Hong Kong Towards a Leading Global FinTech Hub

40 41 Government Support Part I: Examination of Seven Fintech Hubs Fintech Hub Sandbox available Participants of GFIN’s cross- border testing Sandbox jurisdiction Authority Launch date of first sandbox in jurisdiction Sandbox features Hong Kong Yes Yes Hong Kong HKMA, SFC, IA Sep 2016 (HKMA’s Fintech Supervisory Sandbox) The sandboxes of the HKMA, the SFC, and the IA are linked up so that there is a single point for firms intending to conduct a pilot trial of a cross- sector fintech product. Source: FCA, MAS, PBOC, HKMA, SFC, IA, Japan External Trade Organization, CoinGeek, FINMA, Office of the Attorney General (Arizona State), Native American Financial Services Association, GFIN (Cont.) [ Exhibit 12 ] : Fintech Sandboxes in the Selected Hubs and their Relevant Jurisdictions Sustainable Fintech Development Plans To ensure fintech’s growth can be long-term and sustainable, public funding schemes and regulatory sandboxes are only a starting point. Governments should regularly assess the fintech landscape locally, regionally, and globally, to draw up development plans for the short -, medium-, and long- term. The Asian hubs: Shanghai, Singapore, and Tokyo China is one of the most proactive countries with development plans for fintech. In July 2015, the PBOC, Ministry of Industry and Information Technology (MIIT) and eight other authorities jointly published the Guiding Opinions on Promoting the Sound Development of Internet Finance , 95 which is regarded as the legislative foundation for internet finance businesses in China. In April 2018, the CBIRC established a financial reform roadmap in the Measures on Facilitating the Further Opening-up of Banking and Insurance Sectors , 96 which also set out the then-current legislation and future action plan. In July 2019, 11 measures were announced 97 by the Office of Financial Stability and Development Committee of the State Council of the China’s Central Government to further open up the financial sector. In September 2019, the PBOC released a three-year FinTech Development Plan 98 that listed the key development targets and missions for fintech. The Plan proposes to establish and improve the “four beams and eight pillars” for China’s fintech development by 2021, and outlined six key tasks and priorities for strengthening the capability of fintech applications and the regulation of technology-driven innovations, preventing financial risks, and driving China’s fintech development into the international forefront. According to the three- year plan, China will strengthen fintech regulations and build a fundamental and unified regulatory system. The Singapore government has launched a series of initiatives to upgrade its tech infrastructure in the past decade. In 2016, it published a four-year plan entitled Research Innovation and Enterprise 2020 Plan 99 that earmarked S$19bn (US$142bn) for investment in the country’s digital economy, advanced manufacturing and engineering, and more. In 2017, the MAS launched its Financial Services Industry Transformation Map (ITM), 100 which is a strategic plan for the sector after months of deliberation between the industry and the MAS. The ITM outlines the growth strategies by business lines – with fintech being one of them – and agendas for talent development, innovation and technology adoption. Being the world’s third largest economy 101 after the United States and China, the Japanese financial services market has been expanding rapidly, with a market size worth around US$1.96bn in 2018 and expected to grow to more than US$11bn by 2022. 102 In 2016, the Japanese government designated fintech as a promising growth area in its Japan Revitalization Strategy 2016 . Since then, the government has modified regulations to promote long-term growth of the sector. This includes amending the Banking Act 103 to establish IT-related subsidies for developing fintech businesses which encouraged many Japanese banks to open their APIs to fintech firms to enhance collaboration and digital transformation. In 2017, TMG is determined to make Tokyo an “unrivalled global financial center”, 104 which was unveiled in the “Global Financial City: Tokyo” Vision . Following the Vision are initiatives that revitalize the Japanese financial sector in order to re-build Tokyo as the top global financial city in Asia. With a primary focus of attracting foreign startup companies to Tokyo, TMG launched the accelerator program “FinTech Business Camp Tokyo” in May 2019, and selected 12 companies from six different regions including Hong Kong, Singapore, and the UK to participate. 105 A similar program entitled “FinTech Program: Asia meets Tokyo” started accepting applications in late 2020, and 52 companies from nine countries or regions in Asia applied. Eight companies including four from Singapore and three from Hong Kong were invited to participate in the program. 106 95. HKTDC Research. | China Issues Guidelines on Development of Internet Finance (Aug 2015). | https://hkmb. hktdc.com/en/1X0A34J5/hktdc-research/China-Issues-Guidelines-on-Development-of-Internet-Finance 96. Norton Rose Fulbright. | China Now – Regulatory Reform in the Financial Services Industry (May 2018). | https:// www.nortonrosefulbright.com/en/knowledge/publications/ec8bbc63/china-now---regulatory-reform-in-the- financial-services-industry 97. The State Council, The People’s Republic of China. | Measures for Further Opening Up the Financial Sector (Feb 2021). | http://english.www.gov.cn/services/investment/202102/24/content_WS6035aa9fc6d0719374af960c. html 98. China Banking News. | Chinese Central Bank Releases Fintech Development Plan for 2019 – 2021 (Aug 2019). | https://www.chinabankingnews.com/2019/08/23/chinese-central-bank-releases-fintech-development-plan- for-2019-2021/ 99. National Research Foundation, Prime Minister’s Office of Singapore. | Research Innovation Enterprise 2020 Plan: Winning the Future through Science and Technology (Aug 2016). | https://www.mti.gov.sg/-/media/MTI/ Resources/Publications/Research-Innovation-and-Enterprise-RIE-2020/RIE2020.pdf 100. Monetary Authority of Singapore. | Financial Services Industry Transformation Roadmap . | https://www.mas . gov.sg/development/financial-services-industry-transformation-roadmap 101. International Monetary Fund. | World Economic Outlook Database (Apr, 2021). | https://www.imf.org/en/ Publications/WEO/weo-database/2021/April 102. Yano Research Institute. (Sept 2019). https://www.yanoresearch.com/en/press-release/show/press_id/2232 103. Nomura Research Institute. | APIs are essential to Japanese banking innovation (Jan 2020). | https://www.nri. com/en/knowledge/publication/fis/lakyara/lst/2020/01/01 104. Fintech News Hong Kong. | Fintech In Japan: How is The World’s 3rd Largest Economy Tackling Fintech? (Jan 2019). | https://fintechnews.hk/8169/fintechjapan/fintech-in-japan-overview-landscape/ 105. Tokyo Metropolitan Government. | Tokyo Metropolitan Government has selected the foreign companies which will participate in the Accelerator Program FinTech Business Camp Tokyo (Aug 2019). | https://www.metro . tokyo.lg.jp/english/topics/2019/0809_02.html 106. Tokyo Metropolitan Government. | Announcing the companies participating in TMG’s “FinTech Program: Asia meets Tokyo” accelerator program (Jan 2021). | https://www.metro.tokyo.lg.jp/english/topics/2021/0108_01.html