FCA launches global innovation network
Written by Peter Walker
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).
The network builds on the FCA’s proposal earlier this year to create a global sandbox, providing a more efficient way for innovative firms to interact with regulators, helping them navigate between countries as they look to scale-up new ideas.
It will also create a new framework for co-operation between financial services regulators on innovation-related topics.
As part of the launch, a consultation is starting, looking at the role the GFIN should play in delivering its objectives and the tools it will use. It sets out the three main functions of the GFIN:
• To act as a network of regulators to collaborate and share experience of innovation in respective markets, including emerging technologies and business models.
• Providing a forum for joint policy work and discussions.
• Providing firms with an environment in which to trial cross-border solutions.
As part of the consultation, the group of regulators is seeking views on the mission statement for the GFIN, its proposed functions, and where it should prioritise activity.
Over the course of the next two months, the group will engage with interested parties across the different jurisdictions involved in the project. In the autumn, it will assess feedback and agree on next steps.
Christopher Woolard, the FCA’s executive director of strategy and competition, stated: “The establishment of the GFIN can help share the experiences and knowledge from across different markets, while also providing a platform for innovative firms wishing to scale their propositions via testing in multiple countries.”
The FCA originally consulted on a global sandbox in February 2018, with 50 responses received that were positive about the idea of regulators collaborating on this topic.
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. They cited one of the main advantages for the global sandbox could be reducing the time it takes to bring ideas to new international markets.
Feedback highlighted the importance of the project being transparent and fair to those potential firms wishing to apply for cross-border testing. Among the issues highlighted were artificial intelligence, distributed ledger technology, data protection, regulation of securities and Initial Coin Offerings, know your customer and anti-money laundering.