Financial technology is changing how money changes hands, and fintech is evolving faster than the law. The rapid and recent advent of financial technology has left regulators playing catch up, with the current rules being ineffectively imported from regulatory models fit for traditional banking and financial services.
In October of last year, the Ontario Securities Commission launched a hub called LaunchPad, to assist fintech companies with navigating and tailoring the regulatory framework to the needs of the individual business. This hub has been created with the recognition that some existing regulatory requirements do not make sense for this new business model.
The British Columbia Securities Commission (BCSC) is now working to create its own framework in response to the innovation and adoption of new technologies in the financial services sector. Last week, the BCSC released an online survey, published a new tech industry webpage, and announced a dedicated Tech Team as part of its ongoing effort to assist the B.C. fintech industry.
Brenda Leong, BCSC Chair and CEO, commented, “We understand that early-stage companies need access to capital and a clear regulatory framework to operate in.” The BCSC’s aim is to work with industry insiders to create a flexible and balanced regulation that allows for innovative business models. The BCSC also works with other Canadian securities regulators to support fintech industry growth by facilitating timely and harmonized reviews of registration and exemptive relief applications.
Fintech is gaining momentum in B.C., with close to 100 companies in the province, nearly one-third of which are less than five years old. The BCSC is taking note, and there are 10 robo-advisory firms currently registered with the BCSC, seven firms exempt from registration as crowdfunding portals, and nine portals that are exempt market dealers.
Those interested in taking the BCSC survey will find it on the new tech industry page, which consolidates guidance and resources the BCSC has produced over the years, and provides contact information for BCSC's Tech Team. The webpage is a good starting point for those seeking to learn more about how securities regulation intersects with B.C.'s tech sector.