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For many financial services companies, financial technology (short “FinTech”) and technological innovation in general offer tremendous opportunities in terms of access to finance, operational efficiency, cost savings and competition. On March 8th 2018 the European Commission presented an action plan with a total of 23 measures to make better use of the opportunities offered by technological innovations in the financial services sector. The EU wants to become a global hub for FinTech in the future.
The Action Plan has three main objectives:
- to support innovative business models to scale up across the single market;
- to encourage the uptake of new technologies in the financial sector; and
- to increase cybersecurity and the integrity of the financial system.
The FinTech Action Plan
In order to achieve the above mentioned objectives, the following measures are planned, among others:
- The Commission will operate a FinTech laboratory in which European and national authorities will be able to collaborate with technology providers in a neutral environment.
- Continuation of the already opened EU Blockchain Observatory and Forum. The Forum will report on the opportunities and challenges of crypto assets later in 2018 and is already working on a comprehensive study of distributed ledger and blockchain technologies.
- The use of innovative technologies to interconnect national databases is intended to promote the digitization of information published by listed companies in Europe. In the future, this will enable investors to access essential information in order to make their investment decisions easier.
- In order to improve the exchange of information on cyber security, the Commission will organise regular workshops.
- The Commission will present a best practice guide on regulatory sandboxes based on guidance from the European Supervisory Authorities. A sandbox is a safe and controlled space where FinTech companies can test innovations in the market, with or without regulatory relief.
Regulation on Crowdfunding
In the field of crowdfunding, the European Commission has put forward a comprehensive proposal for a regulation which will create a European legal framework for this form of financing for the first time. The European Commission wants to make it easier for start-ups and small businesses to raise funds from investors via the internet. Due to different regulations, it is currently difficult for platforms to expand into other EU countries. Crowdfunding should therefore be subject to uniform rules in the future and the ownership of the license of one country should be sufficient to operate the respective platform throughout Europe.
In contrast, investors should be protected by clear rules on disclosure of information, governance and risk management rules and a coherent approach to the oversight of crowdfunding platforms.
The EU member states and the European Parliament still have to approve the proposal.
Leader PwC Legal Switzerland
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Legal FS Regulatory & Compliance Services
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Mark A. Schrackmann
Legal FS Regulatory and Compliance Services
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