The Bureau of Consumer Financial Protection (BCFP), working in collaboration with 11 financial regulators and related organizations, is announcing an initiative to create the Global Financial Innovation Network (GFIN).
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 cooperation between financial services regulators on innovation-related topics.
The Consulting Document sets out the three main proposed 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.
The BCFP and the other regulators are seeking views on the mission statement for the GFIN, its proposed functions, and where it should prioritize activity. The group would also welcome hearing from other interested regulators who wish to get involved. In the United States, interested parties can provide feedback to the Bureau’s new Office of Innovation.
“Joining the Global Financial Innovation Network (GFIN) demonstrates the Bureau’s commitment to promoting innovation by coordinating with state, federal and international regulators,” said BCFP Acting Director Mick Mulvaney. “We look forward to working closely with other regulatory authorities—whether in the United States or abroad—to facilitate innovation and promote regulatory best practices in consumer financial services.”
Today’s announcement follows an initial whitepaper on the idea of a ‘global sandbox’ led by the United Kingdom’s Financial Conduct Authority (FCA) in February 2018. Some 50 responses were received to the earlier paper and supported the idea of regulators collaborating on this topic. Key themes to emerge in the feedback were:
- Regulatory cooperation: 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).
The working group is asking for feedback on questions contained in the Consultation Document by October 14, 2018. Over the course of the next two months, the group will engage with interested parties across different jurisdictions. In the fall, the working group will assess feedback and agree on next steps.
In the United States, interested stakeholders can share written and/or other feedback directly to the Bureau’s Office of Innovation, which looks forward to active stakeholder consultation on this matter. Contact information for the Office is as follows: firstname.lastname@example.org. Commenters should be aware that the content of comments may be subject to release under the Freedom of Information Act.
Comments can also be shared with the FCA and other regulators, with contact information available within the Consultation Document.
The Office of Innovation is intended to help the Bureau fulfill its statutory mandate to promote competition, innovation, and consumer access within financial services. To achieve this goal, the new office will focus on creating policies to facilitate innovation, engaging with entrepreneurs and regulators, and reviewing outdated or unnecessary regulations.
In addition to the BCFP and the FCA, the organizations currently involved in the GFIN are: Abu Dhabi Global Markets; Autorité des marchés financiers (Québec); Australian Securities & Investments Commission; Central Bank of Bahrain; Dubai Financial Services Authority; Guernsey Financial Services Commission; Hong Kong Monetary Authority; Monetary Authority of Singapore; Ontario Securities Commission; and Consultative Group to Assist the Poor (CGAP).