Our FinTech Foundry by Shearman team is made up of experts and thought leaders within the FinTech space. Our team provides industry knowledge and know-how to keep you aware of developments in the legal space that may affect your company.
 

Featured FinTech Insights

Entering the US Market: A Guide for FinTech Firms

The rise of FinTech has connected global financial markets like never before. While it has created significant growth opportunities, it can also expose growing FinTech firms to challenging differences in regulatory frameworks and legal implications. To help FinTechs navigate their expansion efforts to the US, Shearman & Sterling’s FinTech Foundry, in association with the UK’s Department for International Trade and HM Treasury, published a comprehensive guide entitled, Entering the US Market: A Guide for FinTech Firms.
Read the Guide

FinTech Regulatory Sandbox Map

As the FinTech landscape continues to grow and evolve at a rapid pace, regulatory sandboxes provide a controlled environment for eligible FinTech firms to conduct live testing under regulatory supervision to secure authorization and launch their new products or services. The scope and guidelines of regulatory sandboxes vary depending on the objectives of the sandbox, eligibility of the applicant, how the products or services are tested, the timing for the test and the regulator’s actions following it. Our interactive map helps FinTech firms easily access key information about the sandboxes closest to them to test their products or services while also bridging relationships with key regulators.
View the Map

US FinTech and Emerging Growth Company Resource Guide

As business owners struggle to understand the short-term and long-term implications of the COVID-19 pandemic on their business, customers and employees, we have prepared the following Q&A resource addressing issues business owners need to know as the fallout from the COVID-19 pandemic progresses. The guide addresses questions related to government lending programs (including the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDLs)), fundraising and investor relations, existing loans, employment matters, tax issues, vendor and customer agreements and FinTech regulatory issues, among other things.
Read the Guide

UK FinTech and Emerging Growth Company Resource Guide

The COVID-19 pandemic has resulted in unprecedented disruption to worldwide markets and personal livelihoods, affecting global companies, small companies, and main street businesses alike. Our UK-focused COVID-19 resource guide addresses questions related to government lending programs (including the COVID Corporate Financing Facility (CCFF) and the Coronavirus Business Interruption Loan Scheme (CBILS)), fundraising and investor relations, existing loans, employment matters, tax issues, vendor and customer agreements and FinTech regulatory issues, among other things.
Read the Guide

Thought Leadership

• Prosecutors and Regulators Focus on Cryptocurrency Platforms and Anti-Money Laundering Requirements Back to Site Load in Main Window
  10/13/2020

  Prosecutors and regulators are signaling an intent to expand accountability amongst cryptocurrency platforms under U.S. laws and regulations, including the Bank Secrecy Act (BSA). On October 8, 2020, the United States Department of Justice (DOJ) released a report on enforcement challenges and areas of focus related to entities dealing in cryptocurrency. The report came shortly after the DOJ and the Commodity Futures Trading Commission (CFTC) announced an indictment and civil charges against directors and entities related to BitMEX, a platform for trading in futures contracts and other derivatives tied to cryptocurrencies, for failing to register with the CFTC as a Futures Commission Merchant (FCM) and to implement proper anti-money laundering (AML) measures.

• Equity Market Operations - A Response to Financing Needs Back to Site Load in Main Window
  07/31/2020

  Due to market volatility and regulatory constraints, recent secondary equity transactions carried out in the European market have mainly been accelerated private placements with institutional investors of new shares, convertible bonds or block trades, without prospectus.

• Current Developments in Data Privacy for Financial Institutions, Fintech and Non-Bank Lenders Back to Site Load in Main Window
  07/02/2020

  Partners Emma Maconick and Reena Agrawal Sahni hosted a webinar discussion on current developments in data privacy.

• CFTC Issues Final Interpretive Guidance on ‘Actual Delivery’ of Digital Assets Back to Site Load in Main Window
  06/22/2020

  The Commodity Futures Trading Commission (the CFTC) has issued long-awaited final interpretive guidance regarding the “actual delivery” exception to retail commodity transactions involving digital or virtual currencies under the Commodity Exchange Act (the CEA) (the “Interpretative Guidance”). Of significance for market participants, the guidance describes the primary factors that the Commission will consider when evaluating whether “actual delivery” has occurred for purposes of a key exemption from the CEA that permits leveraged retail commodity transactions. The interpretation represents another step in the CFTC’s efforts to clarify the application of its rules to digital asset transactions.

• CARES Act: The SBA’s Paycheck Protection Program—Congress Passes the Paycheck Protection Flexibility Act Back to Site Load in Main Window
  06/09/2020

  On June 8, 2020, U.S. Department of the Treasury (Treasury) Secretary Steven Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza issued a statement regarding the enactment of the Paycheck Protection Flexibility Act of 2020 (the Act), which Congress passed on June 3, 2020 and President Trump signed into law on June 5, 2020. The Act eases restrictions on Paycheck Protection Program (PPP) loans and gives business owners more flexibility in spending loan funds.

• CARES Act - The SBA’s Paycheck Protection Program—Interim Final Rules on Loan Forgiveness and Review Procedures Released Back to Site Load in Main Window
  05/27/2020

  On May 22, 2020, the U.S. Small Business Administration (SBA) and the U.S. Department of the Treasury published its Paycheck Protection Program (PPP) Loan Forgiveness Rules and Loan Review Procedures and Related Borrower and Lender Responsibilities. The rules provide borrowers and lenders guidance on requirements for loan forgiveness and the SBA’s process for reviewing PPP loans.

• CARES Act - The SBA’s Paycheck Protection Program - Loan Forgiveness Application Released Back to Site Load in Main Window
  05/18/2020
  On May 16, 2020, the U.S. Small Business Administration (SBA) and the U.S. Department of the Treasury published its Paycheck Protection Program (PPP) Loan Forgiveness Application. Additionally, the Treasury Department stated in a press release that the SBA will issue regulations and guidance to further assist borrowers as they complete their loan forgiveness applications, and to provide lenders with guidance on their responsibilities.
• CARES Act - The SBA’s Paycheck Protection Program: New FAQs Regarding ‘Necessity’ Certification Back to Site Load in Main Window
  04/30/2020
  On April 23, 2020 and April 28, 2020, the U.S. Small Business Administration (SBA) and the U.S. Department of the Treasury posted additional guidance on eligibility for the Paycheck Protection Program (PPP) by updating its Frequently Asked Questions (FAQs) release on the PPP. 
• Coronavirus Aid, Relief, and Economic Security Act (CARES Act): Paycheck Protection Program Summary Back to Site Load in Main Window
  04/27/2020
  On March 25, 2020, the U.S. Senate unanimously passed a $2 trillion federal economic stimulus package that would allocate roughly $377 billion for small business loan programs to provide cash-flow assistance to qualifying businesses. The House of Representatives passed the Act and it was enacted into law on March 27, 2020. 
• UK Small Business and Emerging Growth Company Resource Guide Back to Site Load in Main Window
  04/08/2020

  The COVID-19 pandemic has resulted in unprecedented disruption to worldwide markets and personal livelihoods, affecting global companies, small companies and main street businesses alike. As business owners struggle to understand the short-term and long-term implications of the COVID-19 pandemic on their business, customers and employees, we have prepared the following Q&A resource addressing issues business owners need to know as the fallout from the COVID-19 pandemic progresses.

• Considerations for US FinTechs and Emerging Growth Companies in Light of COVID-19 Back to Site Load in Main Window
  04/06/2020

  Watch  On April 6, Shearman & Sterling hosted a webinar where a cross-practice team of lawyers highlighted relevant considerations for FinTechs and emerging growth companies in light of the COVID-19 pandemic.

• US Small Business and Emerging Growth Company Resource Guide Back to Site Load in Main Window
  03/31/2020

  The COVID-19 pandemic has resulted in unprecedented disruption to worldwide markets and personal livelihoods, affecting global companies, small companies and main street businesses alike. As business owners struggle to understand the short-term and long-term implications of the COVID-19 pandemic on their business, customers and employees, we have prepared the following Q&A resource addressing issues business owners need to know as the fallout from the COVID-19 pandemic progresses.

• NYDFS Requires COVID-19 Preparedness Plans from Regulated Entities Back to Site Load in Main Window
  03/17/2020

  The arrival of Novel Coronavirus (“COVID-19”) in New York, and the United States more generally, has roiled the U.S. and global economy and significantly affected numerous businesses. In light of these circumstances, the New York Department of Financial Services (“NYDFS”) released a set of industry letters on March 10, 2020 (the “Industry Letters”) that: (i) require regulated institutions to have preparedness plans in place to address operational and financial risks posed by the outbreak of COVID-19 and to submit a description of those plans to the NYDFS, and (ii) encourage New York regulated banks, credit unions and licensed lenders to consider all reasonable and prudent steps to assist businesses that have been adversely impacted by COVID-19. On March 12, 2020, the NYDFS also provided relief by order of the Superintendent of the NYDFS from certain New York Banking Law notice requirements (including with respect to office closures or relocations), as well as extensions regarding certain NYDFS regulatory reporting requirements in this period.

• NYDFS Requires COVID-19 Preparedness Plans from Virtual Currency Businesses Back to Site Load in Main Window
  03/17/2020

  The arrival of Novel Coronavirus (COVID-19) in New York, and the United States more generally, has roiled the U.S. and global economy and significantly affected numerous businesses. In light of these circumstances, the New York Department of Financial Services (NYDFS) released an industry letter on March 10, 2020 (the “VCB Guidance”) to entities engaged in “Virtual Currency Business Activities,” requiring each such regulated institution submit a plan describing the institution’s preparedness to manage the risk of disruptions—financial, services and operations—stemming from the recent outbreak of COVID-19. In addition, the NYDFS Superintendent has issued an order providing temporary relief regarding certain Banking Law notice requirements and extensions regarding certain NYDFS regulatory reporting requirements in this period.

• COVID-19: Derivatives Implications Back to Site Load in Main Window
  03/11/2020

  The outbreak of the novel coronavirus COVID-19 has implications for derivatives contracts. For example, some companies are asserting that the reported disruptions in the global supply-chain and travel restrictions constitute a force majeure, which is a legal basis for excusing non-performance and a right to terminate under contracts. Below are certain issues market participants may wish to consider when evaluating the potential impacts of the COVID-19 outbreak on their outstanding derivatives contracts.

• Understanding US Regulatory and Market Access Considerations to Help Accelerate Growth for FinTechs Back to Site Load in Main Window
  10/22/2019

  Shearman & Sterling, UK Department for International Trade and Her Majesty’s Treasury launch new guide for FinTechs looking to set up and expand in the U.S. The rise of FinTech has connected global financial markets like never before. While it has created significant growth opportunities, it can also expose growing FinTech firms to challenging differences in regulatory frameworks and legal implications. To help FinTech businesses navigate their expansion efforts to the U.S., Shearman & Sterling’s FinTech Foundry, in association with the UK’s Department for International Trade and Her Majesty’s (HM) Treasury, today launched a comprehensive guide entitled, Entering the U.S. Market: A Guide for FinTech Firms.

• IRS Issues Virtual Currency Tax Guidance on Forks and Airdrops Back to Site Load in Main Window
  10/16/2019

  On October 9, 2019, the Internal Revenue Service (the “IRS”) issued Revenue Ruling 2019-24 (the “Revenue Ruling”) and questions and answers (the “Q&A” and, together with the Revenue Ruling, the “Guidance”) addressing certain virtual currency tax issues, including the tax treatment of forks and airdrops.

• Developments in the Antitrust Enforcement of Online Platforms’ Use of Data Back to Site Load in Main Window
  08/07/2019

  The economic value and utility of customer data has led to many technology companies devising successful business models on the basis of providing free access to their online platforms and services in return for access to their users’ personal data. Data has therefore become an important input for online services and thus a parameter for market competition in the digital economy.

• How Should Competition Law React to Fintech? Back to Site Load in Main Window
  08/05/2019

  Financial technology companies, known as ‘fintechs,’ are an increasingly prominent and disruptive presence in the financial services market. While these technologies are having a significant impact on the competitive landscape, the European Commission and national competition authorities have expressed concern as to whether the current competition legal framework is equipped to deal with the challenges created by these new technologies, some of which we discuss in the article.

• Key Antitrust Enforcement Trends — 2019 Antitrust Annual Report Back to Site Load in Main Window
  07/23/2019

  Shearman & Sterling released its Antitrust Annual Report today. The 2019 report considers two key developments shaping worldwide antitrust enforcement – the use of antitrust as a tool to regulate large technology corporations and U.S. antitrust enforcement under the Trump administration.

• Financial Services Regulations for the Fintech Entrepreneur Back to Site Load in Main Window
  06/19/2019

  Associate Justin Reda (both New York-Investment Funds) have published a two-part article titled "Financial Services Regulation for Fintech Companies” in Law360.

• Ferranti and Modesti Author Article on Real Estate Equity Tokenization Back to Site Load in Main Window
  05/31/2019

  Partner Kris Ferranti and staff attorney Cristiana Modesti (both New York-Real Estate) authored an article titled “Real Estate Equity Tokenization: A Path for Enhanced Liquidity” that was published in the May 30, 2019 issue of Commercial Property Executive. 

• Ferranti Interviewed in Fried on Business on Blockchain and Tokenization Back to Site Load in Main Window
  04/04/2019

  Partner Kris Ferranti (New York- Real Estate) was interviewed on AM 880’s Fried on Business show, where he discussed how blockchain and the tokenization of real estate assets can add value and efficiency to real estate transactions.

• Fintech: Achieving Better Balance Back to Site Load in Main Window
  03/08/2019

  By Donna Parisi and Michelle Tran

  While funding in the fintech space has skyrocketed over the past several years, many women in the space are still struggling to find a seat at the table, a trend seen throughout the startup landscape.

• The ‘WeChat Effect’: Understanding the Compliance Risks of Mobile Messaging Apps Back to Site Load in Main Window
  03/01/2019

  The article “The ‘WeChat Effect’: Understanding the Compliance Risks of Mobile Messaging Apps,” authored by partner Brian Burke and Of Counsel Danforth Newcomb (both New York-Litigation) and associate Caitrin McKiernan (Hong Kong-Litigation), was published in the February 2019 issue of Financier Worldwide.

• Winklevoss Ruling Highlights Subjective Aspects of SEC Mission Back to Site Load in Main Window
  11/29/2018

  Counsel Andrew “Buddy” Donohue authored an article in Law360 titled “Winklevoss Ruling Highlights Subjective Aspects of SEC Mission.” It was published in November 2018.

• Gaps in Current Legal Framework Hindering Blockchain-Based Trade Finance Back to Site Load in Main Window
  09/26/2018

  Shearman & Sterling, R3 and BAFT (Bankers Association for Finance and Trade) have released a technical paper, “Code Is Not Law: The Legal Background for Trade Finance Using Blockchain,” which examines the paths to securing legal recognition for “electronic negotiable instruments."

• NFA Adopts Disclosure Requirements for Members Engaging in Virtual Currency Activities Back to Site Load in Main Window
  09/13/2018

  The National Futures Association (NFA) has adopted an interpretive notice that requires futures commission merchants, introducing brokers, commodity pool operators and commodity trading advisors to disclose to customers certain potential risks involved when dealing with virtual currencies and virtual currency derivatives.

• Senior SEC Official Clarifies Whether and When Digital Assets Are Securities Back to Site Load in Main Window
  07/05/2018

  In wide-reaching remarks at the Yahoo Finance All Markets Summit: Crypto on June 14, 2018, William Hinman, the director of the SEC’s Division of Corporation Finance, affirmed that lawyers and promoters should focus on to the economic substance of a digital transaction, rather than to the label in analyzing whether the U.S. securities laws apply.

• Regulators and Courts Clarify Virtual Currency Regulation, but Overall Framework Remains Murky Back to Site Load in Main Window
  04/12/2018

  This update serves to cover virtual currency regulatory developments over the past two months in the U.S., U.K. and EU. This follows our previous virtual currency regulatory updates as part of Shearman & Sterling’s FinTech initiative, and we will continue to keep a close eye on these developments as they unfold.

• M&A Watch: Blockchain Technology Developments in Delaware Back to Site Load in Main Window
  04/10/2018

  While cryptocurrencies have captured the attention of many, the blockchain technology underlying these instruments has potentially far-reaching implications in many other fields. Consistent with its reputation as a jurisdiction of choice for many companies, Delaware has been working to integrate blockchain technology into corporate recordkeeping through the use of distributed ledgers.

• SEC’s Inspections and Examinations Office Sets 2018 Priorities Back to Site Load in Main Window
  02/08/2018

  The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations’ long-awaited examination priorities for 2018 will focus on five principal areas: retail investors; infrastructure risks; FINRA and MSRB; cybersecurity; and anti-money laundering programs. Among other things, the Office of Compliance Inspections and Examinations (OCIE) will focus on mutual funds with poor performance or liquidity and those managed by inexperienced investment advisers, and on conflicts of interest that may arise when a fund tracks a proprietary index created or maintained by the fund’s investment adviser.

• Top Federal Securities and Commodities Regulators Testify on Virtual Currency Regulation Before Senate Committee Back to Site Load in Main Window
  02/07/2018

  In testimony before a Senate committee, the top federal securities and commodities regulators said they are cooperating to step up enforcement actions targeting fraud in initial coin offerings and other virtual currency-related activities. Chairman Clayton of the Securities and Exchange Commission fired a warning shot aimed at “gatekeepers and others,” including securities lawyers, investment bankers, accountants and consultants, who, he said, must focus on their professional responsibilities to ensure that virtual currency activities comply with federal disclosure and investor protection laws.

• Cryptocurrencies: A Big Week for U.S. Regulatory Attention Back to Site Load in Main Window
  01/25/2018

  In an op-ed published in the Wall Street Journal on January 24, 2018, Jay Clayton, the Chair of the US Securities and Exchange Commission (SEC), and J. Christopher Giancarlo, the Chair of the US Commodity Futures Trading Commission (CFTC), warned that while some market participants may make a fortune by investing in initial coin offerings (ICOs), the risks are high and that “[c]aution is merited.”  They described the challenges of monitoring and regulating cryptocurrency activities.  For example, they note that federal authority to apply anti-money laundering rules to these activities is clear, but the ability to regulate other aspects of this market is “murkier.”  Acknowledging that distributed ledger technology “may in fact be the next great disruptive and productivity-enhancing economic development,” the regulators made it clear that they “will not allow it or any other advancement to disrupt our commitment to fair and sound markets.” The SEC’s website published excerpts of the op-ed article.

• Securities on Blockchain Back to Site Load in Main Window
  12/01/2017

  Reade Ryan contributed to an article, titled “Securities on Blockchain,” that was published in the Winter 2017-2018 edition of The Business Lawyer. The article analyzes how blockchain securities fit within current laws covering uncertificated securities and provides guidance to corporate lawyers faced with providing a legal opinion related to the issuance of securities on a blockchain. 

• Transformation and Innovation: a Guide to Partnerships Between Financial Services Institutions and Fintechs Back to Site Load in Main Window
  11/01/2017

  Nicholas Withers, associate in the Mergers & Acquisitions practice, collaborated on a FinTech report with The CityUK and Santander UK. The report sets out the key models and real-world examples of how greater collaboration between financial services and FinTechs can aid the development of innovative digital products and services. It also offers seven possible models by which incumbents and FinTechs can partner together, highlighting both the benefits of doing so as well as some of the main legal issues to consider. 

• Donegan Discusses the Emergence of U.K. Crowdfunding as a Mainstream Financial Service in Payments & FinTech Lawyer Back to Site Load in Main Window
  08/01/2017

  Partner Thomas Donegan (London-Financial Institutions Advisory & Financial Regulatory) and associates Anna Doyle (London-Financial Institutions Advisory & Financial Regulatory) and Kyle Koh (Singapore-Project Development & Finance), discuss the growth of crowdfunding following the Financial Conduct Authority’s (FCA) granting of full authorisation to two of the U.K.'s largest peer-to-per lending platforms in the August 2017 issue of Payments & FinTech Lawyer.

• Video: Altman on FinTech and M&A—Protecting Intellectual Property Back to Site Load in Main Window
  07/11/2017

  Jordan Altman discusses the necessary steps—from developing source code to active filings—in protecting a FinTech company’s intellectual property rights during an M&A transaction, and looks at the industry’s bright future ahead.

• The International Comparative Legal Guide to: FinTech 2017 Back to Site Load in Main Window
  05/19/2017

  Reena Sahni led the effort to write a U.S. chapter of ICLG’s Fintech 2017 publication. The chapter discusses what types of funding are available for new and growing businesses, regulatory frameworks, access to talent and IP protection across the FinTech landscape.