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Payments & FinTech Lawyer

Volume: 10 Issue: 7
(July 2016)


The implications of the UK’s vote to leave the European Union, on 23 June 2016, could have significant implications for the development of the UK’s FinTech sector. The competitive advantage benefiting payments-related companies based in the UK, which provides them with access to 27 other Member States with a single licence, will no longer be the case as the UK begins its divestiture from the EU. The individual treaties that may be introduced to replace instruments of the internal market will not be clear for some time. / read more

The European Commission (‘EC’) on 5 July 2016 adopted a proposal on further AML rules; inter alia it has implemented its February 2016 Action Plan to bring virtual currency (‘VC’) exchange platforms and custodian wallet providers under the 4th Anti-Money Laundering Directive (‘4AMLD’) and introduce measures on anonymous payments via prepaid cards. / read more

Germany’s competition authority, the Bundeskartellamt, declared on 5 July 2016 that the ‘Special Conditions for Online Banking,’ imposed by the German Banking Industry Committee, are illegal. The jointly agreed rules, which are followed by all banks active in Germany, restrict online banking customers from using PINs and TANs in non-bank payment systems, which the Bundeskartellamt believes impedes the use of innovative non-bank payment solutions. / read more

Lim Hng Kiang, Minister for Trade and Industry and Monetary Authority of Singapore ('MAS') Deputy Chairman announced, on 28 June 2016, that MAS will soon produce revised guidance that will set out its "expectations on the use of cloud computing services" by financial institutions ('FIs'), further to its existing guidance on outsourcing from 2004. / read more

The Payments Strategy Forum (‘PSF’), set up in March 2015 by the UK’s Payment Systems Regulator, published on 13 July 2016 its draft strategy for consultation (‘Strategy’), which puts forward both short and long-term solutions to enhance areas such as payments security, access and innovation. / read more

The UK’s Payment Systems Regulator (‘PSR’) published on 21 July 2016 its final conclusions of its market review into competition in the supply of indirect access to payments systems, noting that while concerns remain in regard to the supply of indirect access, improvements are being made. The PSR will now further monitor and support such developments over the next 12 months and will not for the moment take further action. / read more

A Florida judge has ruled that under Florida law, Bitcoin is not money, in a ruling made public on 25 July 2016 in a case involving money laundering charges against a man, Michell Espinoza, accused of the illegal sale of over $1,500 worth of bitcoin to undercover detectives. / read more

Four banks, including Westpac and Commonwealth Bank of Australia, announced on 27 July 2016 the joint filing of an application to Australia’s antitrust regulators for permission to collectively bargain with Apple over their ability to run their own third party payment apps on Apple devices; currently, only Apple Pay is permitted. / read more


We now know the outcome of the UK referendum - a vote to leave the EU. We are entering uncharted waters as the UK will be the first Member State to exit the EU project in the modern era if the UK triggers the withdrawal process. There are many questions that will need to be addressed in the coming months. Roger Tym and Virginia Montgomery, of Hogan Lovells International LLP, set out some initial thoughts on the possible impact of the referendum result on the current framework for payments in the UK. / read more

The successful growth of FinTech within a region depends on myriad factors, but an unquestionably material one is the regulatory environment. Regulatory regimes that foster innovation and exercise oversight in a purposeful, but fair and reasonably transparent fashion, tend to attract FinTech industry participants. Balancing these goals, however, is hard, and regulators in the US are understandably approaching the task of doing so cautiously. Here, Ben Saul, Matthew Bornfreund and Josh Garcia of White & Case LLP discuss some UK regulatory efforts to encourage bank and FinTech company innovation that have seen initial success in the UK and could translate well to the US system. / read more

The EU Commission (‘EC’) has adopted a legislative proposal for a new Prospectus Regulation (‘PR’). The prospectus framework stipulates the information that firms must make available when making an offer of securities to the public or if its securities are admitted to trading on a regulated market in the EU. Lucy Frew, Head of Financial Regulatory at Kemp Little LLP, discusses the reforms and the possible impact on the alternative finance and crowdfunding sector. / read more

London has established itself as a leading FinTech hub, with support from the UK Government and the Financial Conduct Authority (‘FCA’) for example through the regulation of the peer-to-peer (‘P2P’) lending industry in 2014. Although the recent Brexit vote may, at least, impact on the short-term future of the sector, Angus McLean, Partner at Simmons & Simmons, believes that with the right assistance from Government, the UK’s FinTech sector will still thrive. Here, Angus looks at what has made the UK FinTech sector dominant, the legal roadblocks that stand in FinTech’s way and the motivation behind the launch of Simmons & Simmons’ FinTech fund to support startups. / read more

On 23 June 2016, the US Office of Comptroller of the Currency (‘OCC’) convened a Forum on Supporting Responsible Innovation in the Federal Banking System (‘Forum’) at the OCC headquarters in Washington, DC. The Forum followed the OCC’s white paper issued on 31 March 2016 entitled Supporting Responsible Innovation in the Federal Banking System: An OCC Perspective (‘WP’). Erin Fonte, Member at Dykema and member of the E-Finance & Payments Law & Policy editorial board, and Jacqueline Allen, Associate at Dykema, report on the Forum. / read more

The UK industry body Payments UK released on 17 June 2016 the latest World Class Payments report. This report centres on the provision of open access to payments systems, generally seen as essential by payment service providers (‘PSPs’). The report inter alia explores difficulties encountered by PSPs in accessing payments systems, for example the use of divergent standards and rules between payment systems. Tony Anderson, Partner and Head of Financial Products and Payments at Pinsent Masons, discusses the report and its findings, and looks at other developments on the issue of open access to payment systems, such as the UK Payment Systems Regulator’s work in this regard. / read more

About Payments & FinTech Lawyer

The monthly publication covering legal, regulatory and policy developments relating to the fast-moving payments and FinTech sectors. Key topics include mobile payments, e-money, prepaid and other payment cards, online banking, digital currencies such as Bitcoin, card fraud and other cyber crime, RegTech, robo-advice, P2P lending, and crowdfunding, as well as regulatory regimes such as the Second Payment Services Directive (PSD2), the Payment Accounts Directive, and the Fourth Anti-Money Laundering Directive / read more

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