Regulators in the UK and Canada have signed an agreement that makes it easier for financial technology companies to cooperate and expand on both marke
Regulators in the UK and Canada have signed an agreement that makes it easier for financial technology companies to cooperate and expand on both markets.
The UK`s Financial Conduct Authority (FCA) and the Ontario Securities Commission (OSC) closed the deal in the hope to help fintech start-ups navigate regulations
Both FCA and OSC have launched their own initiatives to help start-ups meet compliance requirements and test products under their supervision, stated Insurance Journal (insurancejournal.com).
While the FinTech sector is booming in the recent years, complicated regulations may stand in the way of new companies that want to expand quickly.
Canada has a fragmented regulatory environment, meaning that fintechs might need separate approvals from each province.
Central banks around the world have also expressed concerns that financial technology can threaten financial stability. The sceptics turn the attention towards possible security issues like money laundering, terrorism financing and data protection. Greater regulatory oversight is proposed as a solution.
“Getting a clearer picture of fintechs’ business activities is essential if we are to better understand whether and in what way they might pose a threat to financial stability.”, said Bundesbank President Jens Weidmann in an interview with Reuters (uk.reuters.com).
The Bundesbank has launched a project with Deutsche Boerse to make its own blockchain-based prototype of a securities settlement system.
“Many believe the most disruptive potential is to be found in blockchain or distributed ledger technology, which promises to allow payment transactions and securities settlement to bypass banks and central counterparties altogether.”, added Weidmann.