The Bank of Japan (BOJ) returns talking about the adoption of financial technology in their system in a seminar hosted at their HQ in Tokyo July 29. This comes after the central bank announcement this year in April to have established an in-house section at the BOJ in charge of fintech to explore the opportunities and to offer guidance to financial institutions seeking to step into the fintech market.
The adoption of equity and debt crowdfunding has left most if not all policy makers and regulatory bodies challenged to find the right framework to properly regulate the array of platforms launching into the market. These platforms have given accredited and retail investors alike access to alternative investments they would not otherwise have. One area overlooked by most investors and now being addressed by regulatory bodies is investment liquidity. Venture capitalists and business angels traditionally would achieve liquidity with the acquisition of the investment. Crowdfunding differs, an IPO or acquisition isn’t out of the questions but it certainly is less likely.
Bank of Thailand (BoT) Governor Veerathai Santiprabhob at the C asean Forum's "Positioning Thailand's Fintech Ecosystem" event announced more regulation for the growing fintech sector in order to protect consumers, prevent systemic risk and help the development of the market. Following the path of Governments and regulators of the UK, France, Australia and Singapore the intention is to create a regulatory sandbox that can be used as a testing ground for fintech companies.
The US House of Representatives passed a new bill on securities law, the “National Securities Exchange Regulatory Parity Act of 2016” (H.R. 5421) , on Tuesday 12th of July, just a week after successfully passing other two bills related to investing, the “Supporting America's Innovators Act” and the “Fix Crowdfunding Act”.
The US House of Representatives passed two bills on Tuesday 5th of July, aiming to make it easier for entrepreneurs to raise money and to improve conditions for SME and startup investing.
The Monetary Authority of Singapore (MAS) launched a consultation paper in February last year proposing measures to facilitate access capital for startups and SMEs. With the responses received, 8 June 2016 MAS announced new measures to simplify the use of securities crowdfunding (SCF) for companies that are looking to raise funds, as well as for crowdfunding platform operators.
We have recently seen several governments and financial regulators presenting regulatory sandboxes and now central banks are also stepping in, with a “Fintech Accelerator” that was announced by Mark Carney, the governor of the Bank of England (BoE) on Friday. It’s now more and more clear that the financial technology industry is maturing, transitioning from disruption to a sustainable growth, well supported and embraced by institutions.
Recently I had the privilege to discuss changes and macro trends globally in different industries with a group of change management executives. While we discussed various topics, including incumbents abilities to innovate in new markets, cannibalization among other topics, we got talking about the changes of financial services institutions becoming the new effective ‘bit pipes’ (comparison from telco’s) and more so, if this is actually a bad thing?
Governments and regulators have been hard at work in recent months to get the most out of the revolution happening in the financial services industry with the nascent fintech sector. Creating a regulatory sandbox, to mitigate risk and let innovation flourish, is the path they have decided to follow.
While more than a third of all US states have enacted laws allowing digital investing, California is still without an intrastate securities crowdfunding regulation. Investing in startups, family-businesses and more in general in SMEs, is not that easy yet. The good news is that things are likely to change shortly.