Hong Kong Towards a Leading Global FinTech Hub

32 33 Regulation Part I: Examination of Seven Fintech Hubs City Regulatory Innovation Initiatives London · First global financial center to pioneer both a regulatory sandbox and open banking · First G7 nation to publish the DLT and Cryptoassets Guidance on outsourcing to the cloud · 28 organizations participated in the Digital Sandbox Pilot program, which was launched to help the financial industry during the COVID-19 pandemic; the program provides financial innovators with tools to collaborate and develop financial services New York · Developed new regulation regime by introducing the Securities Clarity Act in 2019, to regulate digital assets and other emerging technologies · DFS FastForward was launched in 2020 to encourage fintech innovation for the post-COVID-19 economic recovery · In 2020, Project Whitehall was established to assist insurtech innovators seeking regulatory guidance and support · In 2020, the Digital Commodity Exchange Act was published to fill in the regulatory gaps between the two main market regulators – the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), in order to protect the investors San Francisco · In 2020, the California Department of Business Oversight (DBO) was renamed and revamped to the Department of Financial Protection and Innovation (DFPI) , with new and expanded responsibilities in regulations, licensing and innovation with a view to foster financial service and fintech development Shanghai · The People’s Bank of China issued the FinTech Development Plan (2019-2021) , a three-year development plan to improve the top- down design of the fintech industry · In 2020, the PBOC Shanghai branch announced the launch of the Shanghai Fintech Innovation Regulatory Trial for the city to become China’s hub for both innovation applications and technology research for fintech by 2030; Kicked off its first Fintech Sandbox Trial in Shanghai, with eight trial projects covering fintech solutions such as smart investment advisory services, blockchain-based small and micro business financing services, and digital financial risk control projects business leaders from major financial firms to form the International Technology Advisory Panel (ITAP) to advise Singapore on how to enhance the country’s fintech services. 68 One key issue is how public agencies and regulatory regimes can help build public confidence and trust towards fintech products and services. 69 68. Monetary Authority of Singapore. | International Technology Advisory Panel. | https://www.mas.gov.sg/who-we- are/MAS-Advisory-Panels-and-Committees/international-technology-advisory-panel 69. Monetary Authority of Singapore. | MAS sets up International Technology Advisory Panel (Aug 2016). | https:// www.mas.gov.sg/news/media-releases/2016/mas-sets-up-international-technology-advisory-panel City Regulatory Innovation Initiatives Singapore · Introduced a single, clear, and comprehensive Payment Services Ac t in 2019 · Issued the first two digital banking licenses and another two digital wholesale bank licenses in 2020 · Announced a S$125mn (US$94mn) COVID-19 Support Package for financial institutions and fintech companies for recovery, training and future growth · Enhanced Singapore fintech companies’ access to digital platforms and tools by offering six months’ free access to global online sandboxes and API Exchange (APIX) · Developed a centralized national digital identity scheme – Singapore Personal Access (SingPass) – that allows users to access more than 60 government agencies with one password, now more than 3.3 million registered users Tokyo · To deepen and foster digital currency development, two important laws, the Banking Act and the Settlement Act , were amended in 2016 to regulate virtual currency exchanges and to relax banks’ investments in fintech firms · The TMG has been issuing Tokyo Green Bonds since 2017 to position Tokyo as a smart energy city · Issued Guidance to the Asset Management Industry in Japan in English, to provide a clear explanation of Japanese financial regulations and registration procedures for foreign financial institutions and fintech companies · Provided funding support to the Tokyo ESG Fund in 2020, to promote ESG investment in Japan · Provides incentives such as the government’s Tokyo Financial Awards , which gives recognition to innovative financial companies and adopts an ESG approach Zurich · The Swiss Financial Services Act (FinSA) and the Financial Institutions Act (FinIA) were published in 2020, to govern the provision of financial services, offer financial instruments and strengthen investor protection, as well as to introduce new measures for standardizing licensing requirements for financial institutions · In 2017, the Swiss Federal Council (SFC) launched a fintech-specific regulatory sandbox that allowed companies to accept public deposits of up to CHF$1mn (US$1.1mn) without the need to apply for a banking or fintech license · The SFC published the Fintech License in 2019, with a new licensing category with a streamlined reporting process to serve the needs of fintech business models (Cont.) [ Exhibit 10 ] : Examples of Regulatory Innovation Initiatives of the Selected Hubs [ Exhibit 10 ] : Examples of Regulatory Innovation Initiatives of the Selected Hubs