EU-wide fintech ‘passporting’ system in the making

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A new EU-wide system to help financial technology (fintech) firms expand cross-border across the trading bloc is to be considered by policy makers later this year.

The European Commission has confirmed that it will “assess the case for an EU licensing and passporting framework for fintech activities in the fourth quarter of 2017”.

The assessment will involve a review of feedback the Commission has received to a fintech consultation it held earlier this year.

The Commission said that feedback would provide “valuable input on: whether new, more proportionate licensing arrangements for fintech activities and firms in areas such as crowdfunding are needed”, as well as “how to support fintech firms, registered in one EU country, doing cross-border business without requiring further authorisation in each EU country”, which is known as ‘passporting’.

The Commission outlined the plans as part of its mid-term review of its capital markets union action plan.

In the UK, the Financial Conduct Authority (FCA) has already put in place a number of fintech cooperation agreements with sister regulators based around the world to make it easier for fintech businesses to operate overseas.

Earlier this year, the FCA put in place a new agreement with the Securities and Futures Commission (SFC) in Hong Kong. It established a similar deal with the Hong Kong Monetary Authority (HKMA) late last year. The FCA also has cooperation agreements in place with the Financial Services Agency of Japan (JFSA) and the Ontario Securities Commission (OSC) in Canada, as well as with regulators in Australia, Singapore, South Korea, and China.