Clifford Chance

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.

CLIFFORD CHANCE BRIEFINGS AND MATERIALS

• Talking Tech article – The Data Act: a proposed new framework for data access and porting within the EU
• Clifford Chance podcast – Tech: the good, the bad and the ugly
• Clifford Chance briefing – SEC proposes substantial new cybersecurity regulations for registered investment advisers and funds

GLOBAL LEGAL AND REGULATORY UPDATES

International

• (2 Mar 2022) International Capital Market Association response to the European Securities and Markets Authority call for evidence on the proposed distributed ledger technology pilot regime.
• (1 Mar 2022) The Bank for International Settlements' Innovation Hub and the International Monetary Fund are collaborating with the Cambridge Centre for Alternative Finance and the private sector on a new research initiative, the Cambridge Digital Assets Programme (CDAP). CDAP will focus on establishing the data, tools and insights necessary to study the rapid digitisation of assets and value transfer systems. | Press release | CDAP webpage

Africa

South Africa:  

• (23 Feb 2022) National Treasury report on the 2022 Budget which announces several initiatives relating to cryptoassets and digitalisation in financial markets. These include finalising legislative amendments to align South Africa's regulatory regime with the Financial Action Task Force's recommendations on virtual assets and the publication of a new report from the Intergovernmental Fintech Working Group on the risks posed by stablecoins.

Americas

US:  

• (1 Mar 2022) Federal Reserve Board consultation on a proposed supplement to its May 2021 proposal to introduce guidelines for Reserve Banks, designed to help them evaluate requests for access to their payments systems that come from institutions with novel types of banking charter, such as fintechs. The proposed supplement would introduce a tiered system for evaluating requests depending on the level of risk a firm poses. Comments are due by 15 April 2022. | Press release
• (1 Mar 2022) Final rule issued by the US Treasury Department's Office of Foreign Assets Control under Executive Order 14024. Among other things, the rule prohibits US-based companies and individuals from facilitating cryptoasset transactions to certain Russian nationals and banks.
• (1 Mar 2022) Letter from Senators to Treasury Secretary, Janet Yellen, requesting clarity on the steps her department intends to take to mitigate the risk that Russian oligarchs may use cryptocurrencies to evade sanctions.

APAC

China:            

• (1 Mar 2022) Regulations (in Chinese) issued by the Cyberspace Administration of China, which set out rules for internet information service providers who make recommendations based on algorithms. The regulations include requirements around the governance, review and ethics of the algorithms, as well as the providers' data management and security. The regulations were first published in January 2022 and entered into force on 1 March 2022.

Hong Kong:

• (23 Feb 2022) Speech by the Financial Secretary, Paul Chan, for the 2022-23 Budget. Among other things, Chan notes that the Hong Kong Monetary Authority and the People's Bank of China plan to pilot cross-boundary fintech projects and that the Government will increase funding for the Hong Kong Future Fund with the intention of consolidating Hong Kong's position as a financial, commercial and innovative centre.

Singapore:   

• (25 Feb 2022) The Singapore Ministry of Trade and Industry and the UK Department for International Trade have announced the signing of a new digital trade deal. The agreement is intended to foster the growth of digital trade and the digital economy in both countries and includes commitments to cooperate on fintech, regtech and artificial intelligence (AI) initiatives and to increase and improve flows of financial data. | UK press release | Singapore press release

Thailand:      

• (2 Mar 2022) The Securities and Exchange Commission has announced it has revised its rules regarding the custody of customers' digital assets. The revisions are intended to improve customer protection, including by prohibiting the use of one customer's assets to benefit another and introducing stricter authorisation processes for the withdrawal or transfer of customer funds. | Press release (in Thai)

Europe

EU:  

• (25 Feb 2022) Eurogroup statement on the work being done by the EU Commission and the Eurosystem on the digital euro. The Eurogroup notes that it supports the project and intends to work closely with the Commission and the European Central Bank (ECB) to provide its input on various aspects of the project, with a particular focus on the political implications of a digital euro.
• (25 Feb 2022) ECB presentation on the use cases for a digital euro and the planned next steps for the project.
• (23 Feb 2022) EU Commission proposal for a regulation on harmonised rules on fair access to and use of data. The proposal is intended to make certain data held by companies more easily accessible to other companies and to the public sector. | Clifford Chance summary

UK:

• (3 Mar 2022) The Financial Conduct Authority (FCA) has announced the winners of its 2021 green fintech challenge. Successful candidates include: a firm developing solutions to facilitate clean energy sourcing; a mobile app focusing on green exchange-traded funds; and a software company helping corporates, credit institutions and asset managers measure, disclose and improve their compliance with EU sustainable finance standards. The FCA has also published a case study of a previous successful applicant, Cogo, an app designed to help users understand and offset their carbon footprint. | Press release | Cogo case study
• (25 Feb 2022) The UK Department for International Trade and the Singapore Ministry of Trade and Industry have announced the signing of a new digital trade deal. The agreement is intended to foster the growth of digital trade and the digital economy in both countries and includes commitments to cooperate on fintech, regtech and AI initiatives and to increase and improve flows of financial data. | UK press release | Singapore press release
• (24 Feb 2022) Speech by the Right Honourable Sir Geoffrey Vos, Master of the Rolls, on the opportunities posed by smart contracts.

Middle East

UAE:

• (1 Mar 2022) The Dubai International Financial Centre (DIFC) and the UAE AI Office has announced the launch of a new AI and coding licence. Companies holding the licence will be permitted to operate within the DIFC Innovation Hub, a designated space in the Dubai Future District which was established to encourage collaboration among the region's fintech and innovation companies. | Press release

EVENTS

Global Perspectives Series: Putting digital ethics back on the agenda (29 March 2022):

There is a growing spotlight on ethical principles such as fairness, transparency, accountability and access in tech. As the framework around digital ethics continues to evolve, Clifford Chance Counsel Jamal El-Hindi and Senior Associate Arnav Joshi will sit down with Professor Victoria Nash of the University of Oxford to discuss the hot topics for regulators, where the grey areas exist and how to deal with key ethical considerations. | To register, please see the event registration form.

Warsaw Perspectives Series: Legal, regulatory and product challenges in insurance in light of cybersecurity and new technologies (6 April 2022):

IT systems, artificial intelligence, machine learning and data analysis tools are all being increasingly used by companies in the insurance sector but are also potentially sources of significant risk. Insurance companies and distributors are exposed to the regulatory risk associated with the creation and distribution of insurance products, and their clients to cyber risk and the risk associated with technological service providers. During this seminar, Clifford Chance Counsel Marta Bieniada will discuss how to take advantage of the benefits of technology in a way that is effective and safe for both clients and the firms offering the innovative services. Please note this seminar will be held in Polish. | For more information and to register, please see the event page

Global Perspectives Series: What is the Metaverse? Will it change the world, and why should I care? (26 April 2022):

As a growing number of companies start to invest heavily in the Metaverse, Clifford Chance's panel of experts will consider the practical applications it's likely to have and explore the legal issues that may arise as it grows. With questions of data security, privacy, IP, copyright, antitrust, diversity and ethics starting to be linked to the Metaverse, our experts will analyse whether problems of the real world could take on a new, more worrying dimension in a virtual one. And as global banks start to take a presence in the Metaverse, our speakers will review the implications of a new economy opening up where wealth can be created, traded and enhanced using new digital currencies. | To register, please see the event registration form.