The Financial Conduct Authority (FCA), in collaboration with 11 financial regulators and related organisations, on 7 August 2018 proposed the creation of the Global Financial Innovation Network (GFIN) in a consultation paper. This built on the FCA’s proposal in early 2018 to create a ‘global sandbox’.
As part of the consultation, the group sought views on the mission statement for the GFIN, its proposed functions, and where it should prioritise activity. The group was also keen to hear from other interested regulators or related organisations interested in getting involved.
The consultation set out the 3 main functions of the GFIN:
- act as a network of regulators to collaborate and share experience of innovation in respective markets, including emerging technologies and business models;
- provide a forum for joint policy work and discussions; and
- provide firms with an environment in which to trial cross-border solutions.
This consultation has now closed. See a summary of feedback and next steps.
FCA’s Global Sandbox Consultation
The creation of the GFIN follows the FCA’s consultation in February 2018 on the idea of a ‘global sandbox’. The FCA received 50 responses to this consultation. Overall, feedback to the consultation was positive. Key themes to emerge in the feedback were:
- Regulatory co-operation: Respondents were supportive of the idea of the initiative providing a setting for regulators to collaborate on common challenges or policy questions firms face in different jurisdictions.
- Speed to market: Respondents cited one of the main advantages for the global sandbox could be reducing the time it takes to bring ideas to new international markets.
- Governance: Feedback highlighted the importance of the project being transparent and fair to those potential firms wishing to apply for cross-border testing.
- Emerging technologies/business models: A wide range of topics and subject matters were highlighted in the feedback, particularly those with notable cross-border application. Among issues highlighted were artificial intelligence, distributed ledger technology, data protection, regulation of securities and Initial Coin Offerings (ICOs), know your customer (KYC) and anti-money laundering (AML).