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Payments & FinTech Lawyer

Volume: 11 Issue: 9
(September 2017)


A Report published on 22 August 2017 assessing the impact of FinTech firms on financial services, which is the culmination of three years’ research prepared by the World Economic Forum in collaboration with Deloitte, has found that FinTechs have materially changed the basis of competition in financial services, but they have not yet materially changed the competitive landscape. The Report entitled ‘Beyond Fintech: A Pragmatic Assessment of Disruptive Potential in Financial Services,’ states that although FinTechs have defined the direction, shape and pace of innovation across almost every subsector of financial services and have reshaped customer expectations, FinTechs have fallen short when it comes to customer willingness to switch from using incumbent services and that FinTechs have struggled to create new infrastructure and establish new financial services ecosystems. / read more

The Australian Government published on 17 August 2017 proposed amendments to the country’s anti-money laundering (‘AML’) and counter terrorism financing (‘CTF’) laws, with digital currency exchanges to be included for the first time. / read more


The biggest change in retail banking in the UK is in full swing. The Open Banking initiative is set to make the market increasingly diverse and competitive, with new companies breaking the mould of the traditional banking business model. In the last few years we have begun to see new mobile-only banks such as Starling and Monzo disrupting the market and attracting digitally savvy consumers. Non-bank service providers such as PayPal are also eating into the marketshare of incumbents when it comes to payments. For these new entrants, Open Banking is an opportunity to provide innovative services, such as developing apps that provide customers with enhanced insight into their spending habits and products. John Salmon, Partner at Hogan Lovells LLP and Member of the Payments & FinTech Lawyer Editorial Board, provides an update on the Open Banking journey so far and explains his view that the way in which the Revised Payment Services Directive has been drafted and the significant amount of time spent debating the draft Regulatory Technical Standards on Strong Customer Authentication has not helped industry obtain a clear picture of what will be required of them. / read more

In its ruling on 25 July 2017, the United States Securities Exchange Commission (‘SEC’) stated that US securities laws may apply to offers, sales, and trading of interests in virtual organisations and applied the test set out in SEC v. W.J. Howey Co. (the ‘Howey Test’) to determine whether a digital token issued by a virtual organisation named The DAO constituted a security under US securities laws (it found that it did) (the ‘SEC Ruling’). On 1 August 2017, in the wake of a recent surge in the number of initial coin (or digital token) offerings (‘ICOs’) held out of Singapore as a means of raising funds, the Monetary Authority of Singapore (‘MAS’) followed the example of the SEC by making an announcement (the ‘MAS Announcement’) on its position with respect to digital tokens and offerings thereof in Singapore, as Jeffrey Maddox, Ben Witherall and Nicholas Dimitriou of Jones Day, explain. / read more

Gareth Malna of Burges Salmon LLP analyses the UK Government’s response to its consultation on the implementation of the Revised Payments Services Directive (‘PSD2’) into UK law, including by noting the key changes and other related developments from the Financial Conduct Authority. / read more

The use of algorithms to sift through huge datasets to locate opportunities therein, benefits FinTech companies and helps create a dynamic competitive environment in the FinTech sector. But the use of such technology has implications for competition law, which cannot fully keep up with these technological developments. Miles Trower and Molly Efford of TLT LLP discuss practices such as the use of algorithms by FinTech businesses to update pricing intelligently and how such practices interact with competition law, and consider whether competition law needs to be amended to cover such practices. / read more

The Australian Government is acting to remove the double taxation of digital currency within the country, drafting new measures and releasing explanatory material. As Michael Barnett and Adele Brusco of PwC Australia explain, the move is part of the Government’s efforts to strengthen the Australian FinTech sector; here, Michael and Adele discuss the draft legislation, what it means for digital currencies and the possible impact on the Australian FinTech sector. / read more

The European Banking Authority (‘EBA’) published on 7 July 2017 its Final Guidelines on Professional Indemnity Insurance under the Revised Payment Services Directive (‘PSD2’), which set out the criteria on how the minimum monetary amount of professional indemnity insurance (‘PII’) or other comparable guarantee for payment initiation services (‘PIS’) and account information services (‘AIS’) should be stipulated. However, in the view of Arun Srivastava and Nina Moffatt of Baker McKenzie, the crucial question of whether the insurance will cover the range of risks that payment initiation service providers and account information service providers may be exposed to has not quite been answered. / 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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