On March 6, 2017, the Ontario Securities Commission issued a white paper titled “Insights from Canada’s first regulatory hackathon”. The paper provides an overview of the RegHackTO hackathon hosted by the OSC on November 25-27, 2016. At the event, more than 120 members of the fintech community competed to find solutions to regulatory problems in four areas: RegTech, Know-Your-Client (KYC)/identity authentication, financial literacy and transparency in the capital markets.
The solutions presented by the various teams included technologies that would standardize data in the capital markets, applications to allow for easier investment product comparability, and surveillance applications to conduct analytics and identify industry trends.
The winning teams were as follows:
First place: Existence Labs for “KeyStamp” which uses blockchain technology to verify compliance with securities requirements such as KYC and suitability in real time.
Second place: RicLoo for “TLSRegistry”, another blockchain-based solution, which verifies identities using existing secure websites and permits certain actions such as granting permissions and providing proof of employment.
Third place: Extreme Securities 2k16 for “Rubix Solution” which is a portal that validates initial coin offerings and provides standardized data for comparing investment products in key areas such as returns and fees and allows real time oversight by regulators.
The OSC identified three themes that emerged from the event: (i) technology (and in particular distributed ledger technology) is rapidly changing how financial services are delivered; (ii) open access to data is essential for advancing fintech solutions; and (iii) regulators must be open to new ways of doing business.
In addition, the OSC set out a list of next steps including considering ways to leverage technologies such as DLT and artificial intelligence in its regulatory work, supporting the facilitation of access to data, subject to privacy and security concerns, and reviewing potential solutions to centralized KYC information collection and verification processes.