UK Law and Practice Contributed by: James Burnie, Kathryn Dodds, Olga Antonova and Holly Joseph, gunnercooke llp
ests of the consumer, which is a shift from previ - ous thinking, which was more along the lines of disclosure obligations. Firms which provide services in relation to secu - rities are generally subject to the most onerous obligations, for example financial advisers are not permitted to receive payments which may impact their advice. A recent focus has also been on inducements to invest, and it is notable that the FCA has recently prohibited these when selling in-scope crypto-assets (ie, fungible and transferable unregulated crypto-assets) to the general UK retail public. 2.4 Variations Between the Regulation of Fintech and Legacy Players Generally, there is no distinction drawn between these fintech industry participants and legacy players, with a view to keeping a level playing field. However, there is a recognition that new tech - nologies may achieve the same (or better) out - comes for consumers through approaches not originally anticipated by the existing rules. Where this is the case, the general approach has been “same risk same regulatory outcome” . In addi - tion, the UK has pioneered the use of sandbox - es, which enable interaction between the regula - tor and fintechs to assess how best to oversee new technologies. 2.5 Regulatory Sandbox The UK has a range of sandboxes, run by differ - ent regulators. These include the original sand - box, operated by the FCA, which allows firms with a genuine innovation with a UK nexus to conduct a test under its oversight. The PRA and Bank of England also run sand - boxes, and again these are generally chances for
firms to be able to interact with these regulators to test new concepts which may be of relevance to them. The use of a sandbox should be seen as a chance to explore a concept with a regulator – it is a not a means to avoid regulation. Once a sandbox is successful, firms are still expected to obtain all of the relevant authorisation and reg - istrations which may be considered pertinent to the running of their business. 2.6 Jurisdiction of Regulators For financial services firms, the primary regula - tor is the FCA, which is responsible for both the conduct of business and prudential running of these businesses. However, certain business (in particular banks, building societies, credit unions, insurers and major investment firms) are also regulated by the PRA, alongside the FCA. The general theme of these businesses is that they may pose a sys - temic risk to the UK financial services sector, so the PRA has a particular focus on matters such as the solvency of such institutions and mitigat - ing the impact of any wind-down. Another regulator that UK businesses generally have to deal with is the Information Commis - sioner’s Office, which is responsible for ensur - ing that businesses comply with their obligations with respect to protecting personal data. Firms may also have to comply with the require - ments of the Advertising Standards Authority (ASA) if marketing in the United Kingdom, how - ever if they are regulated by the FCA/PRA, that tends to be more onerous than, and supersede, the requirements of the ASA.
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