The European Commission has unveiled an Action Plan on how to harness the opportunities presented by FinTech, which includes creating regulation for crowdfunding.
With the view of making Europe a global hub for FinTech, the Commission has set out its Action Plan to enable the financial sector to make use of the rapid advances in new technologies, such as blockchain, artificial intelligence and cloud services.
It is putting forward new rules that will help crowdfunding platforms to grow across the EU’s single market and wants to make markets safer and easier to access. In addition, the Commission is proposing a pan-European label for platforms, so that a platform licensed in one country can operate across the EU.
While crowdfunding is gaining popularity, one of the biggest hurdles is the lack of common rules across the EU, which raises compliance and operational costs and prevents crowdfunding platforms from expanding across borders.
However, once adopted by the European Parliament and the Council, the comisson’s proposed regulation will allow platforms to apply for an EU label based on a single set of rules. This will enable them to offer their services across the EU and investors on crowdfunding platforms will be protected by clear rules on information disclosures, rules on governance and risk management and a coherent approach to supervision.
Valdis Dombrovskis, vice-president responsible for financial stability, financial services and capital markets union, said: “To compete globally, Europe’s innovative companies need access to capital, space to experiment and scale to grow. This is the premise for our FinTech Action Plan. An EU crowdfunding licence would help crowdfunding platforms scale up in Europe. It will help them match investors and companies from all over the EU, giving more opportunities for firms and entrepreneurs to pitch their ideas to a wider base of funders.”
The Action Plan sets out 23 steps to enable innovative business models to scale up, support the uptake of new technologies, increase cybersecurity and the integrity of the financial system. These include presenting a blueprint with best practices on regulatory sandboxes, based on guidance from European Supervisory Authorities. A regulatory sandbox would allow FinTech startups and other innovators to conduct live experiments in a controlled environment, under a regulator’s supervision.
The Commission said it will also run workshops to improve information-sharing when it comes to cybersecurity and will host an EU FinTech Laboratory where European and national authorities will engage with tech providers in a neutral, non-commercial space.
As part of the action plan, it will also look to consult on how best to promote the digitisation of information published by listed companies in Europe, including by using innovative technologies to interconnect national databases.
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst
