INTERNATIONAL: FCA Collaborates on new Consultation to Explore the Opportunities of a Global Financial Innovation Network

Wednesday August 22 2018

The Financial Conduct Authority (FCA) has, in collaboration with 11 financial regulators and related organisations, announced the creation of the Global Financial Innovation Network (GFIN), building on the FCA’s proposal earlier this year to create a ‘global sandbox’.

The network will seek to provide a more efficient way for innovative firms to interact with regulators, helping them navigate between countries as they look to scale new ideas. It will also create a new framework for co-operation between financial services regulators on innovation related topics, sharing different experiences and approaches.

The collaborative effort, involving regulators from around the world, is also  launching a consultation on the role the GFIN should play in delivering its objectives, including the tools it will use.

The consultation sets out the three main functions of the GFIN:

• act as a network of regulators to collaborate and share experience of innovation in respective markets, including emerging technologies and business models;
• provide a forum for joint policy work and discussions; and
• provide firms with an environment in which to trial cross-border solutions.

As part of the consultation, the group is seeking views on the mission statement for the GFIN, its proposed functions, and where it should prioritise activity. The group is also keen to hear from other interested regulators or related organisations who wish to get involved.

The announcement follows an initial consultation on the idea of a ‘global sandbox’ in February 2018 and provides an update on the next steps of the project. 50 responses were received to the earlier paper and were positive about the idea of regulators collaborating on this topic. Key themes to emerge in the feedback were:

• Regulatory co-operation: Respondents were supportive of the idea of the initiative providing a setting for regulators to collaborate on common challenges or policy questions firms face in different jurisdictions.
• Speed to market:  Respondents cited one of the main advantages for the global sandbox could be reducing the time it takes to bring ideas to new international markets.
• Governance: Feedback highlighted the importance of the project being transparent and fair to those potential firms wishing to apply for cross-border testing.
• Emerging technologies/business models: A wide range of topics and subject matters were highlighted in the feedback, particularly those with notable cross-border application. Among issues highlighted were artificial intelligence, distributed ledger technology, data protection, regulation of securities and Initial Coin Offerings (ICOs), know your customer (KYC) and anti-money laundering (AML).

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