This first edition of The Financial Technology Law Review is published at a time when most players in the finance sector are concerned about the new developments that information technology (IT), big data and artificial intelligence (AI) will trigger in the finance sector. Hence, it is often forgotten that the use of IT in the finance sector is not new and that many applications that would come under fintech are already quite old, at least by today’s standards. Financial market participants – and their legal advisers – already have considerable experience in implementing such changes. As far as improved support products are concerned, the general rules of financial regulations can be applied quite easily to new developments.
However, there are indeed some recent developments that are entirely new, such as AI and the blockchain and its various applications, such as other tokens (e.g., cryptocurrencies and security tokens). These do have the potential to disrupt the industry, in at least some of its sectors.
The regulators worldwide were taken by surprise by the sheer dynamism of this development, both by the speed of the technical developments and the speed with which such new possibilities were implemented: long before there were any established rules for ICOs, startups could already raise up to several hundred million dollars by issuing tokens. This may have been a golden window of opportunity, but also, as one article published put it, ‘good times for money launderers’.
Therefore, it is little wonder that we are currently witnessing a strengthening of regulations in the field of fintech. However, the national solution chosen (and the speed with which regulators are willing to react by providing guidelines to market participants) varies considerably between jurisdictions. This may be a consequence of different regulatory cultures, but in addition, the existing legal systems may pose varying and unplanned obstacles to some of the new applications. It may, for example, be difficult to transfer rights on the blockchain if the national code prescribes that rights can only be assigned in writing. Therefore, a structured collection of overviews of certain aspects of fintech law and regulation – as this publication provides – is valuable not only for the international practitioner, but also for anyone who is looking for inspiration on how to address hitherto unaddressed and unthought-of issues under the national law of any country.
The authors of this publication are from the most widely respected law firms in their jurisdictions. They each have a proven record of experience in the field of fintech; they know both the law and how it is applied. We hope that you will also find their experience invaluable and enlightening when dealing with any of the varied issues fintech raises in the legal and regulatory fields.
The emphasis of this collection is on the law and practice of each of the jurisdictions, but discussion of emerging or unsettled issues has been provided where appropriate. The views expressed are those of the authors and not of their firms, the editor or the publisher. In a fast-changing environment, every effort has been made to provide the latest intelligence on the current status of the law.
Thomas A Frick
Niederer Kraft Frey