2016-02-12 14.45.59Financial technology professionals across the industry gathered recently to discuss the Top Regulations That FinTech Companies Need to Know at the latest LaunchTalks event organized in conjunction with the Innovative Markets FinTech Power Circle, a group of fintech experts across legal, compliance, finance, HR, marketing and partnerships.   Here’s a recap of the highlights.

reg eventThe dynamic panel started with comments from former CFTC commissioner  Bart Chilton, Senior Policy Advisor at DLA Piper, a global law firm.  Chilton set the stage by quoting Oscar Wilde, noting that today’s market and economy require us to “expect the unexpected.”  Chilton shed light on the interconnectedness of the global markets and the importance of dialogue with regulators to help increase awareness – check out this video of his comments captured by NexChange, a professional social network for the financial services industry.

Joanna Fields, Founding Principal of Aplomb Strategies, a market structure advisory firm, advised financial institutions to think about the costs and impact of not establishing operational processes that address the regulatory requirements, most important among these being AML (anti-2016-02-12 14.49.06money laundering), KYC (know your customer), privacy and outsourcing.  Organizations need to consider potential reputational risks, with many allocating funds to anticipate remediation efforts for their businesses.  Fields noted that due diligence questions around cybersecurity warrant special notice as these are becoming increasingly important in determining business relationships.

Lisa Seim, Principal of Strategic Exchanges Innovative Markets, a financial service provider consortium advised institutions to get off spreadsheets and consider cross-border issues that many are unaware of with respect to MIFID (Markets in Financial Instruments Directive), EMIR (European Market Infrastructure Regulation) and ESMA (European Securities and Markets Authority).

reg panelThe privacy implications for customer data are also an issue for vendors to be concerned about, noted Lee Schneider, Counsel at law firm Debevoise & Plimpton. Schneider mentioned new ways that firms can gain access to fundraising now without doing a public offering, by taking advantage of the JOBS Act, Regulation A+ and the FAST Act.

Lenore Kantor, Chief Launch Officer of Launch Warrior, a strategic marketing and launch advisory firm for fintech companies, encouraged well-prepared organizations to look at the regulations as an opportunity to communicate more effectively with their customers and the markets.  Players that are able to capitalize on their preparedness stand to enhance their brands and increase awareness when they share insights around regulatory implications.


2016-02-12 14.45.17While the broad fintech sector is covered by many regulations, there are 5 primary areas that any company selling into financial services clients or operating in the financial markets must know about.   Fintech companies should have in place processes and procedures around:

  • CLIENT ON-BOARDING: New client processes must encompass AML, KYC and CIP (Customer Identification Program).
  • CYBERSECURITY: Firms must have policies, procedures, training and reporting to handle security breaches, as well as monitoring vendor contracts and addressing DDQ (Due Diligence Questionnaire), BCP (Business Continuity Planning), DR (Disaster Recovery) and Reg SCI (Systems Compliance Integrity), particularly for SIPIs (Systemically Important Financial Institutions).
  • PRIVACY: Systems must be in place to protect client information and company data, including understanding the unique requirements for your jurisdiction.
  • BOOKS & RECORDS: Establish policies for monitoring financial reports and other records.
  • RAISING CAPITAL: Consider funding alternatives that take advantage of new crowdfunding rules which give issuers more flexibility and allow wider access to capital, for example new requirements under Regulation A+

Check out other video highlights from the event at NexChange, with highlights from the topics covered.  For more information about how to capitalize on your company’s regulatory preparedness or to get more information about how to position your business properly in this market, please contact us.  Our next LaunchTalks event will focus on cybersecurity, so please reach out to learn more about the program and discuss your participation.

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