Crowdfunding, peer-to-peer lending should abide by same legislative measures as banks
>> See: ESBG reflections on EU Commission FinTech Action Plan
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Published: 2 July 2018
ESBG’s advocates for a level playing field. That means crowdfunding and peer-to-peer lending platforms should abide by the same legislative measures as banks. Potential areas of harmonisation are crowdfunding platforms’ disclosure requirements, registration requirements, risk management and consumer/investor protection rules.
ICOs, crypto assets, cybersecurity, AI
Regarding the Commission’s work on Initial Coin Offerings and crypto assets, ESBG would like to see results that are twofold. First, that investors should benefit from an equally high level of protection and, second, a regulatory level playing field should be ensured.
On the topic of cybersecurity, ESBG believes that it should not be approached with proportionality in mind. This is because in case of cyber-attacks the interconnected system is only as strong as its weakest link. ESBG also notes the importance of digital skills in this respect and includes some of our views and experiences related to this. Lastly, ESBG calls for the establishment of a European Centre for Cyber Security in Banking and Finance, similar to the one established for Aviation (ECCSA).
ESBG also welcomes a coordinated EU approach toward Artificial Intelligence as included in the latest Commission Communication on AI. It is noted that no specific regulation applying to financial institutions with respect to AI or machine learning should exist, as it could be unfairly harmful for the financial services industry requiring to meet stricter requirements than other industries for the use of the same technology. ESBG also supports the establishment of Innovation Hubs/Sandboxes and would welcome one at EU level.
The European Parliament has asked the Commission to act by virtue of its own initiative reports, the most notable which is titled “Report on FinTech: the influence of technology on the future of the financial sector” prepared by the ECON Committee and adopted at the plenary sitting on 28 April 2017. The Council has done virtually the same by stating that there is a sense of urgency to address emerging trends, such as blockchain and ICOs, in its conclusions adopted on 19 October 2017.
Based on this, the Commission published its FinTech Action Plan on 8 March 2018. The Action Plan addresses several topics, among them planned steps to remove obstacles in implementing FinTech solutions. Other topics include a concrete proposal on crowdfunding and actions on blockchain, ICOs, the development of APIs compliant with both GDPR and PSD2 and finally cybersecurity.
ESBG finalised in the first half of 2018 its position on the Action Plan, which was sent out to the relevant stakeholders. With respect to the crowdfunding proposal, ESBG has recently submitted a response to the associated “Have Your Say”, managed by the Commission.
Another aspect of the Action Plan where ESBG has been active is the setting up of a Commission expert group to review the fitness of the EU financial services regulatory framework. Notably, ESBG has issued support letters to five candidates from ESBG’s membership on of which has been selected.
Furthermore, the EU Blockchain initiative stems from the Action Plan. ESBG hopes that it will contribute to know-how building on the regulators’ side but also to the financial industry.