The Global Financial Innovation Network - Thistle Initiatives

What has happened?

The FCA has, in collaboration with 11 financial regulators and related organisations, announced the creation of the Global Financial Innovation Network (GFIN), building on the FCA’s proposal earlier this year to create a ‘global sandbox’. The network will seek to provide a more efficient way for innovative firms to interact with regulators, helping them navigate between countries as they look to scale new ideas. It will also create a new framework for co-operation between financial services regulators on innovation-related topics, sharing different experiences and approaches.

The collaborative effort, involving regulators from around the world, is also launching a consultation on the role the GFIN should play in delivering its objectives, including the tools it will use. The consultation, available here, sets out the three main functions of the GFIN:

• Acting as a network of regulators to collaborate and share experience of innovation in respective markets, including emerging technologies and business models
• Providing a forum for joint policy work and discussions
• Providing firms with an environment in which to trial cross-border solutions.

As part of the consultation, the group is seeking views on the mission statement for the GFIN, its proposed functions, and where it should prioritise activity. The group is also keen to hear from other interested regulators or related organisations who wish to get involved.

This announcement follows an initial consultation on the idea of a ‘global sandbox’ in February 2018 and provides an update on the next steps of the project. 50 responses were received to the earlier paper and were positive about the idea of regulators collaborating on this topic. Key themes to emerge in the feedback were:

• Regulatory co-operation: Respondents were supportive of the idea of the initiative providing a setting for regulators to collaborate on common challenges or policy questions that firms face in different jurisdictions
• Speed to market: Respondents cited that one of the main advantages for the global sandbox could be reducing the time it takes to bring ideas to new international markets
• Governance: Feedback highlighted the importance of the project being transparent and fair to those firms wishing to apply for cross-border testing
• Emerging technologies/business models: A wide range of topics and subject matters were highlighted in the feedback, particularly those with notable cross-border application. Among issues highlighted were artificial intelligence, distributed ledger technology, data protection, regulation of securities and Initial Coin Offerings, know your customer and anti-money laundering.
• The working group is asking for feedback on the consultation questions by 14 October 2018. Over the course of the next two months, the group will engage with interested parties across the different jurisdictions involved in the project. In the Autumn, the working group will assess feedback and agree on next steps.

The organisations involved in the GFIN at present are Abu Dhabi Global Markets, Autorité des marchés financiers (Québec), Australian Securities & Investments Commission, Central Bank of Bahrain, United States Bureau of Consumer Financial Protection, Dubai Financial Services Authority, Financial Conduct Authority, Guernsey Financial Services Commission, Hong Kong Monetary Authority, Monetary Authority of Singapore, Ontario Securities Commission and the Consultative Group to Assist the Poor.

The GFIN is designed to be an inclusive community of financial services regulators and related organisations. The eventual membership of the GFIN that take this project forward is still to be determined. The named organisations above are committed to exploring the idea further, but the consultation process will help inform any future involvement. Similarly, regulators not named may decide to get involved in the future, or after the formal launch of the GFIN.

How Thistle can help you?

Thistle will continue to keep this area under review and will issue further updates where necessary. Please contact Thistle if you need assistance in relation to any of these issues.