Regulators worldwide, not just in Canada face the existing paradox of stimulating financial innovation with a regulatory framework while also protecting the right of consumers and investors. We are seeing more than ever before, the emergence of new players that are: upending operating models, proliferating new products & trading platforms, all with high stakes - Coinbase has valued itself at $8B as of recently.
The expert panel moderated by Alix D'Anglejan-Chatillon (Partner at Stikeman Elliot) and comprising of Maureen Jenson (Chair & CEO of OSC), Louis Morisset (President & CEO of AMF), and Jeremy Rudin (OSFI) presented their views on what they believe is required of Canadian regulators in the ecosystem.
Below are key findings:
- Fintech players when initially emerged in market more popularly a number of years ago, did so without the guidance of the major regulating entities in Canada. As such, the regulators were tasked with figuring out how these innovations can continue their operations (as they were stimulating growth & innovation in the nation) while still remaining compliant with Canadian laws
- The AMF conducted 3 key activities to manage this disruption:
- Launched a Fintech working group comprising of cross-functional expertise on multiple Fintech domains (blockchain, lending portals, etc.)
- Created a dedicated Director role for Fintech & Innovation to be answerable to market and drive overall growth in the sector from a regulatory lens
- Set up a Fintech advisory committee comprising of players from both Incumbents & Fintech's to bring to light key trends and issues that are persisting in the space
- The OSC has also taken steps to plug into the Fintech ecosystem:
- developed the OSC Launchpad, comprising of a dedicated team in place to assist Fintech's in navigating existing regulations & understand the regulatory environment
- Launched a workstream called 'Open Data' to make data more accessible via the OSC website (not an API)
- Beyond the AMF & OSC sharing their individual actions to ensure compliance of the ecosystem, OSFI spoke about some of the existing challenges place:
- Unless a company is registered as a Bank, they cannot call themselves a bank or market that their customers will be banked through their offering. Doing so, will result in a call from the regulator to rectify
- The advent of Fintech invites new risks & amplified existing risks that the ecosystem needs to be mindful of (i.e. operational risk amplified as a result of fragmentation within a large enterprise and an intake of a multitude of third parties without cross-collaboration)
Join in on the conversation with Aqsa Zubair when you subscribe to Future of Financial Services.