A second regulatory reform focused on crowdfunding has gone into effect in France; the reform will broaden the offerings available for crowdfunded investing and lending; on crowdfund platforms, companies can now raise 2.5 million euros in equity funding through simple shares, plain vanilla bonds, preferred shares, participatory notes and convertible bonds; on crowdlending platforms, borrower limits were increased for qualified lenders to 2,000 euros individual lending per project; the reform also introduces new minibon debt securities. Source
Moody's has released a report commenting on the new FDIC guidelines for bank lending through third-party lenders; guidance from the FDIC is proposed and seeks to potentially improve controls on bank lending through marketplace loans; the new FDIC guidance will help to improve the overall quality of loans on marketplace lending platforms, according to Moody's; the new controls focus on greater analysis and oversight by banks of marketplace lenders' credit underwriting models to ensure that they align with the bank's lending terms. Source
Korea's Financial Services Commission just issued a guideline that limits most individual investors from committing more than 10 million won ($8,750) to P2P investments in a year; those individuals who have earnings over 100 million won ($87,500) can still commit up to 40 million won to P2P; Korean P2P platforms are complaining that investments in any equity project or loan portfolio tend to be skewed to a few individuals who invest more than 10 million won (60% of investors fall into this category on average across platforms there), therefore the new regulation will drive up funding costs; regulators say this over-concentration of funds from few investors is precisely the trend they hope to curtail. Source
The Federal Council of Switzerland is seeking to make the regulatory framework more flexible for fintech companies; they have instructed the Federal Department of Finance to devise a policy statement setting such a direction; recommendations to be considered include: (a) setting a maximum of 60 days for holding money in a settlement account, which will make settlements better aligned with crowdfunding project funding deadlines, (b) creating of an innovation sandbox in which a platform can accept funds up to CHF 1 million, and (c) establishing a new fintech license, with fewer restrictions than on traditional banks. Source
The Financial Conduct Authority (FCA) has approved LendingCrowd for full FCA authorization which allows the company to offer investments through IFISAs; the approval follows a £2.75 million Scottish Enterprise investment in the platform's small business loans last week; the FCA's last approval was in October for P2PFA member firm, Lending Works. Source
On November 7, China passed data control laws that had been put on the table in August; the laws include government security checks on companies in finance, telecommunications and other critical data industries as well as mandatory in-country data storage; also, individuals will have to register with their real names on messaging services; businesses are concerned that information flow will be curtailed in industries where this is critical to be effective and corporate security checks have the potential to be invasive rather than simply regulatory; the law will go into effect next summer; some aspects of the law will need clarification over time from the government. Source
Thomas Curry, Comptroller of the Currency, gave more insight on the Office of the Comptroller of the Currency's (OCC) plans for fintech regulation at a banking and innovation conference in London; Curry reported that regulation would be consistent with current banking standards, noting in his comments that, "if the OCC decides to grant a national charter in this area, the institution will be held to the same high standards of safety, soundness and fairness that other federally chartered institutions must meet"; the OCC is continuing with its plans for an Innovation Office and Curry said he would be releasing a white paper on fintech innovation. Source
The Economist magazine's intelligence unit (EIU) has published a report on regulatory support for financial inclusion in developing countries and it is now gaining traction with press and analysts; the report scores countries on having an inclusiveness strategy and building governmental and private sector expertise, then provides in-depth details in areas including credit markets, non-regulated lenders, payments and insurance; Colombia ties Peru this year for the most progressive country; India has shown the most improvement; Latin America and East/South Asia are leaders regionally while Africa and the Middle East remain behind; the EIU performed the research in conjunction with the Center for Financial Inclusion at Accion and the Multilateral Investment Fund at the Inter-American Development Bank. Source
New government fintech initiatives are trending across the globe and the European Commission (EC) is one of the most recent regulatory agencies to add a fintech group; the EC is the governing regulator for the European Union; it has announced a Financial Technology Task Force (FTTF) to be co-chaired by DG FISMA and DG CONNECT; the FTTF will facilitate regulatory communication in the areas of financial regulation, digital business, competition and consumer protection. Source
Scott Morrison, Australia's treasurer, spoke about regtech at the Fintech Australia Summit; the treasurer discussed a regtech collision occurring in fintech where both crowdfunding firms and traditional banks are benefiting from increased technological innovation around regulation; likely that the marketplace lending ecosystem could see expansion in regulatory technology innovation. Source