The UK Financial Conduct Authority (FCA) issued a press release on August 7 announcing that it has joined 11 other financial regulators from around the world to create the Global Financial Innovation Network (GFIN), building on its proposals earlier in the year to create a “global sandbox.” The network is intended to provide fintech firms a more efficient way to interact with regulators as they test new ideas across different markets and to create a new framework for regulators to cooperate on areas of innovation. This announcement continues a regulatory trend of being more hospitable to fintech innovation, as we have previously discussed.
The 12 regulators have launched a consultation on the GFIN’s role, proposing that it would provide a forum for joint policy work, trialling cross-border solutions, and sharing experiences and best practices between regulators.
Among those regulators participating are authorities in Abu Dhabi, Australia, Bahrain, Canada, Dubai, Guernsey, Hong Kong, Singapore, and the United States, highlighting the increasingly global nature of innovation trends within financial services. They welcome further participation and interest from other regulators. The US participant in this initiative will be the Bureau of Consumer Financial Protection.
The consultation draws on feedback from the FCA’s initial consultation on a global sandbox that was supportive of regulatory collaboration. Areas highlighted in that feedback with notable cross-border application included artificial intelligence, distributed ledger technology (e.g., blockchain), data protection, regulation of securities and initial coin offerings, anti-money laundering, and green finance. The consultation closes on 14 October 2018, following which the working group will assess the feedback and agree on next steps.
We are actively monitoring developments in this area and will report on further developments of interest as they occur.