, and considerations around, the development of a central bank digital currency (CBDC). | Press release; Report on system design and interoperability of CBDCs Report on user needs and adoption strategies Report on financial stability implications
  • (30 Sep 2021) Statement from the Chief Executive Officer of the International Swaps and Derivatives Association (ISDA), Scott O'Malia, on cryptoasset-linked derivatives. Among other things, O'Malia announces that ISDA has launched a digital asset legal and documentation working group, which will be responsible for researching and developing standards that appropriately reflect the unique aspects of crypto-derivatives.
  • (29 Sep 2021) BIS Financial Stability Institute report on the current status of big tech regulation. | Press release
  • (28 Sep 2021) BIS report on the CBDC projects of Thailand, Hong Kong, China and the United Arab Emirates (Projects Inthanon-LionRock and mBridge). The report focuses in particular on the benefits of developing a multi-CBDC platform for international payments. | Press release
  • (27 Sep 2021) Speech by the Managing Director of the International Monetary Fund, Kristalina Georgieva, on enhancing digital and global infrastructures in cross-border payments.
  • (24 Sep 2021) Organisation for Economic Co-operation and Development business and finance outlook for 2021. The report focuses on the use of AI in the financial sector, examining what elements determine 'trustworthy' AI and how they function in the areas of finance, competition, responsible business conduct and foreign direct investment. | Press release

Africa

Egypt:

  • (28 Sep 2021) The Financial Regulatory Authority has held a workshop on proposed legislation designed to support the use of suptech, regtech and fintech in insurance and other non-banking financial activities. | Press release (in Arabic)

Americas

Chile:

  • (22 Sep 2021) The Central Bank of Chile has announced it is exploring the creation of a Chilean CBDC for retail payments and interbank settlements. The Bank has established a working group to explore the objectives, requirements and regulatory framework for the CBDC and intends to publish a white paper on its findings in the first quarter of 2022. | Press release (in Spanish)

US:

  • (27 Sep 2021) Bill to require the Treasury Department and other agencies to monitor US cryptoasset mining activity, use cases and global competitiveness, and report on its findings to Congress. | Press release
  • (24 Sep 2021) Letter from Senate Banking Committee Ranking Member, Pat Toomey, to the Securities and Exchange Commission (SEC) Chair, Gary Gensler, in which he calls on the SEC to issue public guidance and ensure regulatory clarity on emerging technologies, such as cryptocurrencies. | Press release
  • (21 Sep 2021) House of Representatives Committee on Financial Services hearing, 'Preserving the right of consumers to access personal financial data', in which witnesses discuss developments in fintech data-sharing and consumers' rights to control their own financial data. | Memorandum | Video

APAC

China:            

  • (24 Sep 2021) Joint statement (in Chinese) issued by the People's Bank of China, the Banking and Insurance Regulatory Commission, the Securities Regulatory Commission and the Chinese Government, announcing a renewed crack-down on cryptoasset activity in China. The statement sets out a list of forbidden activities, which includes the transfer, circulation, mining and exchange of cryptoassets.

Hong Kong:

  • (29 Sep 2021) Personal Data (Privacy) (Amendment) Bill 2021. The Bill, which has been passed by the Legislative Council and will take effect once it is signed by the Chief Executive and published in the Gazette, seeks to criminalise doxing (the publication of a person's personal information without consent, usually online and for malicious purposes). | Bill webpage
  • (27 Sep 2021) Hong Kong Monetary Authority (HKMA) guide on the use of regtech for governance, risk and compliance. The guide is the third issue of the HKMA's new regtech adoption practice guide series, which is intended to provide detailed practical guidance on the implementation of regtech solutions in the banking sector. | Covering circular

Republic of Korea:    

  • (28 Sep 2021) The Government has introduced a conflict of interest rule which prohibits virtual asset services providers (VASPs) and their operators and staff members from trading virtual assets issued by their own platforms or related entities. VASPs are required to establish internal standards to reflect this rule within one month. | Press release

New Zealand:             

  • (30 Sep 2021) Reserve Bank of New Zealand consultation on a draft issues paper on CBDCs. The paper outlines CBDC purposes, designs, and the potential benefits and associated risks. Responses are due by 8 December 2021. | Press release

Thailand:      

  • (30 Sep 2021) Securities and Exchange Commission (SEC) consultation (in Thai) on proposed amendments to the SEC's regulations on electronic data transmission. The proposals cover both third party senders of electronic data and those who prepare data before it is submitted to the SEC, and are designed to clarify the roles, duties and responsibilities of these entities. Responses are due by 28 October 2021. | Press release (in Thai)

Europe

EU:  

  • (30 Sep 2021) Speech by Executive Board Member of the European Central Bank, Fabio Panetta, on the current cyber threat landscape for financial market infrastructures and the role of the Euro Cyber Resilience Board.
  • (29 Sep 2021) European Securities and Markets Authority (ESMA) report on the impact of requirements regarding algorithmic trading, including high-frequency trading, under the Markets in Financial Instruments Directive (MiFID2). | Press release

Germany:    

  • (23 Sep 2021) Speech by Executive Board Member of the Deutsche Bundesbank, Joachim Wuermeling, on the impact that the EU's proposed Digital Operational Resilience Act will have on banks and their supervisors.

Switzerland:

  • (30 Sep 2021) The Financial Market Supervisory Authority has approved, for the first time, a Swiss fund that invests primarily in cryptoassets. | Press release

UK:

  • (29 Sep 2021) The Bank of England (BoE) has issued a series of letters to the CEOs of central counterparties (CCPs), recognised payment system operators (RPSOs), specified service providers (SSPs), and central securities depositories (CSDs) on its expectations regarding material outsourcing to the public cloud. | CCPs letter | RPSOs and SSPs letter | CSDs letter
  • (29 Sep 2021) The BoE and HM Treasury have announced the membership of their CBDC Engagement and Technology Forums. The Engagement Forum consists of senior stakeholders from industry, civil society and academia, and was established to gather strategic input on policy considerations and functional requirements on CBDCs. The Technology Forum engages stakeholders and gathers input on all technology aspects of CBDCs from a diverse cross-section of expertise and perspectives. | Press release
CLIFFORD CHANCE EVENTS

European Perspectives Series: Data exposure knows no borders – trends and challenges across Europe (6 October 2021):

Three years on from the introduction of GDPR, the European Court of Justice (ECJ) is expected to introduce a rule on the materiality threshold on data breaches, while the EU will be introducing a new directive on representative action and regulations on class action. With data litigation likely to be on the rise as a result, a team of Clifford Chance lawyers will be delivering a webinar on the topic. Join our panel of speakers as they discuss the role of the ECJ in strengthening data protection, the different approaches to class action regulations across EU jurisdictions, the impact that the European trend has on the US, and the key drivers for data litigation. | For more information and to register, please see the event page.

Warsaw Perspectives Series: CBDCs and stablecoins – is a revolution in financial markets and payment services approaching? (15 December 2021):

New CBDC solutions are being implemented by central banks, governments and international organisations, and the private sector is developing various types of digital payment instrument as an alternative to fiat currency. Join Clifford Chance Partner, Andrzej Stosio, for a seminar on the fundamental impact these developments may have on global and local financial markets and the legal, regulatory and economic challenges they pose. Please note this seminar will be held in Polish. | For more information and to register, please see the event page.

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. 

Any 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.