EBA published the findings of its analysis on the regulatory framework applicable to fintech firms when accessing the market. The report illustrates the developments on the regulatory perimeter across EU, the regulatory status of fintech firms, and the approaches followed by competent authorities when granting authorization for banking and payment services. EBA findings show a few national legislative developments that could potentially create an "unleveled" playing field in EU.
On crowdfunding, EBA takes note of the EC proposal for regulation on crowdfunding service operators. On crypto-asset related activities, the report refers to the EBA January report on crypto-assets and the follow-up actions. As to the authorization approaches, EBA found that proportionality and flexibility principles are applied in the same way by competent authorities irrespective of whether the applicant presents a traditional or innovative business model and/or delivery mechanism. In the context of the second Payment Services Directive or PSD2, the monitoring by EBA will observe whether such principles are used to fast-track applicants. EBA will also monitor with a view to better assess the specificities of the national special regimes on granting authorization as a credit institution with a capital lower than EUR 1 million and their application to fintech applicants. Overall, the national regulatory status of fintech firms with innovative business models or delivery mechanisms shows the following two developments:
- The shift from non-regulated to regulated activities—notably payment initiation services and account information services being subject to PSD2
- The ancillary/non-financial nature of the services provided by fintech firms not subject to any regulatory regime, with the exception of crowdfunding, and to some extent activities related to crypto-assets
This report delivers on one of the action points of the FinTech Action Plan of EC, which was published in March 2018 and ESAs to map current authorizing and licensing approaches for innovative fintech business models. The report also delivers on the EBA FinTech Road map of March 2018, which in line with the EC FinTech Action Plan, identified the monitoring of the regulatory perimeter, including the assessment of current authorization and licensing approaches to fintech firms, as one of its priorities for 2018/2019.
Keywords: Europe, EU, Banking, Fintech, Proportionality, Fintech License, Fintech Action Plan, EBA
Previous ArticleBNM Publishes Policy Document on Risk Management in Technology
EIOPA submitted—to the European Parliament, the Council of the European Union, and EC—its 2020, fifth, and last annual report on long-term guarantee measures and measures on equity risk.
The BIS Innovation Hub Swiss Centre, SNB, and the financial infrastructure operator SIX announced the successful completion of a joint proof-of-concept (PoC) experiment as part of the Project Helvetia.
EBA published the final draft regulatory technical standards for calculation of own funds requirements for market risk, under the standardized and internal model approaches of the Fundamental Review of the Trading Book (FRTB) framework.
EIOPA published discussion paper on a methodology for the potential inclusion of climate change in the Solvency II (sometimes also written as SII) standard formula when calculating natural catastrophe underwriting risk.
EU published, in the Official Journal of the European Union, corrigenda to the Directive and the Regulation on the prudential requirements and supervision of investment firms.
MAS proposed amendments to certain regulations, notices, and guidelines arising from the Banking (Amendment) Act 2020.
PRA published a statement that explains when to expect further information on the PRA approach to transposing the Capital Requirements Directive (CRD5), including its approach to revisions to the definition of capital for Pillar 2A.
RBNZ launched consultations on the scope of the Insurance Prudential Supervision Act (IPSA) 2010 and on the associated Insurance Solvency Standards.
SRB published the work program for 2021-2023, setting out a roadmap to further operationalize the Single Resolution Fund and to achieve robust resolvability of banks under its remit over the next three years.
EIOPA is consulting on the relevant ratios to be mandatorily disclosed by insurers and reinsurers falling within the scope of the Non-Financial Reporting Directive as well as on the methodologies to build these ratios.