Global Weekly Fintech Update

09 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

Talking Tech article – California establishes first US data protection regulator: California Privacy Rights Act

Talking Tech article – European Court of Justice renders new Schrems decision on international data transfers: EU-US privacy shield collapses

SPOTLIGHT:

Technology & Ethics - The right thing to do is also the best thing to do

Clifford Chance partner Megan Gordon speaks to Lisa Moyle of FinTECHTalents in one of FinTECH Talents' ongoing series of FTT Chats with the great and good of fintech to discuss innovation, new entrants, and emerging technologies. Megan shares key considerations when it comes to the design and use of technology, including data privacy, discrimination, and how criminals may leverage technology for nefarious purposes. Click here to watch the video in full.

GLOBAL LEGAL AND REGULATORY UPDATES

International

(4 Nov 2020) Bank for International Settlements paper on the fintech landscape in Latin America, as well as its potential opportunities and challenges.
(3 Nov 2020) The International Swaps and Derivatives Association (ISDA) legal guidelines for smart derivatives contracts, focusing on the credit derivatives market | Press release

Africa

South Africa:

(2 Nov 2020) The US Commodity Futures Trading Commission and the South African Reserve Bank have signed a statement of intent to cooperate and support innovation through each authority's fintech hubs (LabCFTC and the SARB Fintech Unit) | Press release | See our table of fintech cooperation agreements for more information and a full list of international agreements.

Americas

Cayman Islands:

(31 Oct 2020) The Ministry of Financial Services has announced the launch of a new regulatory framework for virtual asset service providers (VASPs). The first phase of implementation focuses on anti-money laundering and counter-terrorist financing compliance, supervision and enforcement. The framework comprises the Virtual Asset (Service Providers) (Amendment) Bill 2020, which was gazetted on 29 October 2020 and will be presented at the next sitting of the Legislative Assembly, as well as the following orders and regulations, which were gazetted on 28 October 2020 and enact certain provisions of the Virtual Asset (Service Providers) Law 2020:

The second phase of the framework will cover licensing requirements and prudential supervision and is expected to come into force in June 2021. | Press release

US:

(2 Nov 2020) The Securities and Exchange Commission has amended its offering framework to increase, among other things, the limits dictating how much capital companies can raise through crowdfunding (from USD 1.07 million to USD 5 million) before being required to register | Press release
(2 Nov 2020) The Commodity Futures Trading Commission and the South African Reserve Bank have signed a statement of intent to cooperate and support innovation through each authority's fintech hubs (LabCFTC and the SARB Fintech Unit) | Press release | See our table of fintech cooperation agreements for more information and a full list of international agreements.

APAC

Australia:

(2 Nov 2020) The Reserve Bank of Australia has announced it is launching a project with the Commonwealth Bank, the National Australia Bank, financial services company Perpetual and software company ConsenSys to explore the potential use of a wholesale central bank digital currency (CBDC) based on Ethereum | Press release

China:

(2 Nov 2020) Speech (in Chinese) by President Jinping Xi, in which he states that China should be proactive in helping develop an international regulatory framework for digital currencies and digital tax.

Hong Kong:

(1-5 Nov 2020) Representatives from various regulatory bodies have given speeches at the Hong Kong Fintech Week, including:
- Director of Licensing at the Securities and Futures Commission (SFC), Clara Chiu, who provides details on a new consultation which will seek to expand the SFC's regulatory oversight to cover all centralised virtual asset trading platforms in Hong Kong | Speech (video)
- Chief Executive of the Hong Kong Monetary Authority (HMKA), Eddie Yue, who introduces a new data sharing initiative which will allow the HKMA to launch its own platform to facilitate open banking, and provides an update on the HKMA and Bank of Thailand joint CBDC project (Project Inthanon-LionRock), which is currently focusing on cross-border trade settlement and capital market transactions | Speech (transcript).
- Deputy Chief Executive of the HKMA, Arthur Yuen, who discusses the HMKA's regtech initiatives, including its white paper on transforming risk management and compliance through regtech | Speech (transcript).

Europe

EU:

(4 Nov 2020) European Central Bank Executive Board Member, Fabio Panetta, speech on the advantages and disadvantages of stablecoins.

Gibraltar:

(4 Nov 2020) The Government of Gibraltar has been appointed as an observing member of the Global Blockchain Business Council, with the intention of promoting blockchain adoption across Gibraltar. | Press release

Poland:

(4 Nov 2020) Financial Supervision Authority statement (in Polish), in which it sets out its expectations of firms under its supervision with regard to robo-advice services.

UK:

(4 Nov 2020) Information Commissioner's Office survey on its guidance on explaining decisions made using artificial intelligence which was published in May 2020.
(3 Nov 2020) Letter from the Economic Secretary to the Treasury, John Glen, to the Chair of the House of Lords EU Select Committee setting out the UK's approach to the EU crowdfunding framework, which will not enter into force during the Brexit transition period. Glen states that the Government does not intend to implement similar changes in UK law or come under the Regulation as a third country.
(3 Nov 2020) Financial Conduct Authority policy statement in which it announces changes to limit the risk of disruption to open banking services after Brexit, namely by permitting UK-based third-party providers to use an alternative to eIDAS certifications to access customer account information from account providers or to initiate payments. | Press release
(2 Nov 2020) The Government has extended the deadline for applications for its coronavirus-related 'Future Fund' from 30 September to 31 January 2021. The scheme is intended to help innovative companies and start-ups that are not covered by the Coronavirus Large Business Interruption Loan Scheme (CLBILS). | Future Fund webpage

CLIFFORD CHANCE EVENTS

Perspectives series – Accelerating digital transformation: turning compliance, regulation and automation to your advantage (17 November 2020):
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 we will discuss some of the trends and issues raised by the report – 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. Our speakers will look at the impact these issues could have over the next decade, and what businesses need to think about now. | For more information and to register, see the registration form

Warsaw Perspectives series – New technologies in the insurance industry: legal and regulatory challenges (18 November 2020):
The use of increasingly advanced technologies based on artificial intelligence, machine learning or Big Data analytics tools in the insurance industry requires numerous legal and regulatory challenges to be addressed. During the seminar, we will discuss how to enjoy the full benefits of technological progress in a way that is effective and safe for both our clients and companies providing services based on innovative solutions. | Please note this seminar will be delivered in Polish, for more information and to register, please contact the Warsaw Perspectives team

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

Additional Information

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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.

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.

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