FCA roundtable on UK fintech regulation: 12 key takeaways

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With ever closer ties between Singapore and the UK’s fintech (i.e. Fintech Bridge), it makes sense that companies regulated in either market can benefit from “warm introductions” courtesy of the respective regulator.

In the UK, it’s the FCA (Financial Conduct Authority). In Singapore, it’s the MAS (Monetary Authority of Singapore).

We had Anna Wallace, Head of Innovate at the FCA, over for a fintech roundtable at LATTICE80 last week, and here’s some of the key takeaways from what she had to share on UK-Singapore fintech ties:

  1. What is the Financial Conduct Authority: The FCA, as the name suggests, focuses specifically on regulations for fintechs in the UK to protect consumers and ensure effective competition.
  2. Only been around 4 years: The FCA has only in fact been around for a short time, coming to life in April 2013 in response to a growing number of fintech startups in London. Admitting that they “didn’t really know how to deal with them” at the time, the UK government set up the FCA to take charge.
  3. Innovation in the interests of financial users (consumers): The main goal of the FCA’s Innovate unit, which now employs roughly 30 people. Indicators they use to spot innovation include value for money, greater understanding, transparency, inclusion, risk management, and more.
  4. World’s first regulatory sandbox: The FCA debuted the world’s first regulatory sandbox. Today they continue to work very closely with regulators all around the world, and are “delighted” that so many of them have also introduced their own sandboxes.
  5. Robo and RegTech are two big areas: The FCA spends a lot of time ensuring these new technologies, under the larger fintech umbrella, comply with regulations. It’s also important that they continue to monitor the market to be confident that the rules and regulations in place best serve all parties.
  6. How to get the FCA’s help: If you are a fintech that wants help from the FCA or its Innovate unit, there are some important things you need to demonstrate: be on the edge of innovation; background research (be serious about what you’re doing!); understand law, consumer protection, and market integrity (beyond just the commercials); and clearly identify where you need support in terms of regulations.
  7. FREE assistance with licensing application: The FCA’s Innovate unit is there to help qualifying fintech startups with their licensing application, and usually provide supporting documents to ensure fast-track treatment. (The best part is it’s free!)
  8. Reducing time and cost of going to market: The goal is to help fintechs reduce their time and cost of going to market in the UK, as well as raising funds. (Easier to raise funding once regulated.)
  9. Payments regulation ongoing: The UK is still testing and implementing new payments regulations. Through the sandbox and existing regulations, fintech companies continue to push the boundaries.
  10. Insurance innovation: Just a few years ago this was an almost deserted space, but now lots of innovation is happening thanks to fintech. RegTech, however, still needs some time to catch on in the UK.
  11. UK-Singapore cooperation agreement: Fintechs based in Singapore enjoy preferential treatment in the UK (i.e. if you’re regulated by MAS, you’re automatically accepted to the FCA). To be clear, this is not a passporting system – it’s a fast track.
  12. Visas for foreign fintechs: While the FCA does not have power of visas – that is an issue for customs/immigration – it can provide supporting documents for fintechs it works with. But the standard visa applications process still needs to be observed.

 

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