Global Financial Innovation Network (GFIN)

The Global Financial Innovation Network (GFIN) was formally launched in January 2019 by an international group of financial regulators and related organisations, including the FCA. This built on the FCA’s early 2018 proposal to create a global sandbox.

The GFIN is a network of 50 organisations committed to supporting financial innovation in the interests of consumers.

The GFIN seeks to provide a more efficient way for innovative firms to interact with regulators, helping them navigate between countries as they look to scale new ideas. This includes a pilot for firms wishing to test innovative products, services or business models across more than one jurisdiction.

It also aims to create a new framework for co-operation between financial services regulators on innovation related topics, sharing different experiences and approaches.

GFIN – development and progress

In June 2019, the GFIN published a report setting out the progress made in its first year, the challenges it has faced, and its ambitions and plans for the future. It also describes the work done to engage with stakeholders.

The GFIN was originally proposed in a consultation paper in August 2018. The GFIN received 99 responses from 26 jurisdictions in response to the consultation paper. The response from industry and other international regulators was overwhelmingly positive in favour of establishing the GFIN to facilitate a new practical method of regulatory collaboration on innovation and creating an environment for cross-border testing.

Following this consultation, the GFIN finalised terms of reference for governance and membership of the group and confirmed 3 primary functions:

  • To act as a network of regulators to collaborate and share experience of innovation in respective markets, including emerging technologies and business models, and to provide accessible regulatory contact information for firms.
  • To provide a forum for joint RegTech work and collaborative knowledge sharing/lessons learned.
  • To provide firms with an environment in which to trial cross-border solutions.

After the end of the consultation, the GFIN discussed further development of our core functions and next steps of the network. Alongside discussions on the sharing of experience, regulators involved agreed to launch a pilot phase of cross-border testing (for firms) and to formalise the membership and governance structure for regulators and international organisations interested in joining the Network.

Following the consultation feedback, the GFIN:

  • Opened a 1-month application period for a pilot phase of cross-border testing. Interested firms were invited to submit applications to relevant participating regulators by 28 February 2019. We announced next steps on the pilot on 29 April 2019
  • As part of the finalised terms of reference for governance and membership, expanding from the founding 12 members, the group now includes 50 organisations. Financial regulators and related organisations with a commitment to supporting innovation in the interest of consumers are invited to join.

Cross-border testing applications – pilot phase for firms

Consultation feedback indicated widespread support for creating an environment that allowed firms to simultaneously trial and scale new technologies in multiple jurisdictions, gaining real-time insight into how a product or service might operate in the market.

To support the development of cross border testing we have opened a 1-month application window for firms interested in joining a pilot cohort for cross-border testing. We announced next steps in the pilot process on 29 April 2019.

Assessment criteria

Firms wishing to participate in this pilot phase were required to meet the application requirements of all the jurisdictions in which they would like to test. For example, a firm wishing to test in the UK, Australia and Hong Kong needed to independently meet the eligibility criteria, and/or other relevant standards, of the regulators in those jurisdictions.

In assessing applications, each regulator considered whether a proposed test met its individual screening criteria, areas of interest, and ability to support the activity. In developing testing plans with firms, each regulator will also make sure that appropriate safeguards for their jurisdiction are in place. Regulators are only responsible for tests in their jurisdictions and should consider the associated risks. We believe this is important to maintain high standards of consumer protection and market integrity in regulators’ respective jurisdictions.

Pilot tests will run for a 6-month period, unless regulators agree to extend them. We expect the pilots will run from Q2 2019.

This pilot is as much a trial for GFIN members as it will be for firms. We were looking for firms who can be flexible and agile in their participation, and can provide GFIN regulators with feedback on their experience. Firms will benefit from the opportunity to test and compete in the regulated space, and their tests will help inform the future work of the network. Over time, trials could inform regulatory authorities about potential areas of regulatory convergence (eg streamlined applications), although we stress this is a longer-term opportunity.

GFIN members currently participating in cross-border trials

The following regulators are currently involved in the cross-border testing workstream.

Australian Securities & Investments Commission (ASIC)

Central Bank of Bahrain (CBB)

Bermuda Monetary Authority (BMA)

British Columbia Securities Commission (BCSC) (British Columbia, Canada)

Ontario Securities Commission (OSC) (Ontario, Canada)

Autorité des marchés financiers (AMF) (Québec, Canada)

Hong Kong Monetary Authority (HKMA)

Hong Kong Securities and Futures Commission (HKSFC)

Magyar Nemzeti Bank (Central Bank of Hungary)

Astana Financial Services Authority (AFSA) (Astana, Kazakhstan)

Bank of Lithuania (LB)

Monetary Authority of Singapore (MAS)

Abu Dhabi Global Market (ADGM)

Dubai Financial Services Authority (DFSA)

Financial Conduct Authority (FCA, UK) [GFIN Chair]

Guernsey Financial Services Commission (GFSC)

Jersey Financial Services Commission (JFSC)

Joining the GFIN – for regulators

We see the GFIN as an open initiative and continue to welcome interest from regulators and international organisations in joining the network in its early stages.

Finalising our terms of reference for on-boarding new members allows us to formally expand the group in a transparent way. We invite interested regulators and international organisations to review our tiers of membership and consider the potential benefits and commitment levels that come with joining the network.

Prospective members and observers are invited to submit an application, which will be shared with the Coordination Group for quarterly review.

While launching cross-border testing has been an early priority for the group, regulatory members are able to just focus on the network collaboration efforts and joint RegTech work, rather than supporting trials.

For more information, organisations can contact any GFIN member or email the FCA at [email protected].

Full list of GFIN Membership

Coordination Group

Organisation

Jurisdiction

Australian Securities & Investments Commission (ASIC) Australia
Central Bank of Bahrain (CBB) Bahrain
Autorité des marchés financiers (AMF) Québec, Canada
Guernsey Financial Services Commission (GFSC) Guernsey
Hong Kong Monetary Authority (HKMA) Hong Kong
Hong Kong Securities and Futures Commission (HKSFC) Hong Kong
Astana Financial Services Authority (AFSA) Kazakhstan
Monetary Authority of Singapore (MAS) Singapore
Dubai Financial Services Authority (DFSA) United Arab Emirates
Financial Conduct Authority (FCA) United Kingdom
Consumer Financial Protection Bureau (CFPB) United States

Members

Organisation

Jurisdiction

Bermuda Monetary Authority (BMA) Bermuda
Securities and Exchange Commission of Brazil (CVM) Brazil
Alberta Securities Commission (ASC) Alberta, Canada
British Columbia Securities Commission (BCSC) British Columbia, Canada
Ontario Securities Commission (OSC) Ontario, Canada
Financial Services Regulatory Authority of Ontario (FSRA Ontario) Ontario, Canada
Centrale Bank van Curaçao and Sint Maarten Curaçao and Sint Maarten
Central Bank of Eswatini Eswatini (Swaziland)
Gibraltar Financial Services Commission Gibraltar
Hong Kong Insurance Authority (IA) Hong Kong
Magyar Nemzeti Bank (Central Bank of Hungary) Hungary
Isle of Man Financial Services Authority (IOMFSA) Isle of Man
Israel Securities Authority (ISA) Israel
Capital Market, Insurance, and Savings Authority (CMISA) Israel
Jersey Financial Services Commission (JFSC) Jersey
Capital Markets Authority (CMA, Kenya) Kenya
Bank of Lithuania (BL) Lithuania
Commission de Surveillance du Secteur Financier (CSSF) Luxembourg
Financial Services Commission Mauritius (FSC) Mauritius
Comision Nacional Bancaria y de Valores (National Banking and Securities Commission) (CNBV) Mexico
Seychelles Financial Services Authority Seychelles
South African Reserve Bank (SARB) South Africa
Financial Supervisory Commission Taiwan Taiwan
Abu Dhabi Global Market (ADGM) United Arab Emirates
Central Bank of the UAE United Arab Emirates
Securities and Commodities Authority, UAE (ESCA) United Arab Emirates
Commodity Futures Trading Commission (CFTC) United States
Federal Deposit Insurance Corporation (FDIC) United States
Office of the Comptroller of the Currency (OCC) United States
Securities and Exchange Commission (SEC) United States
New York State Department of Financial Services (NY DFS) State of New York, United States
Office of the Arizona Attorney General State of Arizona, United States

Observers

Organisation

Jurisdiction

Financial Sector Deepening Africa (FSD Africa) Africa
Qianhai Financial Authority China
European Bank for Reconstruction and Development (EBRD) Europe
Consultative Group to Assist the Poor (CGAP) Global
International Monetary Fund (IMF) Global
World Bank Group Global
Qatar Development Bank Qatar

Page updates

24/10/2019: Information added GFIN moved to quarterly new member application review. Update to reflect 12 new members
09/08/2019: Document update Changes to Terms of Reference amend process for new members ie new application form