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Payments & FinTech Lawyer

Volume: 11 Issue: 7
(July 2017)


Singapore’s Minister for Finance Heng Swee Keat announced in a speech on 27 June 2017 at the 44th Annual Dinner of the Association of Banks in Singapore that “banks are facing increasing competition from online and non-financial players that have leveraged their large user base to provide digital wallets, payments and remittance services” and as such to enable banks to remain competitive and to embed banking services into the everyday activities of the consumer, the Monetary Authority of Singapore (‘MAS’) will streamline the regulatory requirements for banks seeking to conduct or invest in non-financial businesses that are complementary to their core financial businesses and allow banks to operate digital platforms that match buyers and sellers of consumer good or services, as well as to conduct the online sale of such goods or services themselves. / read more

The European Commission (‘EC’) published on 8 June 2017 its Mid-Term Review of the Capital Markets Union Action Plan (‘Review’), which contains a specific priority action to ‘assess the case for an EU licensing and passporting framework for FinTech activities in Q4 2017.’ / read more


On 20 June 2017 the UK’s Payment Systems Regulator (‘PSR’) published its remedies decision resulting from its ‘Market review into the ownership and competitiveness of infrastructure provision.’ The remedies decision follows the PSR’s final report on the ownership and competitiveness of the central infrastructure that supports the three interbank payment systems, published in July 2016, and here, Miles Trower, Partner and Head of Competition at TLT LLP, evaluates the PSR’s mandated remedies, exploring whether they are likely to bring about radical change and indeed whether they might instead have unintended consequences.  / read more

The Australian Transaction Reports and Analysis Centre (‘AUSTRAC’) has recently published its first ‘Money Laundering and Terrorism Financing Risk Assessment: Stored Value Cards’ (‘SVC Assessment’), which analyses the potential of stored value cards (‘SVCs’) to be used for money laundering or terrorism financing (‘ML/TF’) purposes. In the SVC Assessment, AUSTRAC assesses the ML/TF risk posed by the use of ‘above the threshold’ SVCs1 to be ‘medium’ and the Australian Minister for Justice, Michael Keenan, has stated that “the report serves as yet another tool […] to identify where preventive measures can be strengthened2.” Michael Anastas and Elizabeth Singleton of HWL Ebsworth explain how, while the SVC Assessment highlights certain threats and vulnerabilities on the basis of whether an SVC is ‘above the threshold’ or ‘below the threshold,’ factors such as reloadability, cross-jurisdictional use, ability to load with cash and acceptability all impact on an SVC’s risk rating. With the SVC Assessment identified as a potential catalyst for improvements in measures to combat ML/TF, Michael and Elizabeth ask if an ML/TF risk rating based on the stored value ‘threshold’ test is too broad, and instead whether other SVC features that contribute to the level of risk could serve as the basis for further reform. / read more

The UK’s Financial Conduct Authority (‘FCA’) released a discussion paper in April this year on distributed ledger technology (‘DLT’), with a view to gathering industry feedback on a range of issues connected to DLT, such as operational risks. The paper is notable for what it reveals about how the FCA views its role as regulator at this stage, for instance in the sense that the FCA is interested as to whether DLT will require it to shift its usual ‘technology-neutral’ approach. The paper also touches upon Initial Coin Offerings (‘ICOs’), an area relating to DLT that is attracting considerable attention at present. Robert Courtneidge and Charlie Clarence-Smith of Locke Lord LLP dissect the paper and the issues it raises. / read more

The US Consumer Financial Protection Bureau (‘CFPB’ or ‘Bureau’) issued in 2016 its Prepaid Rule (the ‘Rule’). It is now proposing to make amendments to cover issues that have arisen as industry attempts to implement the Rule; these include amendments on limited liability requirements and pre-acquisition disclosure requirements. Linda C. Odom and Jeremy McLaughlin of K&L Gates discuss the proposed amendments to the Rule and the implications. / read more

The UK’s Financial Conduct Authority (‘FCA’) has now announced the participants in the second cohort of its regulatory sandbox, with the companies involved offering a range of ideas-based payment services and artificial intelligence software. Tim Wright, Partner at Pillsbury LLP, provides an overview of the second cohort and their characteristics. / read more

The date for EU Member States to implement PSD2 into national law is set for 13 January 2018, but in Spain, it currently seems unlikely that this deadline will be met, as the Spanish authorities have only made modest progress towards enacting regulation around PSD2 so far. Still, Jaime Bofill and Pablo de La Fuente, Counsel and Junior Associate respectively at Hogan Lovells, explain here that the eventual implementation of PSD2 could well have a positive impact on the Spanish payments market. / read more

The European Banking Authority (‘EBA’) issued in May 2017 its final draft Regulatory Technical Standards (‘RTS’) and Implementing Technical Standards (‘ITS’) under the Payment Accounts Directive (2014/92/EU) (‘PAD’) setting out standardised EU terminology for the most common services linked to payment accounts, and providing standardised formats for the Fee Information Document and Statement of Fees. Chris Martin of Eversheds Sutherland outlines the RTS and ITS and their importance for payment service providers and consumers across the EU. / 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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