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--Ministers To Give Input On Required "Regulatory And Institutional Approach"
--Discussion Only Informal, Topic To Gain Importance In Coming Months
By Jean Comte
BRUSSELS (MNI) - European Union finance ministers gather in Tallinn next
week and will for the first time, debate regulation of the FinTech sector,
Market News understands.
According to the discussion paper drafted by Estonia and obtained by MNI,
ministers are expected to give concrete proposals regarding the actions needed
to improve the EU's competitiveness in FinTech and the best "regulatory and
institutional approach" to follow.
Set for Sep 15-16, the discussion will be chaired by Estonia, a self-styled
e-friendly country, which, as holders of the Council Presidency, will oversee
Ecofin meetings until end December
"Digital ways of delivering financial services potentially offer a faster,
more convenient and more useful experience to customers by combining platforms,
channels and technology," reads the paper.
"At the same time it is important to put the consumers in the center of the
debate and to keep in mind potential risks. Technology enabled finance raises
concerns on data use and integrity, the potential use of the financial system
for illicit purposes and cyber-threats," it adds.
Financial technology firms do not currently benefit from any tailored
framework in EU financial regulation. But policy makers are increasingly
concerned that it might be necessary.
In May, the EU Parliament said that "financial services legislation at both
EU and national levels should be revised when necessary", stressing the need to
adopt a "risk-based approach" in doing so.
In June, the EU Commission, which is responsible for drafting new
legislative proposals, said that it will "assess the case for an EU licensing
and passporting framework for FinTech activities" before the end of the year.
The ministers' discussions will also rely on a policy paper drafted by
scholars from Bruegel, a Brussels-based think tank specialising in economic
affairs. This document, also seen by MNI, states that a European framework for
FinTech should be developed, including through revisiting some of the current EU
laws. The document also pushes for a single European FinTech supervisor, which
could, for example, be the current European Securities and Markets Authority.
"To date, Fintech has contributed little to European financial market
integration but it could become more important," concludes the paper.
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