A Fintech Paradigm

The changing face of financial

services
Virtual Round Table Series
Member Collaboration 2018
Virtual Series | A Fintech Paradigm

IR Virtual Series, issue #30. First published June 2018.

A Fintech Paradigm
The changing face of financial services
Fintech is a relatively new concept traditional providers. Here the aim is to traditional structures and new Fintech
that encompasses a whole variety of stimulate economic growth by improving concepts with high consumer demand
businesses also beneath the broader efficiency and providing better services that are struggling to grow within the
umbrella of financial services. The to consumers. The countries that have existing paradigm. Other examples
term generally incorporates any use of done this well have adopted positive, include blockchain technology, robotics
technology to disrupt the established light-touch regulation and encouraged and artificial intelligence.
method of offering financial services to the growth, funding and development of
New uses for these innovative technol-
customers. Fintech start-ups.
ogies are being discovered at a rapid
Examples of Fintech applications range In the UK, where Fintech adoption is at pace as capability develops and the
from money transfer and payment pro- 42 per cent according to the EY survey, required digital infrastructure improves.
viders such as online foreign exchange the Financial Conduct Authority (FCA) The challenge for all jurisdictions is to
or mobile phone payment technology, has adopted a ‘we are here to help’ keep pace with those developments, pro-
through to car insurance using telematics philosophy, encouraging dialogue on viding a fertile environment for growth,
to monitor driving and tailor premiums regulation. The same is true for Hong while still managing risk appropriately for
accordingly. Kong, where an adoption rate of 33 consumers.
per cent and proximity to China has
Adoption of Fintech is increasing Innovations such as Fintech Bridges
persuaded the Hong Kong Monetary
exponentially right across the globe as between jurisdictions (as seen in
Authority (HKMA) to adopt an innovative
products, unbundled from full-service between the UK and Australia) and
approach to development, such as its
incumbent firms, are offered by wrapa- Switzerland’s Crypto Valley Association,
Fintech Supervisory Sandbox (FSS).
round digital platforms that let consum- allow ideas to be shared and technology
ers manage their finances on the go via In Luxembourg, there is a public-private developed in an open, progressive envi-
mobile, disrupting traditional customer initiative called the Luxembourg House ronment. This makes it more likely that a
relationships. of Financial Technology (LHoFT) which feasible solution will be found that allows
is active both domestically and interna- Fintech innovation to thrive, when it is
The 2017 EY Fintech Adoption Index
tionally to develop the country’s Fintech ready and safe to bring to market.
analysed the uptake of Fintech ser-
ecosystem. The country’s well-developed
vices by global consumers. It found an The following discussion involves Fin-
funds industry is a major driver of this,
adoption rate of 33 per cent globally, up tech legal and financial experts from
creating high levels of cooperation
from 16 per cent in 2015. Interestingly, 10 different jurisdictions around the
between government and industry bod-
adoption was far higher in developing world, in both developed and developing
ies.
countries (46 per cent on average) than economies. They will provide an insight
developed economies, since Fintech is During 2018, as well as the existing into the Fintech ecosystems in their own
able to meet unserved demand, not yet Fintech companies, we are starting to jurisdictions, discussing the ways in
filled by traditional services. see a new wave of businesses com- which Fintech has been encouraged and
mercialising cutting edge technology barriers to growth managed, while also
The Index clearly shows this figure is
for forward-thinking consumers. As the detailing the most promising innovations
driven by China and India, where adop-
whole Fintech space becomes more they have seen.
tion rates are as high as 69 per cent and
mature and congested, new subsectors
52 per cent respectively. A good exam- They will also discuss regulation, touch-
are forming such as Insurtech, Wealth-
ple of this is IndiaStack, a company that ing on methods used by respective regu-
tech, Fundtech and Regtech, addressing
facilitates cashless payments in India, latory bodies to encourage Fintech, while
specific opportunities within the financial
where millions of people still do not have honouring their responsibility to protect
services sector.
access to debit or credit cards. consumers.
Cryptocurrency providers and the fund-
In developed markets the challenges
raising mechanisms known as ICOs are
for Fintech are different, since most of
receiving much press at the moment and
the population are already served by
are a good example of tension between

irglobal.com | page 3
Virtual Series | A Fintech Paradigm

UNITED KINGDOM SW I T ZE R L A ND

Ross Nicholls Hans Kuhn

Business Development Partner, Zulauf Partner
Director, IR Global ! 41 44 389 11 11
" hans. kuhn@zulaufpartner. ch
! 44 1675 443396
" [email protected] Hans Kuhn is a partner with Zulauf Partners in
Zurich (Switzerland). He specialises in banking
The View from IR and financial market law with a focus on Fintech
law. He has also extensive experience in securi-
Our Virtual Series publications bring together a
ties law and payment and secured transactions.
number of the network’s members to discuss a
different practice area-related topic. The partic- Before joining private practice, Hans served as
ipants share their expertise and offer a unique chief legal counsel for Swiss National Bank,
perspective from the jurisdiction they operate Switzerland’s central bank, for more than 13
in. years. He served as a member of national and
international expert groups on matters such as
This initiative highlights the emphasis we place
bank resolution, derivatives and netting legisla-
on collaboration within the IR Global community
tion. He also played a leading role in the national
and the need for effective knowledge sharing.
and international securities law reforms, acting
Each discussion features just one representa- as chairperson of the national expert group
tive per jurisdiction, with the subject matter cho- preparing the Swiss Federal Intermediated Secu-
sen by the steering committee of the relevant rities Act and the Diplomatic Conference which
working group. The goal is to provide insight adopted the Geneva Securities Convention.
into challenges and opportunities identified by
A graduate of the University of Zurich in 1993,
specialist practitioners.
Hans was admitted to the bar in Switzerland in
We firmly believe the power of a global network 1995. In 1998 he received his doctorate summa
comes from sharing ideas and expertise, ena- cum laude from University of Zurich. He holds an
bling our members to better serve their clients’ LL. M.-Degree from Tulane University School of
international needs. Law (New Orleans, 2001).
BR A ZIL LU X E M B O U R G U S - NE W J E R S E Y

Adriano Chaves Evelyn Maher David Sorin

Partner, CGM Advogados Partner, Bonn Steichen & Partner, McCarter & English,
! 55 11 2394 8910
Partners LLP 
" adriano. chaves@cgmlaw. com. br
! 352 26 02 51 ! 732 867 9742
Adriano Chaves specialises in M&A, corporate " emaher@bsp. lu " dsorin@mccarter. com
law, finance, foreign investments, technology
In cooperation with Melvin Tjon Akon - Asso- David Sorin  is Chair of McCarter & English’s
and contracts. He graduated from the University
ciate Expert in the Fintech sector at Bonn Venture Capital & Emerging Growth Companies
of São Paulo in Brazil (1995) and concluded his
Steichen & Partners. practice.
LL. M. at Columbia University School of Law in
New York (1999), where he was a Harlan Fiske Evelyn Maher has been active in the Luxembourg He focuses primarily on privately and public-
Stone Scholar. Adriano is recommended by repu- investment fund market since 2001. She assists ly-owned startup, early stage, emerging growth,
table publications (Chambers Global, Chambers fund promoters and asset managers in relation and middle market technology, tech-enabled and
Latin America, Leaders League, LACCA, Análise to the structuring and establishment of a wide life science enterprises, as well as the investors,
Advocacia). range of funds including private equity, venture executives, and boards of directors who support
capital, loan origination, loan participation and and lead them.
Adriano is co-rapporteur of the task force on B2C
real estate.
General Conditions of the Brazilian Chapter of the Most recently, Chambers, the leading publica-
Commission on Commercial Law and Practice She provides advice on compliance with all tion that ranks lawyers and law firms, named
(CLP) of ICC, and a member of the Commission aspects of the regulatory regime applicable to Dave one of the top lawyers in the US in the
of Law Firms of the Brazilian Bar Association, investment funds and in particular the alternative representation of startup, emerging growth and
São Paulo (OAB/SP). investment fund managers directive (AIFMD). Fol- venture capital backed companies.  
lowing launch of the fund Evelyn offers on-going
Under his leadership, McCarter & English has
assistance in relation to closings, investments,
become one of the leading, and most active, law
divestments, liquidation and general issues aris-
firms in transactions for venture-backed compa-
ing throughout the life of the fund.
nies.  It is a top-ten global law firm in several
Evelyn has also provided assistance in relation to distinct categories according to PitchBook’s
the listing of securities on both the regulated and most recent global league rankings, including
Euro MTF markets operated by the Luxembourg regionally, nationally, ninth globally, and with
Stock Exchange. respect to global early stage company transac-
tions generally.
She has extensive experience in relation to Lux-
embourg regulatory and corporate law.

irglobal.com | page 5
Virtual Series | A Fintech Paradigm

DU TC H CAR IBBE AN H O N G KO N G  B E LG IU M

Luis Santine Clinton Morrow Kevin Bertouille

Partner, InfoCapital Advisory & Partner, Charltons Law Partner, Everest Law
Management ! 852 2905 7888 ! 32 2 640 4400 
" clintonmorrow@charltonslaw. com " kevin. bertouille@everest-law. eu
! 599 9 529 1015
" luis. santine@infocapital. cw Clinton Morrow qualified and practiced in Kevin Bertouille has a law degree (2001) from
Queensland, Australia prior to moving to Hong the University of Louvain-la-Neuve and a LLM
Luis Santine, born in Curacao in 1970, is the
Kong and starting with Charltons where he quali- in Business law from Vanderbilt University (TN)
founder and managing director of InfoCapital
fied as a Hong Kong lawyer and is now a Partner. (2003).
and CX Pay; providing diversified advisory ser-
vices related to international business solutions, Clinton’s practice focuses on corporate finance After 10 years being active in banking institu-
e-commerce and payment solutions. and commercial transactions, including public tions in Brussels, Paris and Luxembourg, he
offerings and placings, structuring, mergers joined Everest Law in Brussels (2012) where he
InfoCapital & CX Pay serve a wide range of
and acquisitions, takeovers and cross-border became a partner in 2016.
clientele ranging from corporate to small busi-
corporate transactions, financing and security
ness owners and from institutional to individual Kevin practises banking law (litigation and regula-
transactions, licensing matters and regulatory
investors. tory issues) and business law.
compliance. He has acted across a number of
On an executive level, Luis is a board member of sectors with a particular focus on cross-border Everest is a law firm specialised in legal ser-
Banco del Orinoco, Travelsure Insurance Com- mining and information technology infrastructure vices for businesses and corporations. Everest
pany and Manrique Capriles International as well transactions. lawyers are highly specialised in those fields of
as the chairman of the board of Curacao Invest- law with which companies are faced on a daily
Clinton was named as a Leading Lawyer and
ment & Export Development Foundation (CINEX). basis. Legal services focus on quality, economy
Rising Star in Corporate and M&A by Asia Law
He has extensive experience in the international and expertise, with a regional and an interna-
& Practice in 2016 and a Leading Lawyer and
financial sector, having occupied positions at tional focus.
Rising Star in Capital Markets, Corporate and
various local and international companies in the
M&A in 2017 by Asia Law & Practice and a
financial sector.
finalist Young Lawyer of the Year for the Asian
Luis holds a MBA degree in Entrepreneurship & Legal Business Awards in 2016 and 2017. He
Management and a B. S. B. A. degree in Inter- holds a double degree of Law (with Honours) and
national Business in Finance from the American International Business.
University in Washington, D. C. Luis is proficient
in Dutch, English and Spanish, in addition to
Papiamentu.
EN GL AND M A LTA CY PR U S

Craig Blackmore Gordon Micallef Soteris Flourentzos

Director, Verde Corporate Partner, RSM Malta Managing Director, Soteris
Finance ! 356 2278 7000
Flourentzos & Associates LLC
" gordon. micallef@rsm. com. mt
! 44 29 2240 3445 ! 357 25 107242
" cblackmore@verdecf. com Gordon Micallef leads the Technology Consulting " sf@sflourentzos. com
practice of RSM Malta where he assists organisa-
Craig Blackmore is a director of corporate Soteris Flourentzos is the founder and managing
tions in addressing their digital agenda by guid-
finance boutique Verde Corporate Finance (CF). director of Soteris Flourentzos & Associates LLC.
ing board of directors and executives develop
Soteris has 14+ years of broad corporate and
He joined the company as a consultant in July and execute transformation strategies enabled by
financial law experience, including nearly nine
2017, then promoted to the senior role due to his technology.
years at two prominent Cyprus law firms, where
impressive input.
He services various industries including financial he represented major multinational corporations,
Verde CF, which is part of the Greenaway Scott services and online gaming, where he assists financial institutions and private equity firms in
Group, specialises in providing advice around organisations through their strategic technologic contentious and non-contentious corporate and
mergers and acquisitions, business finance and evolution of embracing key aspects such as financial law cases of great magnitude and scale.
growth capital. fintech, regtech, and aspects distributed ledger
Before executing his vision of building his own
technologies.
Principally trained with Deloitte, Craig worked for law firm with a new, innovative business model to
KTS Owens Thomas before moving on to execu- Together with his multi-disciplined team of tech- accommodate the needs of international equity
tive and non-executive financial director positions nology, business analysis, and legal specialists, firms, entrepreneurs and family offices, Soteris
with some smaller businesses. he also delivers managed services to various was a partner at Soteris Pittas & Co.
industries including cyber security, privacy, regu-
Craig will lead Verde while also maintaining his Soteris holds an LL. B. (Hons) Law and an LL. M.
latory technology, and data management.
roles as chief financial officer at GlobalWelsh, a International Business Law from the University of
not for profit company with a mission to connect Gordon joined the firm in 2014 and is a Certified Exeter, UK.
the international diaspora of Wales, and coaching Public Accountant (CPA), Certified Informa-
on the Welsh Government’s Accelerated Growth tion Systems Auditor (CISA) and holds other
Programme. certifications in governance of IT (CGEIT), risk
management (CRISC), and project management
During his time at Verde CF, Craig has worked
(Prince2).
alongside commercial law firm Greenaway Scott,
which is also part of the GS Group, in a collabo-
rative partnership to combine services.

irglobal.com | page 7
Virtual Series | A Fintech Paradigm

S ES S I O N O N E – T H E F I N T EC H EC OSYST E M

Is there an established Fintech ecosystem in your

jurisdiction? If so, what are the main areas of
expertise?
Adriano Chaves – Brazil (AC) Brazil has In response to this challenge, the big a number of different types of tokens,
the largest and most developed entre- banks are attempting to actively partici- which include ‘utility tokens’, used to
preneurial ecosystem in Latin America, pate in the ecosystem, creating innova- give holders access to the platform and
but the financial services environment is tion environments, investing in Fintechs sometimes as a means of payment for
inefficient and expensive, providing fertile and partnering with Fintechs. The Brazil- services available on the platform. ICOs
ground for Fintech innovation. ian Central Bank is watching the devel- raised over USD4 billion in 2017 world-
opments attentively, trying to learn as wide.
Brazil has a high bank concentration with
much as possible, and considering the
approximately 78 per cent of the credit Craig Blackmore – UK (CB) The UK
possibility of light touch regulation. The
controlled by four banks. Interest rates has one of the most successful and
Securities and Exchange Commission
have historically been high, and there is renowned Fintech ecosystems of any
(CVM) is also taking a positive approach.
much bureaucracy and a poor customer jurisdiction. In 2016, the UK was ranked
experience. Clinton Morrow – Hong Kong (CM) as providing the number one Fintech
Hong Kong is a leading financial centre, ecosystem when benchmarked against
In this environment, it is unsurprising that
with both government and industry sup- the illustrious comparators of California,
the number of mapped Fintechs grew
port for developing its Fintech ecosystem New York, Singapore and Hong Kong.
from 54 in 2015 to 485 in early 2018,
and promoting Hong Kong as a Fintech The Fintech policy environment in the UK
according to the Brazilian Fintech Asso-
hub. There have been a number of initi- is ranked as being particularly supportive
ciation ABFintechs. Brazilian Fintech saw
atives to develop Hong Kong’s Fintech and enabling to Fintech companies.
investment of BRL 457million in 2017,
ecosystem, including funding schemes,
increasing to BRL 800million already so The UK is also well supported by a wealth
technology parks and regulatory sand-
far in 2018. of accelerator hubs which generate a sig-
boxes.
nificant amount of Fintech activity. These
These businesses operate in ten different
In its 2018 budget, the Hong Kong accelerators are established by a variety
verticals, of which payment gateways,
government allocated HKD50 billion to of providers, many government led, but,
financial management, loans and invest-
support the development of innovation increasingly, UK banks are pushing the
ments are seeing the most activity.
and technology. Further, according to envelope by setting up UK wide Accel-
• Payment gateways (more than 30 the EY Fintech Adoption Index 2017, erator networks across a number of
per cent) Hong Kong has established a strong and locations.
• Financial management active Fintech payments sector.
These facilities not only provide great
• Loans One of the fastest growing ecosystems working environments, but also access
• Investments has been the use of initial coin offers or to skills, expertise and equipment that
ICOs to raise capital for Hong Kong tech many start-up businesses just could not
• Insurance (Insurtechs)
start-ups. Whereas China banned ICOs afford.
• Funding in September 2017, Hong Kong has
Internationally, the UK Fintech ecosystem
• Debt renegotiation developed as something of a hub with a
looks like it is already embracing Brexit
• Cryptocurrency number of ICOs over the last year.
opportunities with ‘Fintech Bridges’ being
• Currency exchange An ICO typically involves an offer of developed with countries globally. One
• Multiservice digital tokens, the proceeds of which such bridge is already being advance
are used to fund the development of a with Fintech Australia, and others are
block chain-based platform. There are high on the UK Government’s agenda.
The UK’s ability to provide industry experience, and delivering it through tomer relations for those intermediaries
leading talent is a particular area of improved profitability in environments who change their underlying processes
strength, with a talent pool that boasts where profit margins have been tradition- to incorporate and integrate blockchain
considerable technical and entrepreneur- ally going down. technologies.
ial skillsets.
More recently we have seen a signifi- The emergence of ICOs and tokenisation
Capital and funding also continues to cant increase in attention towards the as a third capital raising mechanism
perform strongly with investors now power that blockchain technologies can alternative, in addition to the traditional
seeing beyond the initial Brexit hesitation deliver, and specifically how Fintech debt versus equity analysis, should be
that surfaced in the last few years. Invest- organisations are seeking to embrace of benefit to the economy if managed
ment in Fintech saw considerable growth such technologies. A significant increase correctly. The business paradigm needs
across 2017, and the signs are that it will in interest around initial coin offerings to be transformed to meet the changes
receive much higher levels of investment (ICOs) and cryptocurrencies has brought resulting from technological innovation.
in 2018. about a lot of discussion, with different Tokenisation financings are not a pana-
intentions to regulate across various cea and certainly are not a solution for
The UK seems to be undecided on
jurisdictions. all capital raising needs, but for the right
cryptocurrency though. While many see
company, business and economic model
the UK as a potential destination for David Sorin – USA (DS) Throughout
they can be an elegant, non-dilutive solu-
their cryptocurrency business, there is many of the tech centres in the US there
tion.
confusion as to how investors, funders is a thriving and established Fintech eco-
and regulators interact with cryptocur- system. The areas of expertise are many, Many of the Fintech sectors require
rency companies. UK banks seem to and include growing segments dealing consideration of existing and emerging
have pulled the shutters down with many with blockchain solutions to various regulatory landscapes. Tokenisation
recently announcing they would not do Fintech issues. transactions, for example, are the newest
business with any companies dealing in entrant to the marketplace implicating
Examples include disintermediation
cryptocurrency. securities laws, commodities regulations,
to make the relationship with financial
and others. Many jurisdictions also will,
Gordon Micallef – Malta (GM) The services providers more ‘sticky’ and to
for example, need to consider the impact
Fintech ecosystem in Malta is growing enhance payment systems. One area of
of digital currencies on their ability
steadily, although it is still predominantly particular note is security for financial
to monitor, measure and control their
focused on the payments cycles primarily transactions, which includes technology
money supply. Great opportunities and
due to the vibrant online gaming ecosys- such as biometrics. Of course, the
concomitant challenges abound.
tem in Malta. We have seen a substantial Fintech space actually is comprised
transfer of skills moving from the online of multiple financial technologies and Hans Kuhn – Switzerland (HK) Switzer-
gaming ecosystem into the Fintech one. sub-sectors. Together, they cover virtu- land is home to a very well developed
We are also noting the fact that Fintech ally all aspects of financial services and Fintech ecosystem, centred around the
organisation are moving closer to the solutions. ‘Crypto Valley’ close to the city of Zug.
blockchain technology itself, and block- This is a global hotspot for blockchain
Elsewhere, there are thriving Fintech
chain organisations. Legacy/traditional applications, and more recently has
businesses involved with smart contracts
banks and insurance companies are no become a global hub for initial coin
and digital currencies and a growing
longer in a position to ignore the Fintech offerings (ICOs), a new and innovative
segment dealing with AI and deep
ecosystem. For example, banks are now method for raising funds for new ven-
learning, as well as virtual reality and
embracing such opportunities to collab- tures.
augmented reality.
orate with Fintech partners towards the
Switzerland has become a leading
objective of implementing effective open These technologies have the capability
jurisdiction for disruptive Fintech tech-
banking concepts. to be disruptive to traditional business
nologies, due to very supportive political
models, and also to be complemen-
Primarily, a Fintech’s promise is to authorities. Businesses can even pay
tary. As an example, while blockchain
deliver innovative financial products and municipal taxes using Bitcoins in the
currently presents a potential existential
services in a business to business (B2B) city of Zug. The regulator always tries to
threat to banks, investment banks, and
or business to consumer (B2C) con- clarify applicable regulations as quickly
venture capital funds, it also can be used
text, tapping into new revenue streams as possible, while still enforcing strict
to improve services, processes and cus-
quickly, improving customer retention/ anti-money laundering (AML) and know

irglobal.com | page 9
Virtual Series | A Fintech Paradigm

Clinton Morrow pictured at the 2017 IR ‘On the Road’ Conference in Singapore

your customer (KYC) policies. The role ance framework for token launches and ment solutions that facilitate online and
of Fintech beyond blockchain and ICOs have partnered with the Dutch Caribbean mobile transactions for any business or
is less dynamic, because the banking Stock Exchange (DCSX). Local law consumer. CX Pay’s focus is on payment
sector is somewhat reluctant to embrace firms, notaries, Big 6 audit firm affiliates, technology and e-commerce innovation,
new technologies. However, a number administrators and brokers have joined geared towards simplifying collection of
of challenger banks are getting ready to the project and developed expertise on funds for business owners through differ-
enter the market. the subject. The approach is expected ent payment methods. As such, CX Pay
to be approved as a blueprint for use, is a trusted partner of banks, Fintechs,
Luis Santine – Curaçao (LS) The
thus making the island a destination for and e-commerce businesses all over the
Curaçao Blockchain and Cryptocur-
legitimate blockchain fundraising. world.
rency Task Force is in the process of
evaluating the opportunities for this new The Central Bank of Curaçao & St. Melvin Tjon Akon & Evelyn Maher – Lux-
market segment and is building a draft Maarten (CBCS) awarded an exemption embourg (MTA) There is an established
legal framework to attract investments to a crypto asset investment fund in Fintech ecosystem in the Grand Duchy
and blockchain-related companies. The August 2017, the first of its kind world- of Luxembourg (Luxembourg). The main
Curaçao Innovation and Technology Insti- wide to our knowledge. The exemption areas of expertise are closely linked to
tute (CITI), a subsidiary of the Ministry of means that the CBCS will not actively the foundational pillars of the country’s
Economic Development, is also currently supervise the crypto investment fund, financial sector, two of which are private
organising Fintech Roundtables with however an annual review is required banking and investment funds. Luxem-
various stakeholders from the financial for maintaining the status. In addition, bourg has a long history as the number
and technology sectors to build a robust the CBCS specifically reviewed and one European incorporation jurisdiction
Fintech platform. approved crypto assets as the underlying of investment funds, both in volume as
asset of the fund. well as in net assets.
The focus in Curaçao with regard to initial
coin offerings (ICOs) is predominantly on InfoCapital’s subsidiary CX Pay, is According to a recent market study of the
compliant token launch solutions. Private specialised in transaction services for main Luxembourg industry associations
companies have developed a compli- online merchants and provides pay- and the Luxembourg House of Financial
Technology (LHoFT), the main areas of Cyprus, including firms providing alter- of digital services provided by traditional
expertise of the Luxembourg Fintech native forms of payment and liquidity banks becomes a key element for con-
ecosystem are payment services, aggregation. sumers when selecting their bank.
fundtech and investments (including
More recently, the numerous complex Belgium holds more than 100 compa-
robo-advisors and fund distribution), and
and challenging international regulations, nies focusing on Fintech. Some of them
regulatory compliance.
including, inter alia, EMIR, Dodd-Frank, are big names in the financial industry
Among these areas, fundtech stands out MiFID2, MiFIR, Finfrag, CRS and SFTR, (SWIFT and Euroclear), while others are
as the key area of expertise, principally has paved the way for the rapid evolution newcomers. Several non-profit organ-
due to the deep specialisation of Lux- of Fintech firms in Cyprus offering mon- isations such as Fintech Belgium are
embourg’s investment fund industry and itoring, risk management and reporting. active in Belgium.   Fintech Belgium is
the high degree of public-private collab- an independent association gathering
The cryptocurrency community in Cyprus
oration in that area. In the Luxembourg professionals and investors interested
has matured a lot, while the Cypriot banks
ecosystem, both start-ups and estab- in new technologies development for
have already hosted some Fintech Haca-
lished institutions are actively involved the financial industry. They provide
thons (marathons for the development of
in the development of new-offerings. For discussions forums and represent their
applications for innovative technologies
example, two major banks (BCEE and members.
in the field of financial transactions).
Keytrade) were the first companies to
The supervisory authority, i.e.: the FSMA,
launch a robo-advisor in the Luxembourg Some other start-ups have already been
has provided a legal framework for
market, closely followed by a start-up designed and are currently being intro-
crowdfunding activities and ICOs. Since
(Gambit Financial Solutions). duced. Many governmental authorities
2016, the FSMA has hosted a special
have begun to use electronic applica-
There is a fair amount of collaboration Fintech portal on its website. The market
tions and software for the execution of
between the public sector and the private has responded very positively to these
their transactions, as is the case with
sector, as well as between newcomers regulatory innovations, demonstrated
the tax authorities. All the key players
and incumbents. A major facilitator of by the crowdfunding market, which has
of the financial sector are ready to col-
this collaboration is the LHoFT, a pub- doubled in size in only one year. Fintech
laborate, namely hi-tech firms, traditional
lic-private sector initiative which is active companies, whether they are traditional
institutions and the government, and
both domestically and internationally to players developing new products or
the Fintech ecosystem, which will have
develop the country’s Fintech ecosys- newcomers, can contact the FSMA to
expertise across many different areas, is
tem. Its leadership circle features leading exchange information for the benefit of
just around the corner.
private institutions, a representative all parties concerned.
from the Luxembourg Government, and Kevin Bertouille – Belgium (KB) Bel-
leaders of the Luxembourg Chamber gium offers a favourable Fintech ecosys-
of Commerce, Luxembourg for Finance tem. According to a B-Hive and Roland
and the Luxembourg Financial Industry Berger survey published last year,
Federation. Belgium is ranked number five in Europe
on deals higher than EUR750,000 and
Soteris Flourentzos – Cyprus (SF)
number nine when it comes to invested
There is not yet an established Fintech
capital, with a total of EUR87 million.
ecosystem per se in Cyprus, however
Compared to international hubs such
a Fintech community has begun to
as London and Paris, improvements
emerge and seems set to become well
are still needed regarding the regulatory
established.
environment and governmental support.
It is not an exaggeration to say that However, the digitalisation of financial
Cyprus is already regarded as an FX services is continuously progressing.
industry powerhouse, a sector which Consumers are more and more eager to
lends itself well to Fintech innovation. use technology to make payments, buy
As a result, many international Fintech stock, and to rely on new technologies to
companies have set up branches in make investment decisions. The quality

irglobal.com | page 11
Virtual Series | A Fintech Paradigm

S ES S I O N T WO – PR O MI S I N G IN N OVAT IO NS

What are the most promising Fintech innovations

you have seen in your jurisdiction? Any specific
examples?
USA – DS The emergence of financial Covve is another up-and-coming start-up As far as enhanced security or know
discipline and professionalism in the that revolutionises the way professionals your customer (KYC) requirements are
blockchain, smart contract and crypto network and drive effective business concerned, Curaçao investment funds
space is beginning to give the sector development. It utilises an intuitive, and token platforms employ stringent
real credibility within the financial ser- visual interface and a sophisticated requirements, as well as GAAP and IFRS
vices industry. An example of this is the engine to cleanse and privately share compliant audit capability.
creation of crypto hedge funds. contacts between colleagues and trusted
Belgium – KB Lita. co which stands
networks, facilitating warm referrals,
Enhanced Security and KYC applications for ‘Life Impact Trust Act’ is an FSMA
while introducing colleagues to trusted
are also growing in importance within the approved crowdfunding platform. As
networks. Finally, the branches of the
Fintech space. from June 2017, they aim to be the
Big4 accounting firms in Cyprus have all
first impact investing platform in Europe
Cyprus – SF The Fintech industry is taken some steps to set up their Fintech
focusing on ethical investments (social
touted as one of the most promising departments. A promising example is
real estate, ethical property, waste man-
industries in Cyprus, as it has the poten- the start-up which is being launched by
agement). This shows evidence that a
tial to lead to direct innovation and new KPMG Cyprus in cooperation with the
solid regulatory framework provides for
paradigms. Department of the VAT, which will enable
a good investment ecosystem.
clients to calculate any relevant amounts
Wargaming, an award-winning online
and pay any fees or instalments. Also Spreds, formerly MyMicroInvest, is a
game developer, is based in Cyprus
Belgian company ranked among the top
and this is a very promising innovation, All these promising Fintech innovations
100 leading Fintech innovators. Spreds
considering that it is a leading firm using in Cyprus strengthen the belief and hope
is a leading European crowdfunding
technology to promote sports and gam- that Cyprus will soon have its own estab-
platform with an impact tracer that allows
ing. lished Fintech ecosystem.
people to invest alongside impact ven-
Additionally, SafeCharge, which provides Curaçao – LS Compliant token launches ture capital companies.
alternative payment methods, along with have led the way in terms of Fintech inno-
Hong Kong – CM A promising area of
other similar Fintech firms, has also vation in Curaçao. Tokens are designed
innovation has been the use of initial coin
launched its Cyprus office. Its technol- and actively managed with stringent
offers or ICOs to raise capital for Hong
ogy allows consumers and businesses KYC/AML components and include
Kong tech start-ups as mentioned earlier.
to more easily conduct business and economic value parameters that are
carry out transactions through the use triggered by adherence to compliance Other important Fintech innovations
of alternative forms of payment. Fur- requirements. Furthermore, local pay- include the regulatory sandboxes
thermore, Cyprus plays host to other ment processing is based on platforms established by the Hong Kong Monetary
major platforms, including MetaQuotes, including full compliance, while securities Authority (HKMA), Securities and Futures
which is a leading developer of financial settlement is being driven by the tokeni- Commission (SFC) and Insurance
trading  software providing evolutionary sation of securities through the DCSX as Authority (IA). HKMA’s Fintech Super-
services for mobile trading, algorithmic a regulatory platform using blockchain visory Sandbox (FSS) was launched in
trading and web trading, helpful to busi- to achieve innovation in current systems. September 2016 and allows authorised
nesses and brokers. institutions to pilot trials of Fintech and
 Hans Kuhn pictured at the 2018 IR DealMakers Conference in Lisbon

other technological initiatives in a con- the efficiency of financial services Clear Bank, for example, is not only a
trolled environment with a more flexible through collaboration between banks Fintech bank, but exists to provides ser-
supervisory arrangement, before launch- and tech firms. vices to financially regulated businesses
ing them on a fuller scale. and Fintechs. Starling, Monzo and Tan-
The HKMA published its consultation
dem provide mobile-only bank accounts
Fintech technologies covered by the proposals for an Open API framework
that empower the customer with innova-
FSS include mobile payment services, in January 2018. It is also consulting
tive reporting, notifications and payment
biometric authentication, blockchain, on a guideline to facilitate the creation
services. Some say that the innovative
robotics and augmented reality. Hong and regulation of virtual banks in Hong
approach of Fintechs such as these have
Kong’s property market is embracing Kong. The HKMA has also established
caught many traditional providers on
Fintech with an example being that Bank a Fintech facilitation office to support
the hop as they play catch-up, because
of China Hong Kong currently processes the sustainable development of a
the appeal of accessible technology
85 per cent of its mortgage valuations by Fintech ecosystem, and entered into
solutions to the millennial consumer is
blockchain. The traditional time-consum- collaboration/co-operation agreements
overtaking the high street at a consider-
ing mortgage loan application process with relevant bodies in Singapore, the
able rate.
is expedited and revolutionised with United Kingdom, Dubai, Switzerland and
efficient coordination between parties as Poland. Consumer engagement and financial
well as a reduction in operating costs. education looks like a key route to mar-
UK – CB Leading Fintech innovators in
ket for Fintech businesses. The provision
Another example is the new era of smart the UK look to be taking on the traditional
of advice to deal with the information,
banking. An Open Application Program- banking world head-on. Disruptors such
financial freedom and empowerment that
ming Interface (API) framework will be as Starling Bank, Clear Bank, Monzo and
Fintech can bring seems to go hand in
established to facilitate the increased Tandem are all classed as challenger
hand with current developments.
adoption of API by the banking sector. banks for just that reason.
This will promote innovation and improve

irglobal.com | page 13
Virtual Series | A Fintech Paradigm

AI also seems prevalent in many Fintech A lot of attention is also being paid by management services and includes
applications with chatbot technology all players to blockchain and artificial among its partnering companies Big
becoming an increasingly popular intelligence. Four accounting firms, asset managers
method of simplifying the user experi- and financial institutions.
Luxembourg – MTA In our view, the
ence.
most promising Fintech innovations in Another example is FundsDLT, a fund
Switzerland – HK By far the most fre- Luxembourg are in the areas of payment market infrastructure platform developed
quent innovations that Fintechs have services and blockchain-based financial by Fundsquare (a wholly owned subsidi-
to offer financial services are around services, which build on the foundational ary of the Luxembourg Stock Exchange),
automation. This is good and well and pillars of the country’s financial sectors. InTech and KPMG, connecting transfer
greatly overdue, but not overly exciting agents, payment systems and investors.
In the payment services market, start-up
in the sense that it will disrupt existing
companies such as Payconiq (a digital Malta – GM The Fintech ecosystem
value chains or even terminate existing
wallet and payment service provider) has already delivered a number of dis-
banking business models.
are growing and there are even signs rupting solutions to traditional operators,
Examples of these non-disruptive Fin- of consolidation. For example, Payconiq however this is just the start of what
techs include robo-advisors, most pay- is expanding to neighbouring countries can be achieved with such a disruptive
ment services based on traditional tech- and has acquired Digicash Payments (a approach enabled through technology.
nology and systems and also regulatory mobile payment platform with over 450 Many existing Fintech operators offer
technology (Regtech). Another example partnering companies). similar services, cutting through various
is regulatory arbitrage, including many layers and riding on top of an ecosystem
Meanwhile, established companies
crowdfunding platforms and ICOs, to the of partners to deliver quicker, easier pay-
are ramping up their development. For
extent they are trying to avoid regulation. ments solutions.
example, Daimler AG’s Mercedes Pay
Only a very limited number of Fintechs (formerly PayCash Europe S.A.) is a The ecosystem has been moving ahead
have a truly disruptive potential. In mobile payments platform allowing the with credit and lending facilities too,
addition to blockchain, or distributed car maker to develop mobility services however through AI technologies and the
ledger technology, I would mention here for its clients, which it may soon use power delivered through the analytical
artificial intelligence, e.g.: for credit risk to enter the ‘connected cars’ market. capabilities of volumes of data, Fintech
assessment and ICOs. Other promising innovations in payment organisations have started and will con-
services may also come from Amazon tinue to deliver other innovations in areas
Brazil – AC A lot of investment is being
and Paypal. Both companies have Lux- such as robo-advisors and offer better
made in mobile, user experience, data
embourg subsidiaries which are licensed tools towards the fight against money
analytics and payment gateways, fol-
by the Luxembourg financial markets laundering and financing of terrorism.
lowing the growth of these areas in the
authority (Amazon Payments (Europe),
Brazilian market.
e-money institution; Paypal (Europe),
The relationship of the Brazilians with credit institution) and are central to the
the financial market has already been companies’ upcoming innovations in
positively affected by the innovations peer-to-peer payments.
implemented by various Fintechs in spe-
Other promising innovations are in the
cific segments. I am not sure there is any
blockchain space, where there is a lot
innovation that is disruptive, but clearly
of public-private collaboration between
there are innovations that are being very
actors, and efforts are being made
well received by the population, particu-
to stimulate consumer adoption. One
larly in connection with retail banking,
example is Fundchain, a Luxembourg
robo-advisors and online lending.
blockchain research initiative which
explores uses for the technology in fund
SES SION T HR EE – R E G U L AT I O N

What is the general approach of the financial market

regulator or regulators in relation to Fintech? Do you
see a need for more regulatory action in order to
foster and enable the Fintech ecosystem?
Luxembourg – MTA The general We see a need for more regulatory that it will be difficult to accommodate
approach to Fintech regulation of the action to enable the Fintech ecosystem. all the risks presented by Fintech start-
Commission de Surveillance du Secteur Such action does not necessarily imply ups within the confines of the traditional
Financier, the Luxembourg financial more rules. Financial services regulation regulatory system. A more flexible, case-
market authority (the ‘CSSF’), is predom- is fairly comprehensive and Fintech prod- by-case approach from FINMA, would
inantly reactive. ucts and services are already subject to be warranted. Moreover, the recent ICO
the existing rules. We would welcome boom has resulted in a heavy workload
For example, the CSSF issued warn-
regulatory guidance as to the application for the Fintech desk and delays in
ings on 14 March 2018, on initial coin
of the existing regulatory regimes. Such answering requests from start-ups.
offerings (ICOs) and virtual currencies,
guidance should also consider the use
following statements from ESMA, IOSCO Malta – GM The very reason Fintech
of artificial intelligence, of large-scale
and other organisations. At present, the organisations have been successful is
data collection and monetisation, and
CSSF has not taken a formal stance the fact that they are primarily agile tech
of automation by Fintech firms. Similarly,
on the regulatory treatment of ICOs or operations, steering away from or cutting
we do not see the need to introduce a
issued any specific guidance to aid the through the regulatory implications. So,
general Fintech license, since it would
self-assessment by companies contem- pushing for regulation over Fintech may
introduce regulatory complexity and
plating an ICO. also imply a slowdown to the delivery
prevent a level-playing field for all
capabilities of Fintech organisations. This
In some matters, the CSSF has taken a actors. Alternatively, to stimulate start-up
is something that is yet to be seen, pos-
proactive stance. For example, the reg- and SME activity in the Fintech space,
sibly leading to a new breed of Fintech
ulator issued a Frequently Asked Ques- evidence-based exemptions to existing
organisations evolving from the current
tions (FAQ) in respect of AMLF/CFT and rules could be introduced.
ecosystem.
IT requirements for specific customer
Switzerland – HK The Swiss Financial
on-boarding/KYC methods, which pro- The regulatory landscape is evolving
Market Supervisory Authority (FINMA)
vide guidance on customer identification in Malta, and at a very quick pace. So
tries to take a positive stance in relation
through video chat. It has also granted far various regulatory bodies have been
to Fintechs and their potential, respond-
payment service provider licenses to two involved in the Fintech and blockchain
ing to considerable pressure from the
virtual currencies exchanges (BitFlyer industry, including the Maltese financial
political system. It has a Fintech desk
and Bitstamp). services and remote gaming authorities,
and has issued guidance and various
via consultation and position papers.
To our knowledge, the CSSF does not recommendations in order to clarify
Earlier in 2018, the Government of Malta
use innovation spaces or sandboxes. if and how regulations apply. It is also
announced plans to set up a new author-
At the same time, the CSSF engages possible to submit a project to FINMA in
ity focusing primarily on the regulatory
in a dialogue with the industry through order to obtain a non-action letter.
aspects of innovations delivered through
speeches and conferences in which it
There is a broad consensus that regula- blockchain, but also embracing Fintech
positions itself as a flexible and busi-
tion of financial services is needed, and organisations.
ness-minded regulator.
that further clarification is necessary. It
is becoming increasingly clear, however,

irglobal.com | page 15
Virtual Series | A Fintech Paradigm

Luis Santine pictured at the 2017 IR DealMakers Conference in Barcelona

Three bills have been presented in The above is planned to be implemented Since 2013, the Bank has been regulat-
parliament promising to make Malta the in the context of a jurisdiction with vibrant ing payment providers, however only the
first jurisdiction to regulate the current financial services and online gaming payment institutions that have a certain
vacuum in which distributed ledger tech- ecosystems that already embrace minimum volume of payments are sub-
nology (DLT) companies operate. Malta e-money institutions, payment service ject to more restrictive requirements and
holds an ambition to be the blockchain providers, and various other regulations obligations.
island, and the three bills refer to the including MIFID II and GDPR.
The Central Bank has also been working
establishment of the Malta Digital Inno-
Organisations such as Binance have on regulations for online credit solutions.
vation Authority (MDIA), the authority
recently moved their headquarters to After submitting a draft regulation to the
itself to regulate the digital innovation,
Malta in anticipation of the regulatory public in August 2017, the Central Bank
setting out a regime for the registration
setup in a jurisdiction that is set to fill the issued in April 2018 Resolution 4,656,
of technology service providers and a
regulatory vacuum. The key objective for which regulates the organisation and
third bill to set up a framework for cryp-
such a move is to operate in a regulated operation of two types of Fintechs in
tocurrencies.
context, something that so far is a key Brazil:
The cryptocurrency framework also challenge for many operators in the
i. Direct credit companies (Sociedade
includes a regime, developed by the Fintech and blockchain space, including
de Crédito Direto - SCD) are financial
Malta Financial Services Authority crypto exchanges.
institutions which provide loans and
(MFSA), for the approval of ICOs and
Brazil – AC The Brazilian Central Bank financing exclusively through an
the regulation of certain service provid-
sees the new business models as chal- online platform with their own capital,
ers dealing in Virtual Currencies (VCs)
lenging and is studying them in order to
including brokers, exchanges, wallet ii. Peer-to-peer lending companies
decide on a case by case basis whether
providers, asset managers, investment (Sociedade de Empréstimo entre
to regulate or not.
advisors and market makers. Pessoas - SEP) are financial insti-
 tutions that enable loans and In January 2018, CVM issued a note a securities offer. It is also considered
financing among people exclusively stating that investment funds cannot that some form of light-touch, caveat
through an electronic platform. invest in cryptocurrencies as these emptor regulation of ICOs would have
are not deemed as financial assets for the advantage of providing legitimacy
Such online credit Fintechs can only
regulatory purposes. It is unclear if and and discouraging bad actors from
operate after they obtain an authoriza-
how the Congress will try to regulate entering the market. Another possible
tion from the Central Bank and they are
cryptocurrencies. area in which regulation might be wel-
subject to other regulations applicable
come would be with regard to crypto-
to financial institutions. Capturing investment via crowdfund-
currency trading exchanges which are
ing emerged as an alternative to the
One example is Resolution 4,658, also not currently regulated.
financing of start-ups and was not
issued in April 2018, which establishes
properly regulated in Brazil until mid- Although many existing crypto
cyber security requirements for all
2017. Following a public hearing, the exchanges self-regulate, there have
institutions subject to Central Bank’s
Securities and Exchange Commission been calls for introducing licensing
authorisation. The resolution and other
(CVM) published on July 14, 2017, requirements for these exchanges
Central Bank regulations could repre-
CVM Instruction 588, regulating this and imposing obligations on them to
sent a major cost increase for these
type of operation. conduct anti-money laundering and
type of Fintechs in Brazil.
counter-terrorist financing checks on
Hong Kong – CM An example of
The authorities have not expressly counterparties.
the Hong Kong regulators’ positive
regulated or prohibited ICOs or cryp-
approach to Fintech is the estab- Another area in which regulation would
tocurrencies, but are following the
lishment of regulatory sandboxes as be welcome is crowdfunding, particu-
developments in these markets closely.
discussed above, in particular the larly equity crowdfunding and peer-to-
On a couple of opportunities, the Cen- further initiatives announced by the peer lending, which are not currently
tral Bank stated that there is no assur- HKMA in September 2017 designed permitted under Hong Kong’s regula-
ance that ‘virtual coins’ can be convert- to facilitate Hong Kong entering a new tory framework. Hong Kong’s Financial
ible into legal currency, clarified that era of smart banking. Previously, there Services Development Council pub-
‘virtual currencies’ are not to be mis- had been criticism that the HKMA FSS lished a paper calling for the establish-
taken for ‘electronic currencies’ (which only allowed large existing financial ment of an equity crowdfunding regime
result from conversion of currency in institutions to innovate, while technol- in Hong Kong. A crowdfunding regime
the context of payment arrangements ogy companies were excluded by reg- would be particularly welcome in Hong
subject to specific regulations), and ulations. The new initiatives opened the Kong given that the Hong Kong Stock
clarified that entities that issue, trade FSS to technology firms and created a Exchange’s proposal for a new third
and store virtual currencies are not new policy relating to the opening up board for the listing of start-up and
regulated, authorised or supervised of banks’ application programmes to early stage technology and other inno-
by the Central Bank. The Central Bank technology companies. vative companies is not to be adopted.
also alerted that any transactions with
With respect to ICOs, given the different Belgium – KB The supervision author-
virtual currencies involving international
types of ICO tokens, and the fact that ity (FSMA) is quite reactive on the mat-
transfers based on foreign currencies
some may be hybrid forms of different ter. Since 1st February 2017, new rules
are subject to the Brazilian currency
types, there is considerable uncertainty have come into effect for crowdfunding
exchange regulations and controls.
in many cases as to whether an ICO platforms. These platforms must be
In October 2017, the Brazilian Secu- involves a securities offer. ICOs which approved by the FSMA and comply
rities Exchange Commission (CVM) do not involve securities offers are with certain rules of conduct.
clarified that securities offered through currently not regulated in Hong Kong.
The FSMA issued a warning on ICOs
Initial Coin Offerings (ICO) cannot be
While this is welcome to the extent that on November 13, 2017 aimed at ICO
legally traded in specific trading venues
it has allowed ICOs to be issued and issuers and consumers. After the 2008
for virtual currencies, as these are not
offered in Hong Kong, there have been financial crisis, supervisors became
authorised by the CVM to make availa-
calls for more guidance as to the char- quite conservative. There was also little
ble securities trading environments in
acteristics which would render an ICO
Brazilian territory.

irglobal.com | page 17
Virtual Series | A Fintech Paradigm

NAME HERE pictured at the 2016 IR Annual Conference in Amsterdam

Members pictured at the 2018 IR ‘On the Road’ Conference in Toronto

political support for deregulation and consciously taken that message to the proof-of-concept where the technology
therefore, the FSMA now has a proac- market. The FCA has actively pushed supports the Bank’s mission of clearer
tive but prudent approach. their engagement across the UK, understanding of the Fintech industry.
outside of its London base – and the
Fintech companies are supposed to Cryptocurrency does not enjoy the
centre of Fintech activity in the UK. The
have basic knowledge of financial same regulatory understanding though.
message from the FCA is one of ‘we
regulations and must make sure their Regulators have failed to keep pace
are here to help’, further reinforcing the
projects have reached a certain level of with a market that they seem unwilling
ecosystem culture in the UK.
maturity. There is no formal ‘sandbox’, to commit on. Continual monitoring
but rather a ‘soundbox’ approach, The FCA Regulatory Sandbox allows and review is not serving to clear the
referring to sound rules giving access companies to test their innovative prod- confusion that reigns over the sector.
to European passports, which gives ucts out on consumers in a controlled Perhaps this is due to the uncertainty
them a firm footing from which to environment. This initiative provides of markets and currencies, or perhaps
innovate and oversight that is propor- participants with a supported route to because of the potential nightmare of
tional to their activities. A personalised market, lowering their cost to entry and policing either.
contact with the supervisory authority providing improved access to finance.
The widespread belief is that the lack
is always available through the contact Big players such as Barclays, HSBC
of regulation is restricting the growth of
point and much appreciated by Fintech and Lloyds Bank have participated
the cryptocurrency sector across the
companies. but the mainstay ‘cohorts’ are private
UK and potentially globally. UK start-
sector Fintech disruptors.
UK – CB The regulatory body for the ups are actually chasing the regulators
Fintech sector in the UK is the Finan- The Bank of England has got in on to ask ‘How will regulation work?’ This
cial Conduct Authority (‘FCA’). The the act too with its Fintech Accelera- could be a major issue for the UK if
FCA is actively encouraging Fintech tor project which supports exploring it doesn’t get its act together on reg-
businesses to engage with it, and has ulating cryptocurrency as the global
interest shows no sign of slowing down It should also be mentioned that a bill with the DCSX, provides access to a
despite market crashes and devalua- has been drafted to replace the Law regulated and transparent marketplace
tion. 138(I)/2001 on personal data, which through its unique platform and model
will implement the General Data Pro- that enables funding and investment
Cyprus – SF It is crucial that, while
tection Regulation Reg(EE)2016/679. in Fintech start-up companies in
certain regulations are favourable to
This is a response to the Fintech evo- exchange for shares.
Fintech start-ups, as soon as risks
lution as the need to avoid risks and
increase, the need for regulatory action The Curaçao Ministry of Economic
protect personal data becomes higher.
will also rise. More regulatory meas- Development has a number of initi-
ures will need to be taken in Cyprus, USA – DS There is a risk of over-regu- atives to increase attention to new
especially with regard to amendment of lation in areas such as cryptocurrency Fintech opportunities, including annual
existing legislations, the implementation and tokenisation, because of the prob- conferences and its innovation incuba-
of European regulations and directives lems with scammers and fraud right tor CITI.
and addressing some specific Fintech now.
Crypto and blockchain enterprises and
innovations.
We are seeing the US Securities projects in Curaçao have made com-
To begin with, the Law on Electronic and Exchange Commission (SEC) pliance their foundation and as such
Money 81(I)/2012, has been enacted and the Commodity Futures Trading have met existing regulations well. We
in Cyprus to regulate the issuance of Commission (CFTC) lining up with the consider this a differentiator for the
electronic money in the Republic of individual US States on the issues of jurisdiction, as it means no new regu-
Cyprus. It covers issuance in other EU/ blockchain, smart contracts and crypto- lation and special sandbox is needed.
EEA Member States or third countries currency. This is a very hot button topic
Foreign exchange bank account
by a natural person residing in Cyprus, at present with several issues that need
requirements need adjustment to allow
or a legal person incorporated in the to be resolved, including the proper
for compliant crypto and blockchain
Republic of Cyprus. It also covers the regulation of ICOs and the recognition
business. This is not a standalone of
authorisation and prudential supervi- of tokens and currencies as tangible
course, as the correspondent bank
sion of electronic money institutions. real world assets subject to wider use
issue remains a major challenge.
and tax.
Furthermore, the Cyprus Securities and
Exchange Commission, as the super- Curaçao – LS The local central banks
visory authority for Cyprus Investment of both Curaçao and Aruba are actively
Firms, market operators and data reviewing the current payments land-
reporting service providers, undertakes scape and outlining the requirements
to authorise such firms and ensure for a future state payment system. In
they comply with the Law 87(I)/2017, Aruba, for example, the ambition is to
enacted in January 2018 to implement start with the implementation of a new
MIFID II. payment infrastructure halfway through
2018, should show tangible progress
Regarding the regulation of e-com-
next year, with the ambition to have a
merce in Cyprus, the Law on Certain
fully modernised payment infrastructure
Legal Aspects of Information Society
in place by 2020.
Services in Particular Electronic
Commerce and Associated Mat- Other innovative approaches involving
ters156(I)/2004, implementing Direc- InfoCapital include working with part-
tive 200/31/EC, aims at ensuring the ner companies like Earlybird Funding
free movement of information society (EBF) who act as brokers on the
services between the Republic of Dutch Caribbean Securities Exchange
Cyprus and the EU/EEA Member (DCSX) platform.
States and additionally regulates online
EBF provides the tools necessary to
information services, online advertising
empower its community of investors
and marketing, online selling of prod-
to manage their investments in Fintech
ucts and services and online entertain-
companies effectively. EBF, together
ment services.

irglobal.com | page 19
Virtual Series | A Fintech Paradigm

Contacts
UK HEAD OFFICE KEY CONTACTS CONTRIBUTORS

IR Global Ross Nicholls Luis Santine (LS)

The Piggery Business Development Director InfoCapital – Curaçao
Woodhouse Farm ross@irglobal. com irglobal. com/advisor/luis-santine-jr
Catherine de Barnes Lane
Rachel Finch Adriano Chaves (AC)
Catherine de Barnes B92 0DJ
Channel Sales Manager CGM Advogados – Brazil
Telephone: +44 (0)1675 443396 rachel@irglobal. com irglobal. com/advisor/adriano-raposo-do-amaral-pin-
to-chaves
www. irglobal. com Nick Yates
info@irglobal. com Editor David Sorin (DS)
nick@irglobal. com McCarter & English LLP – USA
mccarter. com/David-J-Sorin/

Craig Blackmore (CB)

Verde Corporate Finance – UK
irglobal. com/advisor/craig-blackmore

Soteris Flourentzos (SF)

Soteris Flourentzos & Associates LLC – Cyprus
irglobal. com/advisor/soteris-flourentzos

Clinton Morrow (CM)

Charltons Law – Hong Kong
irglobal. com/advisor/clinton-morrow

Hans Kuhn (HK)

Zulauf Partner – Switzerland
irglobal. com/advisor/dr-hans-kuhn

Evelyn Maher
Bonn Steichen & Partners – Luxembourg
irglobal. com/advisor/evelyn-maher

Melvin Tjon Akon (MTA)

Bonn Steichen & Partners – Luxembourg
bsp. lu/professionals/associate/melvin-tjon-akon

Gordon Micallef (GM)

RSM Malta – Malta
rsm. global/malta/people/gordon-micallef

Kevin Bertouille (KB)

Everest Law – Belgium
everest-law. eu/nl/advocaten/kevin-bertouille

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