Ensure level playing field by treating crowdfunding, peer-to-peer lending platforms like regulatory trading venues or payment institutions
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The following is a statement from ESBG responding to the EU Commission FinTech action plan released today.
BRUSSELS, 8 March 2018
The ESBG welcomes the EU Commission FinTech Action Plan released today.
ESBG Managing Director Chris De Noose says: “We are especially happy to see a neutral definition of FinTech, 'technology-enabled financial innovation', as many of our members are avid users of FinTech."
Regarding the new crowdfunding proposal, crowdfunding and peer-to-peer lending platforms should abide by the same legislative measures as banks. What is therefore needed is a comprehensive EU approach – treating platforms like regulatory trading venues or payment institutions. This approach secures a level playing field, enabling platforms to scale cross-border, and at the same time securing reliability and trust through a proportionate and effective risk management framework.
However, the Commission is in favour of developing a proper legal framework for crowdfunding across the EU to ensure appropriate investor and consumer protection. Potential areas of harmonisation are platforms' disclosure requirements, registration requirements and investor protection rules. ESBG is concerned that this option as the “opt-in" element will imply that there is no level playing field among platforms. National platforms could gain a regulatory advantage compared to cross-border platforms due to potential less-demanding local regulations. Furthermore, a lack of reliability in local platforms operating below 'best practice' standards could have a negative contagion upon the trust in cross-border platforms. Finally, existing regulations of credit institutions, credit intermediators and investment firms should be taken into account in order to reflect the nature of the platforms different services and nature.
With respect to the remaining topics of the plan, ESBG supports the Commission initiative to address identified regulatory gaps and will contribute to the best of its ability in this respect. To that end, ESBG would be interested in nominating representatives to the expert group to review the fitness of the EU financial services regulatory framework as planned by the Commission.
Savings and retail banks throughout the European Union have taken great strides to acclimate themselves to the digital transformation. The most recent development in this ongoing process is distributed ledger technology. This topic greatly interests us. We will endeavour to provide input in the planned consultation and will follow Commission's activities with great interest.
Lastly, ESBG is looking forward to the public-private cybersecurity workshop planned for the second quarter of 2018. We see that these types of activities are important in the realm of cybersecurity because service providers must constantly adjust and refresh measures designed to protect data to mirror the constantly evolving technology and thus new threat profiles. Any potentially new legislation should be assessed against the risk of altering the level playing field, meaning that only some players should not be required to invest disproportionately in order to counter the new risks imposed on their supply chain.
James Pieper on +32 2 211 11 92 or at email@example.com; or
Dirk Smet on +32 2 211 11 90 or at firstname.lastname@example.org
ESBG represents the locally focused European banking sector, helping savings and retail banks in 20 European countries strengthen their unique approach that focuses on providing service to local communities and boosting SMEs. An advocate for a proportionate approach to banking rules, ESBG unites at EU level some 1,000 banks, which together employ 780,000 people driven to innovate at 56,000 outlets. ESBG members have total assets of €6.2 trillion, provide €500 billion in SME loans, and serve 150 million Europeans seeking retail banking services. ESBG members are committed to further unleash the promise of sustainable, responsible 21st century banking.
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