The consultation provides an overview of the BCSC approach to fin-tech regulation. Four key areas are discussed including crowdfunding, online adviser models, cryptocurrency funds and initial coin offerings or ICOs. The consultation requests feedback using a series of 42 highly detailed questions. The council is considering a comment, but we may require the input of industry experts and/or CFAI before we can respond.
Overview of the Council’s Comments:
The council recognizes that regulation needs to keep pace with technological innovation. New capital raising means such as Initial Coin Offerings and crowdfunding require the same amount of regulatory scrutiny as traditional methods. While the council supports an increase of crowdfunding caps, it suggests additional restrictions to address concerns relating to investors with low financial literacy and minimal investment experience. In terms of cryptocurrencies, the council suggests a prudent approach and highlights the various risks in terms of theft, KYC, AML and consumer protection. Finally, concerning KYC and suitability obligations in an online environment, the council recognizes that regulations should apply equally to all delivery channels but that accessibility to financial services should be balanced through proportionality and risk based approaches.