Alessandro M. Lerro, Founder at Lerro & Partners, provides here his opinion on the EU’s proposed Regulation on European crowdfunding service providers for business, published in March 2018. Alessandro reviews first the background and lead-up to the publication of this proposed Regulation, which he views as a missed opportunity; Alessandro explains where the proposed Regulation goes awry, for example in terms of investor protection and restrictions on marketing, and how it could have been done differently. / read more

The Financial Services Commission (‘FSC’) of the Republic of Korea (hereafter ‘Korea’) has published new guidance on preventing money laundering in activities related to virtual currency, the purpose of which is to both further clarify the provisions of a number of AML/virtual currency acts in Korea, and also to provide requirements for financial companies to comply with to effectively prevent money laundering and terrorist financing. You Chull Jung, Partner at Lee & Ko, provides an overview of these guidelines. / read more

After some months of consideration and debate, particularly around the proposed ban therein on ‘screen scraping,’ the European Banking Authority (‘EBA’) has adopted a set of regulatory technical standards (‘RTS’) ‘for strong customer authentication[,] and common and secure open standards of communication.’ The RTS specify the ‘common and secure open standards of communication’ that banks, PISPs and AISPs must use, when they are communicating information for the purposes of the revised Payment Services Directive (‘PSD2’). Chris Finney, Partner at Fox Williams, analyses the RTS and the requirements and potential issues for banks, AISPs, PISPs and card issuers, particularly for those in the UK, given the context of Brexit. / read more

Andrew Galvin and Kate Montano of HWL Ebsworth Lawyers describe here their views on the Enhanced Regulatory Sandbox currently proposed by Australia’s Department of the Treasury. Andrew and Kate believe the Enhanced Regulatory Sandbox corrects many of the shortcomings of the current regulatory sandbox; most critically, payments businesses would be able to access the Enhanced Regulatory Sandbox to issue their own facilities, and that the Enhanced Regulatory Sandbox would, functionally, acclimatise FinTechs to, and ease their passage into, the Australian financial services regulatory environment. However, in this article Andrew and Kate also outline why they believe policymakers in Australia have yet to engage in ‘blue sky thinking’ on the appropriate regulation of FinTech and payments businesses. / read more

Facing increased competition from FinTech initiatives elsewhere in the APAC region, the Hong Kong Monetary Authority (the ‘HKMA’) has now outlined seven initiatives that it hopes will usher in an era of ‘smart banking’ in Hong Kong. These initiatives include proposals for a Faster Payment System and the promotion of virtual banking, as John Casanova - a member of the Payments & FinTech Lawyer Editorial Board - and Gerald Lam, both of Sidley Austin LLP, discuss. / 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

Where traditional banks fail to innovate - or fail to do so fast enough - opportunities are created for newer entrants, such as e-money providers, who are agile enough to take advantage of areas that traditional banks either can’t focus on or areas that they are perceived as having failed to address. Scott Dawson, Commercial Director at e-money and payment regulatory consultancy Neopay, discusses how e-money innovators can and are seizing such opportunities. / read more

On 10 February 2016, Theresa May, the Home Secretary, and Mark Carney, Governor of the Bank of England, announced the launch of a new Joint Fraud Taskforce. The Taskforce has gathered organisations from the public, private and non-profit sectors in the interests of fighting fraud more effectively and raising consumer awareness of the risk of fraud. The foundation of the Taskforce illustrates that the Government believes fraud to be a growing problem that demands a more vigorous response, a response that existing bodies have failed to provide. / read more

Given the growth of crowdfunding in Europe, it could be argued that harmonised EU-wide legislation for the sector could be of great benefit in ensuring a coherent legal approach and helping crowdfunding assist the businesses - typically SMEs - that need it. However, while crowdfunding is certainly on the radar of EU legislators, a harmonised regime has not emerged, and instead several Member States have implemented their own crowdfunding regulations. Tanja Aschenbeck-Florange and Thorge Drefke of Osborne Clarke consider the attitude of EU legislators to crowdfunding so far, as well as the contrasting national regulations that have been developed by a number of EU Member States. / read more

The credit crunch ushered in an era in which many small and medium-sized enterprises (‘SMEs’) have struggled to obtain the finance they need to grow. In particular, traditional lenders such as banks and building societies have been reluctant to lend, mainly due to recapitalising their own balance sheets. The problem facing SMEs has not gone away, but it has encouraged the growth of the UK’s alternative finance sector and different methods of payment. In this article, Bradley Rice of Nabarro LLP briefly considers some of the most popular and growing forms of alternative finance and payments in the UK today. / read more