Hong Kong Towards a Leading Global FinTech Hub

28 29 Regulation Part I: Examination of Seven Fintech Hubs Hub Country Fintech-specific framework Characteristics of current regulatory approach Main regulatory body London UK Yes · No single regulatory framework to govern fintech activities, but depends on the nature, scale, and business size of financial institutions and fintech companies · Fintech-specific strategy roadmap with a long-term national development plan BoE and FCA New York US No · Multiple frameworks at both federal and state levels Federal Reserve, OCC, SEC, CFTC, and CFPB San Francisco US No · Multiple frameworks at both federal and state levels Federal Reserve, OCC, SEC, CFTC, and CFPB Shanghai China No · Transitioning from loose to pronounced regulations · Started to establish top-down fintech- specific strategic roadmap and long- term development plans in recent years PBOC Singapore Singapore Yes · Top-down fintech-specific framework with national level and long-term development plan MAS Tokyo Japan No · Relaxed regulatory approach; focus on cryptocurrency and digital payment market development with national-level development plan to be implemented by the Tokyo Metropolitan Government (TMG) JFSA Zurich Switzerland No · Adopts a technology-neutral and principle-based approach · Established a national and comprehensive sustainable finance development plan FINMA Note: BoE = Bank of England; FCA = Financial Conduct Authority; OCC = Office of the Comptroller of the Currency; SEC = Securities and Exchange Commission; CFTC = Commodity Futures Trading Commission; CFPB = Consumer Financial Protection Bureau; PBOC = People’s Bank of China; MAS = Monetary Authority of Singapore; JFSA = Japan Financial Services Agency; FINMA = Swiss Financial Market Supervisory Authority [ Exhibit 9 ] : Overview of Fintech Regulatory Environments of the Selected Hubs Working with Regulators Worldwide Inter-governmental finance and economics organizations such as the Financial Stability Board (FSB), the International Organization of Securities Commissions (IOSCO), and the International Association of Insurance Supervisors (IAIS) have issued guidance for national authorities who regulate and supervise fintech-related activities. Some examples of how the global regulatory community work together to identify best regulatory practices are: (1) the discussion on policy and supervisory initiatives by the Basel Committee on Banking Supervision (BCBS); 50 (2) the paper, Crypto-assets: Work underway, regulatory approaches and potential gaps by FSB; 51 and the paper, Policy responses to fintech: A cross-country overview (a review of published regulations in 31 different jurisdictions) 52 by the Bank for International Settlements (BIS). It is important for countries to participate in international organizations and foster good relations with other countries to encourage cooperation and strengthen their ability to mutually address global challenges. Establishing good ties with other countries can also create additional opportunities for local economies and businesses. Some of the examined fintech hubs have shown a strong presence in fostering international collaboration: · The New York State Department of Financial Services (NYDFS) currently has cooperation agreements with Israel, Japan, Thailand, the UK, and France on cross- border fintech development. NYDFS is a member of the Global Financial Innovation Network (GFIN), 53 which was launched in 2019 and organized by an international group of financial regulators and related organizations in the UK to facilitate cooperation among worldwide financial regulators. · Singapore is also a member of GFIN, and has membership in the ASEAN Financial Innovation Network, along with the International Finance Corporation (IFC), World Bank Group and the ASEAN Bankers Association (ABA), for facilitating digital transformation of the banking and finance sectors across the ASEAN region. 54 As of March 2021, Singapore has signed 34 fintech cooperation agreements with governments worldwide, including China, Hong Kong, Japan, the UK, and the US. 55 · A number of agreements were signed at the second Singapore-Shanghai Comprehensive Cooperation Council (SSCCC) meeting 56 in 2020 that broaden the cross-border cooperation between the two fintech hubs. Up to ten MOUs were signed, including the DBS Bank – Shanghai Pudong Development Bank MOU to expand their existing financial technology and applications partnership, and the UOB – Shenergy Group MOU to drive the adoption of green energy products and services. A month prior to the 50. Bank for International Settlements (BIS). | Basel Committee discusses policy and supervisory initiatives and approves implementation reports (Oct 2019). | https://www.bis.org/press/p191031.htm 51. Financial Stability Board (FSB). | Crypto-assets: Work underway, regulatory approaches and potential gaps (May 2019). | https://www.fsb.org/wp-content/uploads/P310519.pdf 52. Bank for International Settlements (BIS). | Financial Stability Institute Insights on policy implementation No 23: Policy responses to fintech: a cross-country overview (Jan 2020). | https://www.bis.org/fsi/publ/insights23.pdf 53. The Global Financial Innovation Network (GFIN). https://www.thegfin.com/ 54. ASEAN Financial Innovation Network. https://www.whub.io/startups/asean-financial-innovation-network 55. Monetary Authority of Singapore. | FinTech Cooperation Agreements (2021). | https://www.mas.gov.sg/ development/fintech/fintech-cooperation-agreements 56. The Business Times. | Singapore, Shanghai to boost collaboration in financial services, innovation (Dec 2020). | https://www.businesstimes.com.sg/government-economy/singapore-shanghai-to-boost-collaboration-in- financial-services-innovation-0