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FinTech Insights
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Welcome to Shearman & Sterling’s FinTech Insights, where we provide you with real time insight and key trends on the technological revolution that is transforming the financial services industry. Here you can find relevant information on the latest surrounding the regulatory framework, digital banking, blockchain, distributed ledger, cryptocurrencies, ICO’s and much more.

  • Shearman & Sterling Launches Interactive FinTech Regulatory Sandbox Survey
    Through our FinTech Foundry, Shearman & Sterling today has launched an interactive survey of the FinTech regulatory sandboxes located throughout the world.  Each point on the map indicates the existence of a regulatory sandbox and a user may click to get further information such as launch date, governing commission, law & regulations and sandbox environment. 

    Regulatory sandboxes provide a controlled environment for eligible FinTech firms to conduct live testing in under regulatory supervision.  The number of regulatory sandboxes worldwide has grown significantly over the past two years, as now over 30 countries and jurisdictions have launched sandbox initiatives, with several others set to follow suit.

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    View the Interactive Survey
  • UK Crypto-Assets Task Force Outlines the Path to Crypto-Asset Regulation
    The U.K. Crypto-Assets Task Force has published its Final Report. Established in March 2018 by the U.K. Chancellor of the Exchequer as part of the U.K. government's FinTech Sector Strategy, the Task Force comprises representatives from HM Treasury, the U.K. Financial Conduct Authority (FCA) and the Bank of England.

    The Task Force engaged with over 60 firms and other stakeholders to seek their views on topics including: the trajectory of the industry, the risks, benefits and underlying economic value of crypto-assets and the U.K.’s future regulatory approach. Stakeholders were of the view that there is a lack of regulatory clarity in the U.K. and that regulation should be introduced to support the legitimate players in the crypto-assets market. It is also crucial in mitigating risks. There were also calls for regulatory and tax frameworks to be aligned.

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  • Regulators Unveil Plans to Launch Global Financial Innovation Network
    On August 7, 2018, the U.K. Financial Conduct Authority (FCA), the Consumer Financial Protection Bureau (CFPB) and 10 other international financial regulators and related organizations announced the launch of the Global Financial Innovation Network (GFIN).  The announcement, which was accompanied by a consultation paper on the role and objectives of the GFIN, serves as part two of a whitepaper published earlier this year by the FCA on the possibility of forming a “global sandbox.”  The GFIN, as proposed, would consist of three components: (i) information sharing and collaboration through a network of regulators; (ii) joint policy work and regulatory trials; and (iii) cross-border firm trials. 

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  • UK Financial Conduct Authority Sets out Good Practice for Handling Financial Crime Risks from Crypto-Assets
    The U.K. Financial Conduct Authority has published a "Dear CEO" letter to U.K. authorized banks, setting out its views on best practice that banks should adopt for handling the financial crime risks that may be posed by so-called crypto-assets. The FCA uses this term to refer to any publicly available electronic medium of exchange that features a distributed ledger and a decentralized system for exchange. Crypto-assets include crypto-currencies, a well-known example of which is Bitcoin. The FCA acknowledges that crypto-assets can be used without any criminal motives. However, the fact that crypto-assets can be held relatively anonymously and can be readily transferred between countries can make them attractive for criminal purposes.  Banks should adopt proportionate measures to mitigate the risk that they are used to facilitate financial crimes involving crypto-assets.

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  • FCA Clarifies Its Position on Virtual Currency Derivatives 
    On April 6, 2018 the U.K. Financial Conduct Authority (FCA) issued a statement clarifying its position on virtual currencies and virtual currency derivatives.

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  • CFTC and FCA Agree to Collaborate on Regulating FinTech Innovation
    The Commodity Futures Trading Commission and the Financial Conduct Authority have signed a Cooperation Arrangement on Financial Technology Innovation, an arrangement that commits both regulators to collaborating and fostering innovation through their respective FinTech initiatives, LabCFTC and FCA Innovate. This is the CFTC's first agreement of its kind with a non-U.S. counterpart and the FCA's first such agreement with a U.S. regulator. The arrangement will focus on information-sharing based on FinTech market trends and developments in each jurisdiction, simplify the referral process for FinTech companies interested in entering the other's market and facilitate sharing insight gained from each regulator's relevant sandbox, proof of concept or innovation competitions.

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