EBA Report Assesses Regulatory Framework for Fintech Activities
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.
Related Links
Keywords: Europe, EU, Banking, Fintech, Proportionality, Fintech License, Fintech Action Plan, EBA
Previous Article
FSB Workshop on Continuity of Access to FMIs for Firms in ResolutionRelated Articles
APRA Finalizes Reporting Standard for Operational Risk Requirements
APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.
ECB Publishes Guide for Determining Penalties for Regulatory Breaches
ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.
MAS Sets Out Good Practices to Manage Operational Risks Amid COVID
MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.
ACPR Announces New Data Collection Application for Banks and Insurers
ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.
BCB Maintains CCyB at 0%, Initiates First Cycle of Regulatory Sandbox
BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.
EBA Consults on Pillar 3 Disclosure Standards for ESG Risks Under CRR
EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).
ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting
ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting
EIOPA Launches Study on Non-Life Underwriting Risk in Internal Models
EIOPA has launched a European-wide comparative study on non-life underwriting risk in internal models, also kicking-off of the data collection phase.
SRB Publishes Overview of Resolution Tools Available in Banking Union
SRB published an overview of the resolution tools available in the Banking Union and their impact on a bank’s ability to maintain continuity of access to financial market infrastructure services in resolution.
EU Amends CRD4 and CRD5 as Part of Capital Markets Recovery Package
EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.
