i Table of contents 995

Fintech 2025

Definitive global law guides offering comparative analysis from top-ranked lawyers

INTRODUCTION		7
Contributed by Adrian Ang, Allen & Gledhill LLP		7
ARGENTINA		12
Law and Practice		12
Contributed by GPG Advisory Partners		12
Trends and Developments		31
Contributed by Bomchil		31
AUSTRALIA		41
Trends and Developments		41
Contributed by Hamilton Locke		41
BELGIUM		50
Law and Practice		50
Contributed by Simont Braun		50
Trends and Developments		74
Contributed by Liedekerke Wolters Waelbroeck Kirkpatrick		74
BERMUDA		80
Law and Practice		80
Contributed by Carey Olsen		80
BRAZIL		107
Law and Practice		107
Contributed by Machado, Meyer, Sendacz e Opice Advogados		107
BRITISH VIRGIN ISLANDS		125
Law and Practice		125
Contributed by Carey Olsen		125
CAYMAN ISLANDS		144
Law and Practice		144
Contributed by Travers Thorp Alberga		144
Trends and Developments		167
Contributed by Travers Thorp Alberga		167
CZECH REPUBLIC		174
Law and Practice		174
Contributed by FINREG PARTNERS		174
EGYPT		200
Law and Practice		200
Contributed by Shehata & Partners Law Firm		200
FINLAND		221
Law and Practice		221
Contributed by Waselius		221
FRANCE		245
Law and Practice		245
Contributed by Morgan Lewis & Bockius LLP		245
GUERNSEY		280
Law and Practice		280
Contributed by Carey Olsen		280
INDIA		296
Law and Practice		296
Contributed by Shardul Amarchand Mangaldas & Co		296
Trends and Developments		321
Contributed by Shardul Amarchand Mangaldas & Co		321
INDONESIA		329
Law and Practice		329
Contributed by ABNR Counsellors at Law		329
Trends and Developments		355
Contributed by Hiswara Bunjamin & Tandjung		355
IRELAND		365
Law and Practice		365
Contributed by Walkers		365
Trends and Developments		389
Contributed by KPMG Law		389
JAPAN		399
Law and Practice		399
Contributed by Anderson Mori & Tomotsune		399
Trends and Developments		423
Contributed by Nagashima Ohno & Tsunematsu		423
JERSEY		431
Law and Practice		431
Contributed by Carey Olsen		431
KENYA		449
Law and Practice		449
Contributed by Cliffe Dekker Hofmeyr incorporating Kieti Law LLP		449
LITHUANIA		476
Law and Practice		476
Contributed by ADON legal		476
LUXEMBOURG		501
Law and Practice		501
Contributed by GSK Stockmann		501
Trends and Developments		523
Contributed by Legal Node		523
MALTA		529
Law and Practice		529
Contributed by GTG Legal		529
MEXICO		551
Trends and Developments		551
Contributed by Pérez-Llorca		551
NIGERIA		558
Law and Practice		558
Contributed by Banwo & Ighodalo		558
Trends and Developments		584
Contributed by Duale, Ovia & Alex-Adedipe		584
PANAMA		592
Law and Practice		592
Contributed by Morgan & Morgan		592
Trends and Developments		611
Contributed by Morgan & Morgan		611
PERU		619
Law and Practice		619
Contributed by Rubio Leguía Normand		619
Trends and Developments		641
Contributed by Rubio Leguía Normand		641
POLAND		646
Law and Practice		646
Contributed by Lawarton Lugowski Kapica Spolka Komandytowa		646
Trends and Developments		669
Contributed by Deloitte Legal, Gizicki i Wspólnicy sp.k.		669
PORTUGAL		678
Law and Practice		678
Contributed by GFDL Advogados		678
Trends and Developments		704
Contributed by Abreu Advogados		704
ROMANIA		712
Law and Practice		712
Contributed by VD Law Group		712
Trends and Developments		741
Contributed by VD Law Group		741
SINGAPORE		749
Law and Practice		749
Contributed by KGP Legal LLC		749
Trends and Developments		774
Contributed by Allen & Gledhill LLP		774
SWEDEN		782
Law and Practice		782
Contributed by Magnusson Law		782
SWITZERLAND		804
Law and Practice		804
Contributed by Lenz & Staehelin		804
Trends and Developments		830
Contributed by MLL Legal		830
TAIWAN		839
Law and Practice		839
Contributed by Lee & Li		839
Trends and Developments		861
Contributed by Lee & Li		861
THAILAND		868
Law and Practice		868
Contributed by Chandler Mori Hamada		868
Trends and Developments		894
Contributed by Chandler Mori Hamada		894
UAE		903
Law and Practice		903
Contributed by White & Case LLP		903
Trends and Developments		930
Contributed by White & Case LLP		930
UK		938
Law and Practice		938
Contributed by gunnercooke llp		938
Trends and Developments		956
Contributed by gunnercooke llp		956
USA		962
Law and Practice		962
Contributed by DLA Piper LLP		962
Trends and Developments		986
Contributed by Schulte Roth & Zabel LLP		986
1. Fintech Market		15
1.1 Evolution of the Fintech Market		15
2. Fintech Business Models and Regulation in General		16
2.1 Predominant Business Models		16
2.2 Regulatory Regime		16
2.3 Compensation Models		17
2.4 Variations Between the Regulation of Fintech and Legacy Players		18
2.5 Regulatory Sandbox		18
2.6 Jurisdiction of Regulators		18
2.7 No-Action Letters		19
2.8 Outsourcing of Regulated Functions		19
2.9 Gatekeeper Liability		19
2.10 Significant Enforcement Actions		19
2.11 Implications of Additional, Non-Financial Services Regulations		20
2.12 Review of Industry Participants by Parties Other than Regulators		20
2.13 Conjunction of Unregulated and Regulated Products and Services		20
2.14 Impact of AML and Sanctions Rules		21
2.15 Financial Action Task Force Standards		21
2.16 Reverse Solicitation		21
3. Robo-Advisers		21
3.1 Requirement for Different Business Models		21
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		22
3.3 Issues Relating to Best Execution of Customer Trades		22
4. Online Lenders		22
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		22
4.2 Underwriting Processes		22
4.3 Sources of Funds for Fiat Currency Loans		23
4.4 Syndication of Fiat Currency Loans		23
5. Payment Processors		23
5.1 Payment Processors’ Use of Payment Rails		23
5.2 Regulation of Cross-Border Payments and Remittances		24
6. Marketplaces, Exchanges and Trading Platforms		24
6.1 Permissible Trading Platforms		24
6.2 Regulation of Different Asset Classes		24
6.3 Impact of the Emergence of Cryptocurrency Exchanges		24
6.4 Listing Standards		25
6.5 Order Handling Rules		25
6.6 Rise of Peer-to-Peer Trading Platforms		25
6.7 Rules of Payment for Order Flow		25
6.8 Market Integrity Principles		25
7. High-Frequency and Algorithmic Trading		26
7.1 Creation and Usage Regulations		26
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		26
7.3 Regulatory Distinction Between Funds and Dealers		26
7.4 Regulation of Programmers and Programming		26
8. Insurtech		26
8.1 Underwriting Processes		26
8.2 Treatment of Different Types of Insurance		26
9. Regtech		27
9.1 Regulation of Regtech Providers		27
9.2 Contractual Terms to Assure Performance and Accuracy		27
10. Blockchain		27
10.1 Use of Blockchain in the Financial Services Industry		27
10.2 Local Regulators’ Approach to Blockchain		27
10.3 Classification of Blockchain Assets		28
10.4 Regulation of “Issuers” of Blockchain Assets		28
10.5 Regulation of Blockchain Asset Trading Platforms		28
10.6 Staking		28
10.7 Crypto-Related Lending		28
10.8 Cryptocurrency Derivatives		28
10.9 Decentralised Finance (DeFi)		28
10.10 Regulation of Funds		28
10.11 Virtual Currencies		28
10.12 Non-Fungible Tokens (NFTs)		29
11. Open Banking		29
11.1 Regulation of Open Banking		29
11.2 Concerns Raised by Open Banking		29
12. Fraud		29
12.1 Elements of Fraud		29
12.2 Areas of Regulatory Focus		30
12.3 Responsibility for Losses		30
1. Fintech Market		54
1.1 Evolution of the Fintech Market		54
2. Fintech Business Models and Regulation in General		54
2.1 Predominant Business Models		54
2.2 Regulatory Regime		55
2.3 Compensation Models		55
2.4 Variations Between the Regulation of Fintech and Legacy Players		55
2.5 Regulatory Sandbox		55
2.6 Jurisdiction of Regulators		56
2.7 No-Action Letters		56
2.8 Outsourcing of Regulated Functions		56
2.9 Gatekeeper Liability		57
2.10 Significant Enforcement Actions		57
2.11 Implications of Additional, Non-Financial Services Regulations		57
2.12 Review of Industry Participants by Parties Other than Regulators		58
2.13 Conjunction of Unregulated and Regulated Products and Services		58
2.14 Impact of AML and Sanctions Rules		59
2.15 Financial Action Task Force Standards		59
2.16 Reverse Solicitation		59
3. Robo-Advisers		59
3.1 Requirement for Different Business Models		59
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		60
3.3 Issues Relating to Best Execution of Customer Trades		60
4. Online Lenders		60
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		60
4.2 Underwriting Processes		62
4.3 Sources of Funds for Fiat Currency Loans		63
4.4 Syndication of Fiat Currency Loans		63
5. Payment Processors		63
5.1 Payment Processors’ Use of Payment Rails		63
5.2 Regulation of Cross-Border Payments and Remittances		63
6. Marketplaces, Exchanges and Trading Platforms		64
6.1 Permissible Trading Platforms		64
6.2 Regulation of Different Asset Classes		64
6.3 Impact of the Emergence of Cryptocurrency Exchanges		65
6.4 Listing Standards		65
6.5 Order Handling Rules		65
6.6 Rise of Peer-to-Peer Trading Platforms		65
6.7 Rules of Payment for Order Flow		66
6.8 Market Integrity Principles		66
7. High-Frequency and Algorithmic Trading		66
7.1 Creation and Usage Regulations		66
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		67
7.3 Regulatory Distinction Between Funds and Dealers		67
7.4 Regulation of Programmers and Programming		67
8. Insurtech		67
8.1 Underwriting Processes		67
8.2 Treatment of Different Types of Insurance		68
9. Regtech		68
9.1 Regulation of Regtech Providers		68
9.2 Contractual Terms to Assure Performance and Accuracy		68
10. Blockchain		69
10.1 Use of Blockchain in the Financial Services Industry		69
10.2 Local Regulators’ Approach to Blockchain		69
10.3 Classification of Blockchain Assets		69
10.4 Regulation of “Issuers” of Blockchain Assets		70
10.5 Regulation of Blockchain Asset Trading Platforms		70
10.6 Staking		71
10.7 Crypto-Related Lending		71
10.8 Cryptocurrency Derivatives		71
10.9 Decentralised Finance (DeFi)		71
10.10 Regulation of Funds		71
10.11 Virtual Currencies		72
10.12 Non-Fungible Tokens (NFTs)		72
11. Open Banking		72
11.1 Regulation of Open Banking		72
11.2 Concerns Raised by Open Banking		73
12. Fraud		73
12.1 Elements of Fraud		73
12.2 Areas of Regulatory Focus		73
12.3 Responsibility for Losses		73
1. Fintech Market		84
1.1 Evolution of the Fintech Market		84
2. Fintech Business Models and Regulation in General		85
2.1 Predominant Business Models		85
2.2 Regulatory Regime		86
2.3 Compensation Models		89
2.4 Variations Between the Regulation of Fintech and Legacy Players		89
2.5 Regulatory Sandbox		89
2.6 Jurisdiction of Regulators		90
2.7 No-Action Letters		90
2.8 Outsourcing of Regulated Functions		90
2.9 Gatekeeper Liability		91
2.10 Significant Enforcement Actions		91
2.11 Implications of Additional, Non-Financial Services Regulations		92
2.12 Review of Industry Participants by Parties Other than Regulators		95
2.13 Conjunction of Unregulated and Regulated Products and Services		95
2.14 Impact of AML and Sanctions Rules		95
2.15 Financial Action Task Force Standards		95
2.16 Reverse Solicitation		96
3. Robo-Advisers		96
3.1 Requirement for Different Business Models		96
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		96
3.3 Issues Relating to Best Execution of Customer Trades		96
4. Online Lenders		97
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		97
4.2 Underwriting Processes		97
4.3 Sources of Funds for Fiat Currency Loans		98
4.4 Syndication of Fiat Currency Loans		98
5. Payment Processors		98
5.1 Payment Processors’ Use of Payment Rails		98
5.2 Regulation of Cross-Border Payments and Remittances		98
6. Marketplaces, Exchanges and Trading Platforms		99
6.1 Permissible Trading Platforms		99
6.2 Regulation of Different Asset Classes		99
6.3 Impact of the Emergence of Cryptocurrency Exchanges		99
6.4 Listing Standards		99
6.5 Order Handling Rules		100
6.6 Rise of Peer-to-Peer Trading Platforms		100
6.7 Rules of Payment for Order Flow		100
6.8 Market Integrity Principles		100
7. High-Frequency and Algorithmic Trading		100
7.1 Creation and Usage Regulations		100
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		100
7.3 Regulatory Distinction Between Funds and Dealers		101
7.4 Regulation of Programmers and Programming		101
8. Insurtech		101
8.1 Underwriting Processes		101
8.2 Treatment of Different Types of Insurance		101
9. Regtech		101
9.1 Regulation of Regtech Providers		101
9.2 Contractual Terms to Assure Performance and Accuracy		102
10. Blockchain		102
10.1 Use of Blockchain in the Financial Services Industry		102
10.2 Local Regulators’ Approach to Blockchain		102
10.3 Classification of Blockchain Assets		102
10.4 Regulation of “Issuers” of Blockchain Assets		103
10.5 Regulation of Blockchain Asset Trading Platforms		103
10.6 Staking		103
10.7 Crypto-Related Lending		103
10.8 Cryptocurrency Derivatives		104
10.9 Decentralised Finance (DeFi)		104
10.10 Regulation of Funds		105
10.11 Virtual Currencies		105
10.12 Non-Fungible Tokens (NFTs)		105
11. Open Banking		105
11.1 Regulation of Open Banking		105
11.2 Concerns Raised by Open Banking		105
12. Fraud		105
12.1 Elements of Fraud		105
12.2 Areas of Regulatory Focus		106
12.3 Responsibility for Losses		106
1. Fintech Market		110
1.1 Evolution of the Fintech Market		110
2. Fintech Business Models and Regulation in General		111
2.1 Predominant Business Models		111
2.2 Regulatory Regime		112
2.3 Compensation Models		113
2.4 Variations Between the Regulation of Fintech and Legacy Players		113
2.5 Regulatory Sandbox		113
2.6 Jurisdiction of Regulators		113
2.7 No-Action Letters		114
2.8 Outsourcing of Regulated Functions		114
2.9 Gatekeeper Liability		114
2.10 Significant Enforcement Actions		115
2.11 Implications of Additional, Non-Financial Services Regulations		115
2.12 Review of Industry Participants by Parties Other than Regulators		115
2.13 Conjunction of Unregulated and Regulated Products and Services		116
2.14 Impact of AML and Sanctions Rules		116
2.15 Financial Action Task Force Standards		116
2.16 Reverse Solicitation		116
3. Robo-Advisers		117
3.1 Requirement for Different Business Models		117
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		117
3.3 Issues Relating to Best Execution of Customer Trades		117
4. Online Lenders		117
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		117
4.2 Underwriting Processes		118
4.3 Sources of Funds for Fiat Currency Loans		118
4.4 Syndication of Fiat Currency Loans		118
5. Payment Processors		118
5.1 Payment Processors’ Use of Payment Rails		118
5.2 Regulation of Cross-Border Payments and Remittances		118
6. Marketplaces, Exchanges and Trading Platforms		119
6.1 Permissible Trading Platforms		119
6.2 Regulation of Different Asset Classes		119
6.3 Impact of the Emergence of Cryptocurrency Exchanges		119
6.4 Listing Standards		119
6.5 Order Handling Rules		120
6.6 Rise of Peer-to-Peer Trading Platforms		120
6.7 Rules of Payment for Order Flow		120
6.8 Market Integrity Principles		120
7. High-Frequency and Algorithmic Trading		120
7.1 Creation and Usage Regulations		120
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		120
7.3 Regulatory Distinction Between Funds and Dealers		120
7.4 Regulation of Programmers and Programming		120
8. Insurtech		120
8.1 Underwriting Processes		120
8.2 Treatment of Different Types of Insurance		121
9. Regtech		121
9.1 Regulation of Regtech Providers		121
9.2 Contractual Terms to Assure Performance and Accuracy		121
10. Blockchain		121
10.1 Use of Blockchain in the Financial Services Industry		121
10.2 Local Regulators’ Approach to Blockchain		121
10.3 Classification of Blockchain Assets		121
10.4 Regulation of “Issuers” of Blockchain Assets		121
10.5 Regulation of Blockchain Asset Trading Platforms		121
10.6 Staking		122
10.7 Crypto-Related Lending		122
10.8 Cryptocurrency Derivatives		122
10.9 Decentralised Finance (DeFi)		122
10.10 Regulation of Funds		122
10.11 Virtual Currencies		123
10.12 Non-Fungible Tokens (NFTs)		123
11. Open Banking		123
11.1 Regulation of Open Banking		123
11.2 Concerns Raised by Open Banking		123
12. Fraud		123
12.1 Elements of Fraud		123
12.2 Areas of Regulatory Focus		123
12.3 Responsibility for Losses		123
1. Fintech Market		128
1.1 Evolution of the Fintech Market		128
2. Fintech Business Models and Regulation in General		128
2.1 Predominant Business Models		128
2.2 Regulatory Regime		129
2.3 Compensation Models		130
2.4 Variations Between the Regulation of Fintech and Legacy Players		131
2.5 Regulatory Sandbox		131
2.6 Jurisdiction of Regulators		131
2.7 No-Action Letters		132
2.8 Outsourcing of Regulated Functions		132
2.9 Gatekeeper Liability		132
2.10 Significant Enforcement Actions		133
2.11 Implications of Additional, Non-Financial Services Regulations		133
2.12 Review of Industry Participants by Parties Other than Regulators		135
2.13 Conjunction of Unregulated and Regulated Products and Services		135
2.14 Impact of AML and Sanctions Rules		135
2.15 Financial Action Task Force Standards		136
2.16 Reverse Solicitation		136
3. Robo-Advisers		136
3.1 Requirement for Different Business Models		136
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		137
3.3 Issues Relating to Best Execution of Customer Trades		137
4. Online Lenders		137
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		137
4.2 Underwriting Processes		137
4.3 Sources of Funds for Fiat Currency Loans		137
4.4 Syndication of Fiat Currency Loans		138
5. Payment Processors		138
5.1 Payment Processors’ Use of Payment Rails		138
5.2 Regulation of Cross-Border Payments and Remittances		138
6. Marketplaces, Exchanges and Trading Platforms		138
6.1 Permissible Trading Platforms		138
6.2 Regulation of Different Asset Classes		138
6.3 Impact of the Emergence of Cryptocurrency Exchanges		139
6.4 Listing Standards		139
6.5 Order Handling Rules		139
6.6 Rise of Peer-to-Peer Trading Platforms		139
6.7 Rules of Payment for Order Flow		139
6.8 Market Integrity Principles		139
7. High-Frequency and Algorithmic Trading		140
7.1 Creation and Usage Regulations		140
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		140
7.3 Regulatory Distinction Between Funds and Dealers		140
7.4 Regulation of Programmers and Programming		140
8. Insurtech		140
8.1 Underwriting Processes		140
8.2 Treatment of Different Types of Insurance		140
9. Regtech		141
9.1 Regulation of Regtech Providers		141
9.2 Contractual Terms to Assure Performance and Accuracy		141
10. Blockchain		141
10.1 Use of Blockchain in the Financial Services Industry		141
10.2 Local Regulators’ Approach to Blockchain		141
10.3 Classification of Blockchain Assets		141
10.4 Regulation of “Issuers” of Blockchain Assets		141
10.5 Regulation of Blockchain Asset Trading Platforms		141
10.6 Staking		142
10.7 Crypto-Related Lending		142
10.8 Cryptocurrency Derivatives		142
10.9 Decentralised Finance (DeFi)		142
10.10 Regulation of Funds		142
10.11 Virtual Currencies		143
10.12 Non-Fungible Tokens (NFTs)		143
11. Open Banking		143
11.1 Regulation of Open Banking		143
11.2 Concerns Raised by Open Banking		143
12. Fraud		143
12.1 Elements of Fraud		143
12.2 Areas of Regulatory Focus		143
12.3 Responsibility for Losses		143
1. Fintech Market		148
1.1 Evolution of the Fintech Market		148
2. Fintech Business Models and Regulation in General		148
2.1 Predominant Business Models		148
2.2 Regulatory Regime		149
2.3 Compensation Models		150
2.4 Variations Between the Regulation of Fintech and Legacy Players		150
2.5 Regulatory Sandbox		150
2.6 Jurisdiction of Regulators		151
2.7 No-Action Letters		151
2.8 Outsourcing of Regulated Functions		152
2.9 Gatekeeper Liability		152
2.10 Significant Enforcement Actions		152
2.11 Implications of Additional, Non-Financial Services Regulations		153
2.12 Review of Industry Participants by Parties Other than Regulators		153
2.13 Conjunction of Unregulated and Regulated Products and Services		153
2.14 Impact of AML and Sanctions Rules		154
2.15 Financial Action Task Force Standards		154
2.16 Reverse Solicitation		154
3. Robo-Advisers		154
3.1 Requirement for Different Business Models		154
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		155
3.3 Issues Relating to Best Execution of Customer Trades		155
4. Online Lenders		155
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		155
4.2 Underwriting Processes		155
4.3 Sources of Funds for Fiat Currency Loans		155
4.4 Syndication of Fiat Currency Loans		156
5. Payment Processors		156
5.1 Payment Processors’ Use of Payment Rails		156
5.2 Regulation of Cross-Border Payments and Remittances		156
6. Marketplaces, Exchanges and Trading Platforms		157
6.1 Permissible Trading Platforms		157
6.2 Regulation of Different Asset Classes		157
6.3 Impact of the Emergence of Cryptocurrency Exchanges		157
6.4 Listing Standards		158
6.5 Order Handling Rules		158
6.6 Rise of Peer-to-Peer Trading Platforms		158
6.7 Rules of Payment for Order Flow		159
6.8 Market Integrity Principles		159
7. High-Frequency and Algorithmic Trading		159
7.1 Creation and Usage Regulations		159
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		159
7.3 Regulatory Distinction Between Funds and Dealers		159
7.4 Regulation of Programmers and Programming		159
8. Insurtech		160
8.1 Underwriting Processes		160
8.2 Treatment of Different Types of Insurance		160
9. Regtech		160
9.1 Regulation of Regtech Providers		160
9.2 Contractual Terms to Assure Performance and Accuracy		160
10. Blockchain		161
10.1 Use of Blockchain in the Financial Services Industry		161
10.2 Local Regulators’ Approach to Blockchain		161
10.3 Classification of Blockchain Assets		161
10.4 Regulation of “Issuers” of Blockchain Assets		162
10.5 Regulation of Blockchain Asset Trading Platforms		162
10.6 Staking		163
10.7 Crypto-Related Lending		163
10.8 Cryptocurrency Derivatives		163
10.9 Decentralised Finance (DeFi)		163
10.10 Regulation of Funds		164
10.11 Virtual Currencies		164
10.12 Non-Fungible Tokens (NFTs)		164
11. Open Banking		164
11.1 Regulation of Open Banking		164
11.2 Concerns Raised by Open Banking		164
12. Fraud		164
12.1 Elements of Fraud		164
12.2 Areas of Regulatory Focus		165
12.3 Responsibility for Losses		166
1. Fintech Market		178
1.1 Evolution of the Fintech Market		178
2. Fintech Business Models and Regulation in General		178
2.1 Predominant Business Models		178
2.2 Regulatory Regime		179
2.3 Compensation Models		179
2.4 Variations Between the Regulation of Fintech and Legacy Players		180
2.5 Regulatory Sandbox		180
2.6 Jurisdiction of Regulators		181
2.7 No-Action Letters		181
2.8 Outsourcing of Regulated Functions		181
2.9 Gatekeeper Liability		181
2.10 Significant Enforcement Actions		181
2.11 Implications of Additional, Non-Financial Services Regulations		182
2.12 Review of Industry Participants by Parties Other than Regulators		182
2.13 Conjunction of Unregulated and Regulated Products and Services		183
2.14 Impact of AML and Sanctions Rules		183
2.15 Financial Action Task Force Standards		183
2.16 Reverse Solicitation		183
3. Robo-Advisers		185
3.1 Requirement for Different Business Models		185
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		185
3.3 Issues Relating to Best Execution of Customer Trades		185
4. Online Lenders		186
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		186
4.2 Underwriting Processes		186
4.3 Sources of Funds for Fiat Currency Loans		187
4.4 Syndication of Fiat Currency Loans		187
5. Payment Processors		187
5.1 Payment Processors’ Use of Payment Rails		187
5.2 Regulation of Cross-Border Payments and Remittances		187
6. Marketplaces, Exchanges and Trading Platforms		188
6.1 Permissible Trading Platforms		188
6.2 Regulation of Different Asset Classes		188
6.3 Impact of the Emergence of Cryptocurrency Exchanges		189
6.4 Listing Standards		189
6.5 Order Handling Rules		190
6.6 Rise of Peer-to-Peer Trading Platforms		190
6.7 Rules of Payment for Order Flow		190
6.8 Market Integrity Principles		191
7. High-Frequency and Algorithmic Trading		191
7.1 Creation and Usage Regulations		191
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		191
7.3 Regulatory Distinction Between Funds and Dealers		192
7.4 Regulation of Programmers and Programming		192
8. Insurtech		192
8.1 Underwriting Processes		192
8.2 Treatment of Different Types of Insurance		192
9. Regtech		192
9.1 Regulation of Regtech Providers		192
9.2 Contractual Terms to Assure Performance and Accuracy		193
10. Blockchain		193
10.1 Use of Blockchain in the Financial Services Industry		193
10.2 Local Regulators’ Approach to Blockchain		193
10.3 Classification of Blockchain Assets		194
10.4 Regulation of “Issuers” of Blockchain Assets		194
10.5 Regulation of Blockchain Asset Trading Platforms		195
10.6 Staking		195
10.7 Crypto-Related Lending		196
10.8 Cryptocurrency Derivatives		196
10.9 Decentralised Finance (DeFi)		196
10.10 Regulation of Funds		197
10.11 Virtual Currencies		197
10.12 Non-Fungible Tokens (NFTs)		197
11. Open Banking		197
11.1 Regulation of Open Banking		197
11.2 Concerns Raised by Open Banking		197
12. Fraud		198
12.1 Elements of Fraud		198
12.2 Areas of Regulatory Focus		198
12.3 Responsibility for Losses		199
1. Fintech Market		203
1.1 Evolution of the Fintech Market		203
2. Fintech Business Models and Regulation in General		205
2.1 Predominant Business Models		205
2.2 Regulatory Regime		206
2.3 Compensation Models		207
2.4 Variations Between the Regulation of Fintech and Legacy Players		207
2.5 Regulatory Sandbox		207
2.6 Jurisdiction of Regulators		208
2.7 No-Action Letters		208
2.8 Outsourcing of Regulated Functions		208
2.9 Gatekeeper Liability		209
2.10 Significant Enforcement Actions		209
2.11 Implications of Additional, Non-Financial Services Regulations		209
2.12 Review of Industry Participants by Parties Other than Regulators		209
2.13 Conjunction of Unregulated and Regulated Products and Services		209
2.14 Impact of AML and Sanctions Rules		209
2.15 Financial Action Task Force Standards		210
2.16 Reverse Solicitation		210
3. Robo-Advisers		210
3.1 Requirement for Different Business Models		210
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		210
3.3 Issues Relating to Best Execution of Customer Trades		211
4. Online Lenders		211
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		211
4.2 Underwriting Processes		212
4.3 Sources of Funds for Fiat Currency Loans		212
4.4 Syndication of Fiat Currency Loans		212
5. Payment Processors		212
5.1 Payment Processors’ Use of Payment Rails		212
5.2 Regulation of Cross-Border Payments and Remittances		213
6. Marketplaces, Exchanges and Trading Platforms		213
6.1 Permissible Trading Platforms		213
6.2 Regulation of Different Asset Classes		214
6.3 Impact of the Emergence of Cryptocurrency Exchanges		214
6.4 Listing Standards		214
6.5 Order Handling Rules		214
6.6 Rise of Peer-to-Peer Trading Platforms		214
6.7 Rules of Payment for Order Flow		214
6.8 Market Integrity Principles		215
7. High-Frequency and Algorithmic Trading		215
7.1 Creation and Usage Regulations		215
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		215
7.3 Regulatory Distinction Between Funds and Dealers		216
7.4 Regulation of Programmers and Programming		216
8. Insurtech		216
8.1 Underwriting Processes		216
8.2 Treatment of Different Types of Insurance		216
9. Regtech		216
9.1 Regulation of Regtech Providers		216
9.2 Contractual Terms to Assure Performance and Accuracy		217
10. Blockchain		217
10.1 Use of Blockchain in the Financial Services Industry		217
10.2 Local Regulators’ Approach to Blockchain		217
10.3 Classification of Blockchain Assets		217
10.4 Regulation of “Issuers” of Blockchain Assets		217
10.5 Regulation of Blockchain Asset Trading Platforms		217
10.6 Staking		217
10.7 Crypto-Related Lending		218
10.8 Cryptocurrency Derivatives		218
10.9 Decentralised Finance (DeFi)		218
10.10 Regulation of Funds		218
10.11 Virtual Currencies		218
10.12 Non-Fungible Tokens (NFTs)		218
11. Open Banking		218
11.1 Regulation of Open Banking		218
11.2 Concerns Raised by Open Banking		218
12. Fraud		218
12.1 Elements of Fraud		218
12.2 Areas of Regulatory Focus		219
12.3 Responsibility for Losses		219
1. Fintech Market		224
1.1 Evolution of the Fintech Market		224
2. Fintech Business Models and Regulation in General		224
2.1 Predominant Business Models		224
2.2 Regulatory Regime		224
2.3 Compensation Models		226
2.4 Variations Between the Regulation of Fintech and Legacy Players		226
2.5 Regulatory Sandbox		227
2.6 Jurisdiction of Regulators		227
2.7 No-Action Letters		228
2.8 Outsourcing of Regulated Functions		228
2.9 Gatekeeper Liability		229
2.10 Significant Enforcement Actions		229
2.11 Implications of Additional, Non-Financial Services Regulations		230
2.12 Review of Industry Participants by Parties Other than Regulators		231
2.13 Conjunction of Unregulated and Regulated Products and Services		231
2.14 Impact of AML and Sanctions Rules		231
2.15 Financial Action Task Force Standards		232
2.16 Reverse Solicitation		232
3. Robo-Advisers		232
3.1 Requirement for Different Business Models		232
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		233
3.3 Issues Relating to Best Execution of Customer Trades		233
4. Online Lenders		233
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		233
4.2 Underwriting Processes		234
4.3 Sources of Funds for Fiat Currency Loans		235
4.4 Syndication of Fiat Currency Loans		235
5. Payment Processors		235
5.1 Payment Processors’ Use of Payment Rails		235
5.2 Regulation of Cross-Border Payments and Remittances		236
6. Marketplaces, Exchanges and Trading Platforms		236
6.1 Permissible Trading Platforms		236
6.2 Regulation of Different Asset Classes		236
6.3 Impact of the Emergence of Cryptocurrency Exchanges		237
6.4 Listing Standards		237
6.5 Order Handling Rules		237
6.6 Rise of Peer-to-Peer Trading Platforms		238
6.7 Rules of Payment for Order Flow		238
6.8 Market Integrity Principles		238
7. High-Frequency and Algorithmic Trading		238
7.1 Creation and Usage Regulations		238
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		238
7.3 Regulatory Distinction Between Funds and Dealers		239
7.4 Regulation of Programmers and Programming		239
8. Insurtech		239
8.1 Underwriting Processes		239
8.2 Treatment of Different Types of Insurance		239
9. Regtech		239
9.1 Regulation of Regtech Providers		239
9.2 Contractual Terms to Assure Performance and Accuracy		239
10. Blockchain		240
10.1 Use of Blockchain in the Financial Services Industry		240
10.2 Local Regulators’ Approach to Blockchain		240
10.3 Classification of Blockchain Assets		240
10.4 Regulation of “Issuers” of Blockchain Assets		240
10.5 Regulation of Blockchain Asset Trading Platforms		241
10.6 Staking		241
10.7 Crypto-Related Lending		241
10.8 Cryptocurrency Derivatives		242
10.9 Decentralised Finance (DeFi)		242
10.10 Regulation of Funds		242
10.11 Virtual Currencies		242
10.12 Non-Fungible Tokens (NFTs)		243
11. Open Banking		243
11.1 Regulation of Open Banking		243
11.2 Concerns Raised by Open Banking		243
12. Fraud		243
12.1 Elements of Fraud		243
12.2 Areas of Regulatory Focus		244
12.3 Responsibility for Losses		244
1. Fintech Market		248
1.1 Evolution of the Fintech Market		248
2. Fintech Business Models and Regulation in General		252
2.1 Predominant Business Models		252
2.2 Regulatory Regime		253
2.3 Compensation Models		254
2.4 Variations Between the Regulation of Fintech and Legacy Players		254
2.5 Regulatory Sandbox		255
2.6 Jurisdiction of Regulators		255
2.7 No-Action Letters		255
2.8 Outsourcing of Regulated Functions		256
2.9 Gatekeeper Liability		256
2.10 Significant Enforcement Actions		256
2.11 Implications of Additional, Non-Financial Services Regulations		257
2.12 Review of Industry Participants by Parties Other than Regulators		258
2.13 Conjunction of Unregulated and Regulated Products and Services		259
2.14 Impact of AML and Sanctions Rules		259
2.15 Financial Action Task Force Standards		259
2.16 Reverse Solicitation		260
3. Robo-Advisers		261
3.1 Requirement for Different Business Models		261
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		261
3.3 Issues Relating to Best Execution of Customer Trades		262
4. Online Lenders		262
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		262
4.2 Underwriting Processes		262
4.3 Sources of Funds for Fiat Currency Loans		262
4.4 Syndication of Fiat Currency Loans		263
5. Payment Processors		263
5.1 Payment Processors’ Use of Payment Rails		263
5.2 Regulation of Cross-Border Payments and Remittances		263
6. Marketplaces, Exchanges and Trading Platforms		263
6.1 Permissible Trading Platforms		263
6.2 Regulation of Different Asset Classes		264
6.3 Impact of the Emergence of Cryptocurrency Exchanges		264
6.4 Listing Standards		265
6.5 Order Handling Rules		265
6.6 Rise of Peer-to-Peer Trading Platforms		265
6.7 Rules of Payment for Order Flow		266
6.8 Market Integrity Principles		267
7. High-Frequency and Algorithmic Trading		267
7.1 Creation and Usage Regulations		267
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		267
7.3 Regulatory Distinction Between Funds and Dealers		267
7.4 Regulation of Programmers and Programming		267
8. Insurtech		267
8.1 Underwriting Processes		267
8.2 Treatment of Different Types of Insurance		268
9. Regtech		268
9.1 Regulation of Regtech Providers		268
9.2 Contractual Terms to Assure Performance and Accuracy		268
10. Blockchain		268
10.1 Use of Blockchain in the Financial Services Industry		268
10.2 Local Regulators’ Approach to Blockchain		269
10.3 Classification of Blockchain Assets		270
10.4 Regulation of “Issuers” of Blockchain Assets		270
10.5 Regulation of Blockchain Asset Trading Platforms		271
10.6 Staking		272
10.7 Crypto-Related Lending		273
10.8 Cryptocurrency Derivatives		273
10.9 Decentralised Finance (DeFi)		273
10.10 Regulation of Funds		274
10.11 Virtual Currencies		275
10.12 Non-Fungible Tokens (NFTs)		275
11. Open Banking		276
11.1 Regulation of Open Banking		276
11.2 Concerns Raised by Open Banking		277
12. Fraud		277
12.1 Elements of Fraud		277
12.2 Areas of Regulatory Focus		278
12.3 Responsibility for Losses		278
1. Fintech Market		283
1.1 Evolution of the Fintech Market		283
2. Fintech Business Models and Regulation in General		283
2.1 Predominant Business Models		283
2.2 Regulatory Regime		284
2.3 Compensation Models		284
2.4 Variations Between the Regulation of Fintech and Legacy Players		285
2.5 Regulatory Sandbox		285
2.6 Jurisdiction of Regulators		285
2.7 No-Action Letters		285
2.8 Outsourcing of Regulated Functions		285
2.9 Gatekeeper Liability		286
2.10 Significant Enforcement Actions		286
2.11 Implications of Additional, Non-Financial Services Regulations		286
2.12 Review of Industry Participants by Parties Other than Regulators		286
2.13 Conjunction of Unregulated and Regulated Products and Services		286
2.14 Impact of AML and Sanctions Rules		286
2.15 Financial Action Task Force Standards		286
2.16 Reverse Solicitation		287
3. Robo-Advisers		287
3.1 Requirement for Different Business Models		287
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		287
3.3 Issues Relating to Best Execution of Customer Trades		287
4. Online Lenders		288
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		288
4.2 Underwriting Processes		288
4.3 Sources of Funds for Fiat Currency Loans		288
4.4 Syndication of Fiat Currency Loans		288
5. Payment Processors		288
5.1 Payment Processors’ Use of Payment Rails		288
5.2 Regulation of Cross-Border Payments and Remittances		289
6. Marketplaces, Exchanges and Trading Platforms		289
6.1 Permissible Trading Platforms		289
6.2 Regulation of Different Asset Classes		289
6.3 Impact of the Emergence of Cryptocurrency Exchanges		290
6.4 Listing Standards		290
6.5 Order Handling Rules		290
6.6 Rise of Peer-to-Peer Trading Platforms		290
6.7 Rules of Payment for Order Flow		290
6.8 Market Integrity Principles		291
7. High-Frequency and Algorithmic Trading		291
7.1 Creation and Usage Regulations		291
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		291
7.3 Regulatory Distinction Between Funds and Dealers		291
7.4 Regulation of Programmers and Programming		291
8. Insurtech		292
8.1 Underwriting Processes		292
8.2 Treatment of Different Types of Insurance		292
9. Regtech		292
9.1 Regulation of Regtech Providers		292
9.2 Contractual Terms to Assure Performance and Accuracy		292
10. Blockchain		292
10.1 Use of Blockchain in the Financial Services Industry		292
10.2 Local Regulators’ Approach to Blockchain		293
10.3 Classification of Blockchain Assets		293
10.4 Regulation of “Issuers” of Blockchain Assets		293
10.5 Regulation of Blockchain Asset Trading Platforms		293
10.6 Staking		293
10.7 Crypto-Related Lending		293
10.8 Cryptocurrency Derivatives		294
10.9 Decentralised Finance (DeFi)		294
10.10 Regulation of Funds		294
10.11 Virtual Currencies		294
10.12 Non-Fungible Tokens (NFTs)		294
11. Open Banking		294
11.1 Regulation of Open Banking		294
11.2 Concerns Raised by Open Banking		295
12. Fraud		295
12.1 Elements of Fraud		295
12.2 Areas of Regulatory Focus		295
12.3 Responsibility for Losses		295
1. Fintech Market		299
1.1 Evolution of the Fintech Market		299
2. Fintech Business Models and Regulation in General		302
2.1 Predominant Business Models		302
2.2 Regulatory Regime		304
2.3 Compensation Models		305
2.4 Variations Between the Regulation of Fintech and Legacy Players		305
2.5 Regulatory Sandbox		306
2.6 Jurisdiction of Regulators		307
2.7 No-Action Letters		307
2.8 Outsourcing of Regulated Functions		307
2.9 Gatekeeper Liability		308
2.10 Significant Enforcement Actions		308
2.11 Implications of Additional, Non-Financial Services Regulations		308
2.12 Review of Industry Participants by Parties Other than Regulators		309
2.13 Conjunction of Unregulated and Regulated Products and Services		309
2.14 Impact of AML and Sanctions Rules		309
2.15 Financial Action Task Force Standards		310
2.16 Reverse Solicitation		310
3. Robo-Advisers		310
3.1 Requirement for Different Business Models		310
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		310
3.3 Issues Relating to Best Execution of Customer Trades		311
4. Online Lenders		311
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		311
4.2 Underwriting Processes		311
4.3 Sources of Funds for Fiat Currency Loans		312
4.4 Syndication of Fiat Currency Loans		313
5. Payment Processors		313
5.1 Payment Processors’ Use of Payment Rails		313
5.2 Regulation of Cross-Border Payments and Remittances		313
6. Marketplaces, Exchanges and Trading Platforms		314
6.1 Permissible Trading Platforms		314
6.2 Regulation of Different Asset Classes		314
6.3 Impact of the Emergence of Cryptocurrency Exchanges		314
6.4 Listing Standards		315
6.5 Order Handling Rules		315
6.6 Rise of Peer-to-Peer Trading Platforms		315
6.7 Rules of Payment for Order Flow		315
6.8 Market Integrity Principles		315
7. High-Frequency and Algorithmic Trading		315
7.1 Creation and Usage Regulations		315
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		316
7.3 Regulatory Distinction Between Funds and Dealers		316
7.4 Regulation of Programmers and Programming		316
8. Insurtech		316
8.1 Underwriting Processes		316
8.2 Treatment of Different Types of Insurance		316
9. Regtech		317
9.1 Regulation of Regtech Providers		317
9.2 Contractual Terms to Assure Performance and Accuracy		317
10. Blockchain		317
10.1 Use of Blockchain in the Financial Services Industry		317
10.2 Local Regulators’ Approach to Blockchain		317
10.3 Classification of Blockchain Assets		318
10.4 Regulation of “Issuers” of Blockchain Assets		318
10.5 Regulation of Blockchain Asset Trading Platforms		318
10.6 Staking		318
10.7 Crypto-Related Lending		318
10.8 Cryptocurrency Derivatives		318
10.9 Decentralised Finance (DeFi)		318
10.10 Regulation of Funds		318
10.11 Virtual Currencies		318
10.12 Non-Fungible Tokens (NFTs)		319
11. Open Banking		319
11.1 Regulation of Open Banking		319
11.2 Concerns Raised by Open Banking		319
12. Fraud		319
12.1 Elements of Fraud		319
12.2 Areas of Regulatory Focus		320
12.3 Responsibility for Losses		320
1. Fintech Market		332
1.1 Evolution of the Fintech Market		332
2. Fintech Business Models and Regulation in General		334
2.1 Predominant Business Models		334
2.2 Regulatory Regime		334
2.3 Compensation Models		334
2.4 Variations Between the Regulation of Fintech and Legacy Players		334
2.5 Regulatory Sandbox		335
2.6 Jurisdiction of Regulators		335
2.7 No-Action Letters		336
2.8 Outsourcing of Regulated Functions		336
2.9 Gatekeeper Liability		337
2.10 Significant Enforcement Actions		337
2.11 Implications of Additional, Non-Financial Services Regulations		337
2.12 Review of Industry Participants by Parties Other than Regulators		338
2.13 Conjunction of Unregulated and Regulated Products and Services		338
2.14 Impact of AML and Sanctions Rules		339
2.15 Financial Action Task Force Standards		339
2.16 Reverse Solicitation		339
3. Robo-Advisers		339
3.1 Requirement for Different Business Models		339
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		340
3.3 Issues Relating to Best Execution of Customer Trades		340
4. Online Lenders		340
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		340
4.2 Underwriting Processes		340
4.3 Sources of Funds for Fiat Currency Loans		340
4.4 Syndication of Fiat Currency Loans		341
5. Payment Processors		341
5.1 Payment Processors’ Use of Payment Rails		341
5.2 Regulation of Cross-Border Payments and Remittances		341
6. Marketplaces, Exchanges and Trading Platforms		341
6.1 Permissible Trading Platforms		341
6.2 Regulation of Different Asset Classes		342
6.3 Impact of the Emergence of Cryptocurrency Exchanges		343
6.4 Listing Standards		343
6.5 Order Handling Rules		344
6.6 Rise of Peer-to-Peer Trading Platforms		344
6.7 Rules of Payment for Order Flow		345
6.8 Market Integrity Principles		345
7. High-Frequency and Algorithmic Trading		345
7.1 Creation and Usage Regulations		345
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		346
7.3 Regulatory Distinction Between Funds and Dealers		346
7.4 Regulation of Programmers and Programming		346
8. Insurtech		346
8.1 Underwriting Processes		346
8.2 Treatment of Different Types of Insurance		347
9. Regtech		347
9.1 Regulation of Regtech Providers		347
9.2 Contractual Terms to Assure Performance and Accuracy		348
10. Blockchain		348
10.1 Use of Blockchain in the Financial Services Industry		348
10.2 Local Regulators’ Approach to Blockchain		348
10.3 Classification of Blockchain Assets		349
10.4 Regulation of “Issuers” of Blockchain Assets		350
10.5 Regulation of Blockchain Asset Trading Platforms		350
10.6 Staking		351
10.7 Crypto-Related Lending		351
10.8 Cryptocurrency Derivatives		351
10.9 Decentralised Finance (DeFi)		351
10.10 Regulation of Funds		351
10.11 Virtual Currencies		352
10.12 Non-Fungible Tokens (NFTs)		352
11. Open Banking		352
11.1 Regulation of Open Banking		352
11.2 Concerns Raised by Open Banking		352
12. Fraud		353
12.1 Elements of Fraud		353
12.2 Areas of Regulatory Focus		354
12.3 Responsibility for Losses		354
1. Fintech Market		369
1.1 Evolution of the Fintech Market		369
2. Fintech Business Models and Regulation in General		370
2.1 Predominant Business Models		370
2.2 Regulatory Regime		371
2.3 Compensation Models		373
2.4 Variations Between the Regulation of Fintech and Legacy Players		373
2.5 Regulatory Sandbox		373
2.6 Jurisdiction of Regulators		373
2.7 No-Action Letters		374
2.8 Outsourcing of Regulated Functions		374
2.9 Gatekeeper Liability		374
2.10 Significant Enforcement Actions		375
2.11 Implications of Additional, Non-Financial Services Regulations		375
2.12 Review of Industry Participants by Parties Other than Regulators		375
2.13 Conjunction of Unregulated and Regulated Products and Services		375
2.14 Impact of AML and Sanctions Rules		375
2.15 Financial Action Task Force Standards		376
2.16 Reverse Solicitation		376
3. Robo-Advisers		376
3.1 Requirement for Different Business Models		376
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		377
3.3 Issues Relating to Best Execution of Customer Trades		377
4. Online Lenders		377
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		377
4.2 Underwriting Processes		378
4.3 Sources of Funds for Fiat Currency Loans		378
4.4 Syndication of Fiat Currency Loans		378
5. Payment Processors		378
5.1 Payment Processors’ Use of Payment Rails		378
5.2 Regulation of Cross-Border Payments and Remittances		378
6. Marketplaces, Exchanges and Trading Platforms		378
6.1 Permissible Trading Platforms		378
6.2 Regulation of Different Asset Classes		379
6.3 Impact of the Emergence of Cryptocurrency Exchanges		379
6.4 Listing Standards		379
6.5 Order Handling Rules		379
6.6 Rise of Peer-to-Peer Trading Platforms		379
6.7 Rules of Payment for Order Flow		379
6.8 Market Integrity Principles		380
7. High-Frequency and Algorithmic Trading		380
7.1 Creation and Usage Regulations		380
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		380
7.3 Regulatory Distinction Between Funds and Dealers		381
7.4 Regulation of Programmers and Programming		381
8. Insurtech		381
8.1 Underwriting Processes		381
8.2 Treatment of Different Types of Insurance		381
9. Regtech		381
9.1 Regulation of Regtech Providers		381
9.2 Contractual Terms to Assure Performance and Accuracy		381
10. Blockchain		382
10.1 Use of Blockchain in the Financial Services Industry		382
10.2 Local Regulators’ Approach to Blockchain		382
10.3 Classification of Blockchain Assets		382
10.4 Regulation of “Issuers” of Blockchain Assets		383
10.5 Regulation of Blockchain Asset Trading Platforms		383
10.6 Staking		383
10.7 Crypto-Related Lending		384
10.8 Cryptocurrency Derivatives		384
10.9 Decentralised Finance (DeFi)		384
10.10 Regulation of Funds		385
10.11 Virtual Currencies		386
10.12 Non-Fungible Tokens (NFTs)		386
11. Open Banking		386
11.1 Regulation of Open Banking		386
11.2 Concerns Raised by Open Banking		386
12. Fraud		387
12.1 Elements of Fraud		387
12.2 Areas of Regulatory Focus		387
12.3 Responsibility for Losses		387
1. Fintech Market		403
1.1 Evolution of the Fintech Market		403
2. Fintech Business Models and Regulation in General		404
2.1 Predominant Business Models		404
2.2 Regulatory Regime		404
2.3 Compensation Models		405
2.4 Variations Between the Regulation of Fintech and Legacy Players		405
2.5 Regulatory Sandbox		405
2.6 Jurisdiction of Regulators		405
2.7 No-Action Letters		406
2.8 Outsourcing of Regulated Functions		407
2.9 Gatekeeper Liability		407
2.10 Significant Enforcement Actions		407
2.11 Implications of Additional, Non-Financial Services Regulations		408
2.12 Review of Industry Participants by Parties Other than Regulators		408
2.13 Conjunction of Unregulated and Regulated Products and Services		408
2.14 Impact of AML and Sanctions Rules		409
2.15 Financial Action Task Force Standards		409
2.16 Reverse Solicitation		409
3. Robo-Advisers		409
3.1 Requirement for Different Business Models		409
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		409
3.3 Issues Relating to Best Execution of Customer Trades		409
4. Online Lenders		410
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		410
4.2 Underwriting Processes		410
4.3 Sources of Funds for Fiat Currency Loans		410
4.4 Syndication of Fiat Currency Loans		410
5. Payment Processors		410
5.1 Payment Processors’ Use of Payment Rails		410
5.2 Regulation of Cross-Border Payments and Remittances		411
6. Marketplaces, Exchanges and Trading Platforms		411
6.1 Permissible Trading Platforms		411
6.2 Regulation of Different Asset Classes		411
6.3 Impact of the Emergence of Cryptocurrency Exchanges		411
6.4 Listing Standards		412
6.5 Order Handling Rules		413
6.6 Rise of Peer-to-Peer Trading Platforms		413
6.7 Rules of Payment for Order Flow		413
6.8 Market Integrity Principles		413
7. High-Frequency and Algorithmic Trading		414
7.1 Creation and Usage Regulations		414
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		414
7.3 Regulatory Distinction Between Funds and Dealers		414
7.4 Regulation of Programmers and Programming		414
8. Insurtech		414
8.1 Underwriting Processes		414
8.2 Treatment of Different Types of Insurance		415
9. Regtech		415
9.1 Regulation of Regtech Providers		415
9.2 Contractual Terms to Assure Performance and Accuracy		415
10. Blockchain		415
10.1 Use of Blockchain in the Financial Services Industry		415
10.2 Local Regulators’ Approach to Blockchain		415
10.3 Classification of Blockchain Assets		416
10.4 Regulation of “Issuers” of Blockchain Assets		416
10.5 Regulation of Blockchain Asset Trading Platforms		418
10.6 Staking		418
10.7 Crypto-Related Lending		418
10.8 Cryptocurrency Derivatives		418
10.9 Decentralised Finance (DeFi)		419
10.10 Regulation of Funds		419
10.11 Virtual Currencies		420
10.12 Non-Fungible Tokens (NFTs)		420
11. Open Banking		421
11.1 Regulation of Open Banking		421
11.2 Concerns Raised by Open Banking		421
12. Fraud		421
12.1 Elements of Fraud		421
12.2 Areas of Regulatory Focus		421
12.3 Responsibility for Losses		422
1. Fintech Market		435
1.1 Evolution of the Fintech Market		435
2. Fintech Business Models and Regulation in General		435
2.1 Predominant Business Models		435
2.2 Regulatory Regime		436
2.3 Compensation Models		437
2.4 Variations Between the Regulation of Fintech and Legacy Players		437
2.5 Regulatory Sandbox		437
2.6 Jurisdiction of Regulators		438
2.7 No-Action Letters		438
2.8 Outsourcing of Regulated Functions		438
2.9 Gatekeeper Liability		438
2.10 Significant Enforcement Actions		438
2.11 Implications of Additional, Non-Financial Services Regulations		439
2.12 Review of Industry Participants by Parties Other than Regulators		439
2.13 Conjunction of Unregulated and Regulated Products and Services		439
2.14 Impact of AML and Sanctions Rules		439
2.15 Financial Action Task Force Standards		439
2.16 Reverse Solicitation		439
3. Robo-Advisers		440
3.1 Requirement for Different Business Models		440
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		440
3.3 Issues Relating to Best Execution of Customer Trades		440
4. Online Lenders		440
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		440
4.2 Underwriting Processes		441
4.3 Sources of Funds for Fiat Currency Loans		441
4.4 Syndication of Fiat Currency Loans		441
5. Payment Processors		441
5.1 Payment Processors’ Use of Payment Rails		441
5.2 Regulation of Cross-Border Payments and Remittances		442
6. Marketplaces, Exchanges and Trading Platforms		442
6.1 Permissible Trading Platforms		442
6.2 Regulation of Different Asset Classes		442
6.3 Impact of the Emergence of Cryptocurrency Exchanges		442
6.4 Listing Standards		442
6.5 Order Handling Rules		442
6.6 Rise of Peer-to-Peer Trading Platforms		443
6.7 Rules of Payment for Orde r Flow		443
6.8 Market Integrity Principles		443
7. High-Frequency and Algorithmic Trading		443
7.1 Creation and Usage Regulations		443
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		443
7.3 Regulatory Distinction Between Funds and Dealers		443
7.4 Regulation of Programmers and Programming		443
8. Insurtech		443
8.1 Underwriting Processes		443
8.2 Treatment of Different Types of Insurance		444
9. Regtech		444
9.1 Regulation of Regtech Providers		444
9.2 Contractual Terms to Assure Performance and Accuracy		444
10. Blockchain		444
10.1 Use of Blockchain in the Financial Services Industry		444
10.2 Local Regulators’ Approach to Blockchain		444
10.3 Classification of Blockchain Assets		444
10.4 Regulation of “Issuers” of Blockchain Assets		445
10.5 Regulation of Blockchain Asset Trading Platforms		445
10.6 Staking		445
10.7 Crypto-Related Lending		445
10.8 Cryptocurrency Derivatives		446
10.9 Decentralised Finance (DeFi)		446
10.10 Regulation of Funds		446
10.11 Virtual Currencies		446
10.12 Non-Fungible Tokens (NFTs)		446
11. Open Banking		447
11.1 Regulation of Open Banking		447
11.2 Concerns Raised by Open Banking		447
12. Fraud		447
12.1 Elements of Fraud		447
12.2 Areas of Regulatory Focus		448
12.3 Responsibility for Losses		448
1. Fintech Market		453
1.1 Evolution of the Fintech Market		453
2. Fintech Business Models and Regulation in General		454
2.1 Predominant Business Models		454
2.2 Regulatory Regime		455
2.3 Compensation Models		456
2.4 Variations Between the Regulation of Fintech and Legacy Players		458
2.5 Regulatory Sandbox		458
2.6 Jurisdiction of Regulators		459
2.7 No-Action Letters		459
2.8 Outsourcing of Regulated Functions		459
2.9 Gatekeeper Liability		460
2.10 Significant Enforcement Actions		460
2.11 Implications of Additional, Non-Financial Services Regulations		460
2.12 Review of Industry Participants by Parties Other than Regulators		462
2.13 Conjunction of Unregulated and Regulated Products and Services		462
2.14 Impact of AML and Sanctions Rules		462
2.15 Financial Action Task Force Standards		463
2.16 Reverse Solicitation		463
3. Robo-Advisers		464
3.1 Requirement for Different Business Models		464
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		464
3.3 Issues Relating to Best Execution of Customer Trades		464
4. Online Lenders		464
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		464
4.2 Underwriting Processes		465
4.3 Sources of Funds for Fiat Currency Loans		465
4.4 Syndication of Fiat Currency Loans		466
5. Payment Processors		466
5.1 Payment Processors’ Use of Payment Rails		466
5.2 Regulation of Cross-Border Payments and Remittances		466
6. Marketplaces, Exchanges and Trading Platforms		467
6.1 Permissible Trading Platforms		467
6.2 Regulation of Different Asset Classes		467
6.3 Impact of the Emergence of Cryptocurrency Exchanges		468
6.4 Listing Standards		468
6.5 Order Handling Rules		468
6.6 Rise of Peer-to-Peer Trading Platforms		469
6.7 Rules of Payment for Order Flow		469
6.8 Market Integrity Principles		469
7. High-Frequency and Algorithmic Trading		470
7.1 Creation and Usage Regulations		470
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		470
7.3 Regulatory Distinction Between Funds and Dealers		470
7.4 Regulation of Programmers and Programming		470
8. Insurtech		470
8.1 Underwriting Processes		470
8.2 Treatment of Different Types of Insurance		470
9. Regtech		471
9.1 Regulation of Regtech Providers		471
9.2 Contractual Terms to Assure Performance and Accuracy		471
10. Blockchain		471
10.1 Use of Blockchain in the Financial Services Industry		471
10.2 Local Regulators’ Approach to Blockchain		471
10.3 Classification of Blockchain Assets		471
10.4 Regulation of “Issuers” of Blockchain Assets		472
10.5 Regulation of Blockchain Asset Trading Platforms		472
10.6 Staking		472
10.7 Crypto-Related Lending		472
10.8 Cryptocurrency Derivatives		473
10.9 Decentralised Finance (DeFi)		473
10.10 Regulation of Funds		473
10.11 Virtual Currencies		473
10.12 Non-Fungible Tokens (NFTs)		474
11. Open Banking		474
11.1 Regulation of Open Banking		474
11.2 Concerns Raised by Open Banking		474
12. Fraud		474
12.1 Elements of Fraud		474
12.2 Areas of Regulatory Focus		474
12.3 Responsibility for Losses		475
1. Fintech Market		479
1.1 Evolution of the Fintech Market		479
2. Fintech Business Models and Regulation in General		480
2.1 Predominant Business Models		480
2.2 Regulatory Regime		481
2.3 Compensation Models		482
2.4 Variations Between the Regulation of Fintech and Legacy Players		483
2.5 Regulatory Sandbox		483
2.6 Jurisdiction of Regulators		483
2.7 No-Action Letters		484
2.8 Outsourcing of Regulated Functions		484
2.9 Gatekeeper Liability		485
2.10 Significant Enforcement Actions		485
2.11 Implications of Additional, Non-Financial Services Regulations		486
2.12 Review of Industry Participants by Parties Other than Regulators		486
2.13 Conjunction of Unregulated and Regulated Products and Services		486
2.14 Impact of AML and Sanctions Rules		487
2.15 Financial Action Task Force Standards		487
2.16 Reverse Solicitation		487
3. Robo-Advisers		487
3.1 Requirement for Different Business Models		487
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		488
3.3 Issues Relating to Best Execution of Customer Trades		488
4. Online Lenders		488
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		488
4.2 Underwriting Processes		488
4.3 Sources of Funds for Fiat Currency Loans		489
4.4 Syndication of Fiat Currency Loans		489
5. Payment Processors		489
5.1 Payment Processors’ Use of Payment Rails		489
5.2 Regulation of Cross-Border Payments and Remittances		489
6. Marketplaces, Exchanges and Trading Platforms		489
6.1 Permissible Trading Platforms		489
6.2 Regulation of Different Asset Classes		490
6.3 Impact of the Emergence of Cryptocurrency Exchanges		490
6.4 Listing Standards		490
6.5 Order Handling Rules		491
6.6 Rise of Peer-to-Peer Trading Platforms		491
6.7 Rules of Payment for Order Flow		492
6.8 Market Integrity Principles		492
7. High-Frequency and Algorithmic Trading		492
7.1 Creation and Usage Regulations		492
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		493
7.3 Regulatory Distinction Between Funds and Dealers		493
7.4 Regulation of Programmers and Programming		493
8. Insurtech		494
8.1 Underwriting Processes		494
8.2 Treatment of Different Types of Insurance		494
9. Regtech		494
9.1 Regulation of Regtech Providers		494
9.2 Contractual Terms to Assure Performance and Accuracy		495
10. Blockchain		495
10.1 Use of Blockchain in the Financial Services Industry		495
10.2 Local Regulators’ Approach to Blockchain		496
10.3 Classification of Blockchain Assets		496
10.4 Regulation of “Issuers” of Blockchain Assets		496
10.5 Regulation of Blockchain Asset Trading Platforms		497
10.6 Staking		497
10.7 Crypto-Related Lending		498
10.8 Cryptocurrency Derivatives		498
10.9 Decentralised Finance (DeFi)		498
10.10 Regulation of Funds		498
10.11 Virtual Currencies		498
10.12 Non-Fungible Tokens (NFTs)		498
11. Open Banking		499
11.1 Regulation of Open Banking		499
11.2 Concerns Raised by Open Banking		499
12. Fraud		499
12.1 Elements of Fraud		499
12.2 Areas of Regulatory Focus		500
12.3 Responsibility for Losses		500
1. Fintech Market		504
1.1 Evolution of the Fintech Market		504
2. Fintech Business Models and Regulation in General		505
2.1 Predominant Business Models		505
2.2 Regulatory Regime		506
2.3 Compensation Models		507
2.4 Variations Between the Regulation of Fintech and Legacy Players		507
2.5 Regulatory Sandbox		507
2.6 Jurisdiction of Regulators		507
2.7 No-Action Letters		508
2.8 Outsourcing of Regulated Functions		508
2.9 Gatekeeper Liability		508
2.10 Significant Enforcement Actions		509
2.11 Implications of Additional, Non-Financial Services Regulations		509
2.12 Review of Industry Participants by Parties Other than Regulators		510
2.13 Conjunction of Unregulated and Regulated Products and Services		510
2.14 Impact of AML and Sanctions Rules		510
2.15 Financial Action Task Force Standards		510
2.16 Reverse Solicitation		510
3. Robo-Advisers		511
3.1 Requirement for Different Business Models		511
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		511
3.3 Issues Relating to Best Execution of Customer Trades		511
4. Online Lenders		511
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		511
4.2 Underwriting Processes		512
4.3 Sources of Funds for Fiat Currency Loans		512
4.4 Syndication of Fiat Currency Loans		513
5. Payment Processors		513
5.1 Payment Processors’ Use of Payment Rails		513
5.2 Regulation of Cross-Border Payments and Remittances		513
6. Marketplaces, Exchanges and Trading Platforms		514
6.1 Permissible Trading Platforms		514
6.2 Regulation of Different Asset Classes		514
6.3 Impact of the Emergence of Cryptocurrency Exchanges		514
6.4 Listing Standards		514
6.5 Order Handling Rules		515
6.6 Rise of Peer-to-Peer Trading Platforms		515
6.7 Rules of Payment for Order Flow		515
6.8 Market Integrity Principles		515
7. High-Frequency and Algorithmic Trading		515
7.1 Creation and Usage Regulations		515
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		516
7.3 Regulatory Distinction Between Funds and Dealers		516
7.4 Regulation of Programmers and Programming		516
8. Insurtech		516
8.1 Underwriting Processes		516
8.2 Treatment of Different Types of Insurance		517
9. Regtech		517
9.1 Regulation of Regtech Providers		517
9.2 Contractual Terms to Assure Performance and Accuracy		517
10. Blockchain		517
10.1 Use of Blockchain in the Financial Services Industry		517
10.2 Local Regulators’ Approach to Blockchain		518
10.3 Classification of Blockchain Assets		518
10.4 Regulation of “Issuers” of Blockchain Assets		519
10.5 Regulation of Blockchain Asset Trading Platforms		519
10.6 Staking		520
10.7 Crypto-Related Lending		520
10.8 Cryptocurrency Derivatives		520
10.9 Decentralised Finance (DeFi)		520
10.10 Regulation of Funds		520
10.11 Virtual Currencies		521
10.12 Non-Fungible Tokens (NFTs)		521
11. Open Banking		521
11.1 Regulation of Open Banking		521
11.2 Concerns Raised by Open Banking		521
12. Fraud		522
12.1 Elements of Fraud		522
12.2 Areas of Regulatory Focus		522
12.3 Responsibility for Losses		522
1. Fintech Market		532
1.1 Evolution of the Fintech Market		532
2. Fintech Business Models and Regulation in General		533
2.1 Predominant Business Models		533
2.2 Regulatory Regime		533
2.3 Compensation Models		533
2.4 Variations Between the Regulation of Fintech and Legacy Players		534
2.5 Regulatory Sandbox		534
2.6 Jurisdiction of Regulators		534
2.7 No-Action Letters		535
2.8 Outsourcing of Regulated Functions		535
2.9 Gatekeeper Liability		536
2.10 Significant Enforcement Actions		536
2.11 Implications of Additional, Non-Financial Services Regulations		537
2.12 Review of Industry Participants by Parties Other than Regulators		537
2.13 Conjunction of Unregulated and Regulated Products and Services		537
2.14 Impact of AML and Sanctions Rules		538
2.15 Financial Action Task Force Standards		538
2.16 Reverse Solicitation		538
3. Robo-Advisers		538
3.1 Requirement for Different Business Models		538
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		539
3.3 Issues Relating to Best Execution of Customer Trades		539
4. Online Lenders		539
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		539
4.2 Underwriting Processes		539
4.3 Sources of Funds for Fiat Currency Loans		539
4.4 Syndication of Fiat Currency Loans		540
5. Payment Processors		540
5.1 Payment Processors’ Use of Payment Rails		540
5.2 Regulation of Cross-Border Payments and Remittances		540
6. Marketplaces, Exchanges and Trading Platforms		541
6.1 Permissible Trading Platforms		541
6.2 Regulation of Different Asset Classes		541
6.3 Impact of the Emergence of Cryptocurrency Exchanges		541
6.4 Listing Standards		542
6.5 Order Handling Rules		542
6.6 Rise of Peer-to-Peer Trading Platforms		542
6.7 Rules of Payment for Order Flow		542
6.8 Market Integrity Principles		542
7. High-Frequency and Algorithmic Trading		543
7.1 Creation and Usage Regulations		543
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		543
7.3 Regulatory Distinction Between Funds and Dealers		544
7.4 Regulation of Programmers and Programming		544
8. Insurtech		544
8.1 Underwriting Processes		544
8.2 Treatment of Different Types of Insurance		544
9. Regtech		544
9.1 Regulation of Regtech Providers		544
9.2 Contractual Terms to Assure Performance and Accuracy		544
10. Blockchain		545
10.1 Use of Blockchain in the Financial Services Industry		545
10.2 Local Regulators’ Approach to Blockchain		545
10.3 Classification of Blockchain Assets		545
10.4 Regulation of “Issuers” of Blockchain Assets		546
10.5 Regulation of Blockchain Asset Trading Platforms		547
10.6 Staking		547
10.7 Crypto-Related Lending		548
10.8 Cryptocurrency Derivatives		548
10.9 Decentralised Finance (DeFi)		548
10.10 Regulation of Funds		549
10.11 Virtual Currencies		549
10.12 Non-Fungible Tokens (NFTs)		549
11. Open Banking		550
11.1 Regulation of Open Banking		550
11.2 Concerns Raised by Open Banking		550
12. Fraud		550
12.1 Elements of Fraud		550
12.2 Areas of Regulatory Focus		550
12.3 Responsibility for Losses		550
1. Fintech Market		562
1.1 Evolution of the Fintech Market		562
2. Fintech Business Models and Regulation in General		565
2.1 Predominant Business Models		565
2.2 Regulatory Regime		566
2.3 Compensation Models		567
2.4 Variations Between the Regulation of Fintech and Legacy Players		567
2.5 Regulatory Sandbox		567
2.6 Jurisdiction of Regulators		568
2.7 No-Action Letters		568
2.8 Outsourcing of Regulated Functions		569
2.9 Gatekeeper Liability		569
2.10 Significant Enforcement Actions		569
2.11 Implications of Additional, Non-Financial Services Regulations		570
2.12 Review of Industry Participants by Parties Other than Regulators		571
2.13 Conjunction of Unregulated and Regulated Products and Services		571
2.14 Impact of AML and Sanctions Rules		571
2.15 Financial Action Task Force Standards		571
2.16 Reverse Solicitation		572
3. Robo-Advisers		572
3.1 Requirement for Different Business Models		572
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		572
3.3 Issues Relating to Best Execution of Customer Trades		572
4. Online Lenders		573
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		573
4.2 Underwriting Processes		573
4.3 Sources of Funds for Fiat Currency Loans		573
4.4 Syndication of Fiat Currency Loans		573
5. Payment Processors		574
5.1 Payment Processors’ Use of Payment Rails		574
5.2 Regulation of Cross-Border Payments and Remittances		574
6. Marketplaces, Exchanges and Trading Platforms		574
6.1 Permissible Trading Platforms		574
6.2 Regulation of Different Asset Classes		575
6.3 Impact of the Emergence of Cryptocurrency Exchanges		575
6.4 Listing Standards		576
6.5 Order Handling Rules		577
6.6 Rise of Peer-to-Peer Trading Platforms		577
6.7 Rules of Payment for Order Flow		577
6.8 Market Integrity Principles		578
7. High-Frequency and Algorithmic Trading		578
7.1 Creation and Usage Regulations		578
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		578
7.3 Regulatory Distinction Between Funds and Dealers		578
7.4 Regulation of Programmers and Programming		578
8. Insurtech		579
8.1 Underwriting Processes		579
8.2 Treatment of Different Types of Insurance		579
9. Regtech		579
9.1 Regulation of Regtech Providers		579
9.2 Contractual Terms to Assure Performance and Accuracy		579
10. Blockchain		580
10.1 Use of Blockchain in the Financial Services Industry		580
10.2 Local Regulators’ Approach to Blockchain		580
10.3 Classification of Blockchain Assets		580
10.4 Regulation of “Issuers” of Blockchain Assets		580
10.5 Regulation of Blockchain Asset Trading Platforms		580
10.6 Staking		581
10.7 Crypto-Related Lending		581
10.8 Cryptocurrency Derivatives		581
10.9 Decentralised Finance (DeFi)		581
10.10 Regulation of Funds		581
10.11 Virtual Currencies		582
10.12 Non-Fungible Tokens (NFTs)		582
11. Open Banking		582
11.1 Regulation of Open Banking		582
11.2 Concerns Raised by Open Banking		582
12. Fraud		582
12.1 Elements of Fraud		582
12.2 Areas of Regulatory Focus		582
12.3 Responsibility for Losses		583
1. Fintech Market		596
1.1 Evolution of the Fintech Market		596
2. Fintech Business Models and Regulation in General		596
2.1 Predominant Business Models		596
2.2 Regulatory Regime		596
2.3 Compensation Models		597
2.4 Variations Between the Regulation of Fintech and Legacy Players		597
2.5 Regulatory Sandbox		598
2.6 Jurisdiction of Regulators		598
2.7 No-Action Letters		598
2.8 Outsourcing of Regulated Functions		598
2.9 Gatekeeper Liability		599
2.10 Significant Enforcement Actions		599
2.11 Implications of Additional, Non-Financial Services Regulations		599
2.12 Review of Industry Participants by Parties Other than Regulators		600
2.13 Conjunction of Unregulated and Regulated Products and Services		600
2.14 Impact of AML and Sanctions Rules		600
2.15 Financial Action Task Force Standards		600
2.16 Reverse Solicitation		601
3. Robo-Advisers		601
3.1 Requirement for Different Business Models		601
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		601
3.3 Issues Relating to Best Execution of Customer Trades		601
4. Online Lenders		601
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		601
4.2 Underwriting Processes		602
4.3 Sources of Funds for Fiat Currency Loans		602
4.4 Syndication of Fiat Currency Loans		603
5. Payment Processors		603
5.1 Payment Processors’ Use of Payment Rails		603
5.2 Regulation of Cross-Border Payments and Remittances		603
6. Marketplaces, Exchanges and Trading Platforms		603
6.1 Permissible Trading Platforms		603
6.2 Regulation of Different Asset Classes		604
6.3 Impact of the Emergence of Cryptocurrency Exchanges		604
6.4 Listing Standards		604
6.5 Order Handling Rules		605
6.6 Rise of Peer-to-Peer Trading Platforms		605
6.7 Rules of Payment for Order Flow		605
6.8 Market Integrity Principles		605
7. High-Frequency and Algorithmic Trading		605
7.1 Creation and Usage Regulations		605
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		605
7.3 Regulatory Distinction Between Funds and Dealers		606
7.4 Regulation of Programmers and Programming		606
8. Insurtech		606
8.1 Underwriting Processes		606
8.2 Treatment of Different Types of Insurance		606
9. Regtech		607
9.1 Regulation of Regtech Providers		607
9.2 Contractual Terms to Assure Performance and Accuracy		607
10. Blockchain		607
10.1 Use of Blockchain in the Financial Services Industry		607
10.2 Local Regulators’ Approach to Blockchain		607
10.3 Classification of Blockchain Assets		607
10.4 Regulation of “Issuers” of Blockchain Assets		608
10.5 Regulation of Blockchain Asset Trading Platforms		608
10.6 Staking		608
10.7 Crypto-Related Lending		608
10.8 Cryptocurrency Derivatives		608
10.9 Decentralised Finance (DeFi)		608
10.10 Regulation of Funds		608
10.11 Virtual Currencies		608
10.12 Non-Fungible Tokens (NFTs)		609
11. Open Banking		609
11.1 Regulation of Open Banking		609
11.2 Concerns Raised by Open Banking		609
12. Fraud		609
12.1 Elements of Fraud		609
12.2 Areas of Regulatory Focus		609
12.3 Responsibility for Losses		610
1. Fintech Market		622
1.1 Evolution of the Fintech Market		622
2. Fintech Business Models and Regulation in General		623
2.1 Predominant Business Models		623
2.2 Regulatory Regime		624
2.3 Compensation Models		627
2.4 Variations Between the Regulation of Fintech and Legacy Players		627
2.5 Regulatory Sandbox		628
2.6 Jurisdiction of Regulators		629
2.7 No-Action Letters		630
2.8 Outsourcing of Regulated Functions		630
2.9 Gatekeeper Liability		631
2.10 Significant Enforcement Actions		631
2.11 Implications of Additional, Non-Financial Services Regulations		631
2.12 Review of Industry Participants by Parties Other than Regulators		632
2.13 Conjunction of Unregulated and Regulated Products and Services		632
2.14 Impact of AML and Sanctions Rules		633
2.15 Financial Action Task Force Standards		633
2.16 Reverse Solicitation		633
3. Robo-Advisers		633
3.1 Requirement for Different Business Models		633
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		633
3.3 Issues Relating to Best Execution of Customer Trades		633
4. Online Lenders		633
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		633
4.2 Underwriting Processes		634
4.3 Sources of Funds for Fiat Currency Loans		634
4.4 Syndication of Fiat Currency Loans		635
5. Payment Processors		635
5.1 Payment Processors’ Use of Payment Rails		635
5.2 Regulation of Cross-Border Payments and Remittances		635
6. Marketplaces, Exchanges and Trading Platforms		635
6.1 Permissible Trading Platforms		635
6.2 Regulation of Different Asset Classes		635
6.3 Impact of the Emergence of Cryptocurrency Exchanges		635
6.4 Listing Standards		636
6.5 Order Handling Rules		636
6.6 Rise of Peer-to-Peer Trading Platforms		636
6.7 Rules of Payment for Order Flow		636
6.8 Market Integrity Principles		636
7. High-Frequency and Algorithmic Trading		636
7.1 Creation and Usage Regulations		636
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		636
7.3 Regulatory Distinction Between Funds and Dealers		636
7.4 Regulation of Programmers and Programming		636
8. Insurtech		637
8.1 Underwriting Processes		637
8.2 Treatment of Different Types of Insurance		637
9. Regtech		637
9.1 Regulation of Regtech Providers		637
9.2 Contractual Terms to Assure Performance and Accuracy		637
10. Blockchain		637
10.1 Use of Blockchain in the Financial Services Industry		637
10.2 Local Regulators’ Approach to Blockchain		637
10.3 Classification of Blockchain Assets		638
10.4 Regulation of “Issuers” of Blockchain Assets		638
10.5 Regulation of Blockchain Asset Trading Platforms		639
10.6 Staking		639
10.7 Crypto-Related Lending		639
10.8 Cryptocurrency Derivatives		639
10.9 Decentralised Finance (DeFi)		639
10.10 Regulation of Funds		639
10.11 Virtual Currencies		639
10.12 Non-Fungible Tokens (NFTs)		639
11. Open Banking		639
11.1 Regulation of Open Banking		639
11.2 Concerns Raised by Open Banking		640
12. Fraud		640
12.1 Elements of Fraud		640
12.2 Areas of Regulatory Focus		640
12.3 Responsibility for Losses		640
1. Fintech Market		649
1.1 Evolution of the Fintech Market		649
2. Fintech Business Models and Regulation in General		649
2.1 Predominant Business Models		649
2.2 Regulatory Regime		650
2.3 Compensation Models		650
2.4 Variations Between the Regulation of Fintech and Legacy Players		651
2.5 Regulatory Sandbox		651
2.6 Jurisdiction of Regulators		651
2.7 No-Action Letters		652
2.8 Outsourcing of Regulated Functions		652
2.9 Gatekeeper Liability		653
2.10 Significant Enforcement Actions		653
2.11 Implications of Additional, Non-Financial Services Regulations		653
2.12 Review of Industry Participants by Parties Other than Regulators		654
2.13 Conjunction of Unregulated and Regulated Products and Services		655
2.14 Impact of AML and Sanctions Rules		655
2.15 Financial Action Task Force Standards		655
2.16 Reverse Solicitation		655
3. Robo-Advisers		656
3.1 Requirement for Different Business Models		656
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		656
3.3 Issues Relating to Best Execution of Customer Trades		656
4. Online Lenders		656
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		656
4.2 Underwriting Processes		657
4.3 Sources of Funds for Fiat Currency Loans		657
4.4 Syndication of Fiat Currency Loans		658
5. Payment Processors		658
5.1 Payment Processors’ Use of Payment Rails		658
5.2 Regulation of Cross-Border Payments and Remittances		659
6. Marketplaces, Exchanges and Trading Platforms		659
6.1 Permissible Trading Platforms		659
6.2 Regulation of Different Asset Classes		660
6.3 Impact of the Emergence of Cryptocurrency Exchanges		660
6.4 Listing Standards		661
6.5 Order Handling Rules		661
6.6 Rise of Peer-to-Peer Trading Platforms		661
6.7 Rules of Payment for Order Flow		661
6.8 Market Integrity Principles		662
7. High-Frequency and Algorithmic Trading		662
7.1 Creation and Usage Regulations		662
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		662
7.3 Regulatory Distinction Between Funds and Dealers		662
7.4 Regulation of Programmers and Programming		662
8. Insurtech		663
8.1 Underwriting Processes		663
8.2 Treatment of Different Types of Insurance		663
9. Regtech		663
9.1 Regulation of Regtech Providers		663
9.2 Contractual Terms to Assure Performance and Accuracy		663
10. Blockchain		664
10.1 Use of Blockchain in the Financial Services Industry		664
10.2 Local Regulators’ Approach to Blockchain		664
10.3 Classification of Blockchain Assets		664
10.4 Regulation of “Issuers” of Blockchain Assets		665
10.5 Regulation of Blockchain Asset Trading Platforms		665
10.6 Staking		665
10.7 Crypto-Related Lending		666
10.8 Cryptocurrency Derivatives		666
10.9 Decentralised Finance (DeFi)		666
10.10 Regulation of Funds		666
10.11 Virtual Currencies		666
10.12 Non-Fungible Tokens (NFTs)		667
11. Open Banking		667
11.1 Regulation of Open Banking		667
11.2 Concerns Raised by Open Banking		667
12. Fraud		667
12.1 Elements of Fraud		667
12.2 Areas of Regulatory Focus		667
12.3 Responsibility for Losses		668
1. Fintech Market		682
1.1 Evolution of the Fintech Market		682
2. Fintech Business Models and Regulation in General		683
2.1 Predominant Business Models		683
2.2 Regulatory Regime		683
2.3 Compensation Models		684
2.4 Variations Between the Regulation of Fintech and Legacy Players		684
2.5 Regulatory Sandbox		685
2.6 Jurisdiction of Regulators		685
2.7 No-Action Letters		686
2.8 Outsourcing of Regulated Functions		686
2.9 Gatekeeper Liability		687
2.10 Significant Enforcement Actions		687
2.11 Implications of Additional, Non-Financial Services Regulations		687
2.12 Review of Industry Participants by Parties Other than Regulators		687
2.13 Conjunction of Unregulated and Regulated Products and Services		688
2.14 Impact of AML and Sanctions Rules		688
2.15 Financial Action Task Force Standards		689
2.16 Reverse Solicitation		689
3. Robo-Advisers		689
3.1 Requirement for Different Business Models		689
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		689
3.3 Issues Relating to Best Execution of Customer Trades		689
4. Online Lenders		690
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		690
4.2 Underwriting Processes		690
4.3 Sources of Funds for Fiat Currency Loans		690
4.4 Syndication of Fiat Currency Loans		691
5. Payment Processors		691
5.1 Payment Processors’ Use of Payment Rails		691
5.2 Regulation of Cross-Border Payments and Remittances		691
6. Marketplaces, Exchanges and Trading Platforms		692
6.1 Permissible Trading Platforms		692
6.2 Regulation of Different Asset Classes		692
6.3 Impact of the Emergence of Cryptocurrency Exchanges		693
6.4 Listing Standards		693
6.5 Order Handling Rules		693
6.6 Rise of Peer-to-Peer Trading Platforms		694
6.7 Rules of Payment for Order Flow		694
6.8 Market Integrity Principles		694
7. High-Frequency and Algorithmic Trading		694
7.1 Creation and Usage Regulations		694
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		695
7.3 Regulatory Distinction Between Funds and Dealers		695
7.4 Regulation of Programmers and Programming		695
8. Insurtech		695
8.1 Underwriting Processes		695
8.2 Treatment of Different Types of Insurance		696
9. Regtech		696
9.1 Regulation of Regtech Providers		696
9.2 Contractual Terms to Assure Performance and Accuracy		697
10. Blockchain		697
10.1 Use of Blockchain in the Financial Services Industry		697
10.2 Local Regulators’ Approach to Blockchain		697
10.3 Classification of Blockchain Assets		698
10.4 Regulation of “Issuers” of Blockchain Assets		698
10.5 Regulation of Blockchain Asset Trading Platforms		699
10.6 Staking		699
10.7 Crypto-Related Lending		699
10.8 Cryptocurrency Derivatives		699
10.9 Decentralised Finance (DeFi)		699
10.10 Regulation of Funds		700
10.11 Virtual Currencies		700
10.12 Non-Fungible Tokens (NFTs)		700
11. Open Banking		700
11.1 Regulation of Open Banking		700
11.2 Concerns Raised by Open Banking		701
12. Fraud		702
12.1 Elements of Fraud		702
12.2 Areas of Regulatory Focus		702
12.3 Responsibility for Losses		702
1. Fintech Market		716
1.1 Evolution of the Fintech Market		716
2. Fintech Business Models and Regulation in General		716
2.1 Predominant Business Models		716
2.2 Regulatory Regime		717
2.3 Compensation Models		720
2.4 Variations Between the Regulation of Fintech and Legacy Players		722
2.5 Regulatory Sandbox		722
2.6 Jurisdiction of Regulators		723
2.7 No-Action Letters		723
2.8 Outsourcing of Regulated Functions		723
2.9 Gatekeeper Liability		723
2.10 Significant Enforcement Actions		724
2.11 Implications of Additional, Non-Financial Services Regulations		724
2.12 Review of Industry Participants by Parties Other than Regulators		724
2.13 Conjunction of Unregulated and Regulated Products and Services		725
2.14 Impact of AML and Sanctions Rules		725
2.15 Financial Action Task Force Standards		725
2.16 Reverse Solicitation		726
3. Robo-Advisers		726
3.1 Requirement for Different Business Models		726
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		726
3.3 Issues Relating to Best Execution of Customer Trades		727
4. Online Lenders		727
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		727
4.2 Underwriting Processes		727
4.3 Sources of Funds for Fiat Currency Loans		728
4.4 Syndication of Fiat Currency Loans		728
5. Payment Processors		728
5.1 Payment Processors’ Use of Payment Rails		728
5.2 Regulation of Cross-Border Payments and Remittances		729
6. Marketplaces, Exchanges and Trading Platforms		729
6.1 Permissible Trading Platforms		729
6.2 Regulation of Different Asset Classes		729
6.3 Impact of the Emergence of Cryptocurrency Exchanges		730
6.4 Listing Standards		730
6.5 Order Handling Rules		730
6.6 Rise of Peer-to-Peer Trading Platforms		731
6.7 Rules of Payment for Order Flow		731
6.8 Market Integrity Principles		731
7. High-Frequency and Algorithmic Trading		732
7.1 Creation and Usage Regulations		732
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		732
7.3 Regulatory Distinction Between Funds and Dealers		733
7.4 Regulation of Programmers and Programming		733
8. Insurtech		733
8.1 Underwriting Processes		733
8.2 Treatment of Different Types of Insurance		734
9. Regtech		734
9.1 Regulation of Regtech Providers		734
9.2 Contractual Terms to Assure Performance and Accuracy		734
10. Blockchain		734
10.1 Use of Blockchain in the Financial Services Industry		734
10.2 Local Regulators’ Approach to Blockchain		735
10.3 Classification of Blockchain Assets		735
10.4 Regulation of “Issuers” of Blockchain Assets		736
10.5 Regulation of Blockchain Asset Trading Platforms		736
10.6 Staking		737
10.7 Crypto-Related Lending		737
10.8 Cryptocurrency Derivatives		737
10.9 Decentralised Finance (DeFi)		737
10.10 Regulation of Funds		738
10.11 Virtual Currencies		738
10.12 Non-Fungible Tokens (NFTs)		738
11. Open Banking		738
11.1 Regulation of Open Banking		738
11.2 Concerns Raised by Open Banking		739
12. Fraud		739
12.1 Elements of Fraud		739
12.2 Areas of Regulatory Focus		739
12.3 Responsibility for Losses		740
1. Fintech Market		752
1.1 Evolution of the Fintech Market		752
2. Fintech Business Models and Regulation in General		752
2.1 Predominant Business Models		752
2.2 Regulatory Regime		753
2.3 Compensation Models		754
2.4 Variations Between the Regulation of Fintech and Legacy Players		754
2.5 Regulatory Sandbox		755
2.6 Jurisdiction of Regulators		755
2.7 No-Action Letters		756
2.8 Outsourcing of Regulated Functions		756
2.9 Gatekeeper Liability		756
2.10 Significant Enforcement Actions		756
2.11 Implications of Additional, Non-Financial Services Regulations		757
2.12 Review of Industry Participants by Parties Other than Regulators		757
2.13 Conjunction of Unregulated and Regulated Products and Services		757
2.14 Impact of AML and Sanctions Rules		758
2.15 Financial Action Task Force Standards		758
2.16 Reverse Solicitation		758
3. Robo-Advisers		759
3.1 Requirement for Different Business Models		759
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		759
3.3 Issues Relating to Best Execution of Customer Trades		759
4. Online Lenders		759
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		759
4.2 Underwriting Processes		760
4.3 Sources of Funds for Fiat Currency Loans		760
4.4 Syndication of Fiat Currency Loans		760
5. Payment Processors		761
5.1 Payment Processors’ Use of Payment Rails		761
5.2 Regulation of Cross-Border Payments and Remittances		761
6. Marketplaces, Exchanges and Trading Platforms		761
6.1 Permissible Trading Platforms		761
6.2 Regulation of Different Asset Classes		762
6.3 Impact of the Emergence of Cryptocurrency Exchanges		762
6.4 Listing Standards		763
6.5 Order Handling Rules		763
6.6 Rise of Peer-to-Peer Trading Platforms		764
6.7 Rules of Payment for Order Flow		764
6.8 Market Integrity Principles		765
7. High-Frequency and Algorithmic Trading		765
7.1 Creation and Usage Regulations		765
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		766
7.3 Regulatory Distinction Between Funds and Dealers		766
7.4 Regulation of Programmers and Programming		766
8. Insurtech		767
8.1 Underwriting Processes		767
8.2 Treatment of Different Types of Insurance		767
9. Regtech		768
9.1 Regulation of Regtech Providers		768
9.2 Contractual Terms to Assure Performance and Accuracy		768
10. Blockchain		768
10.1 Use of Blockchain in the Financial Services Industry		768
10.2 Local Regulators’ Approach to Blockchain		769
10.3 Classification of Blockchain Assets		769
10.4 Regulation of “Issuers” of Blockchain Assets		769
10.5 Regulation of Blockchain Asset Trading Platforms		770
10.6 Staking		770
10.7 Crypto-Related Lending		770
10.8 Cryptocurrency Derivatives		770
10.9 Decentralised Finance (DeFi)		770
10.10 Regulation of Funds		770
10.11 Virtual Currencies		771
10.12 Non-Fungible Tokens (NFTs)		771
11. Open Banking		771
11.1 Regulation of Open Banking		771
11.2 Concerns Raised by Open Banking		771
12. Fraud		772
12.1 Elements of Fraud		772
12.2 Areas of Regulatory Focus		772
12.3 Responsibility for Losses		772
1. Fintech Market		786
1.1 Evolution of the Fintech Market		786
2. Fintech Business Models and Regulation in General		786
2.1 Predominant Business Models		786
2.2 Regulatory Regime		787
2.3 Compensation Models		788
2.4 Variations Between the Regulation of Fintech and Legacy Players		788
2.5 Regulatory Sandbox		788
2.6 Jurisdiction of Regulators		789
2.7 No-Action Letters		789
2.8 Outsourcing of Regulated Functions		790
2.9 Gatekeeper Liability		790
2.10 Significant Enforcement Actions		790
2.11 Implications of Additional, Non-Financial Services Regulations		791
2.12 Review of Industry Participants by Parties Other than Regulators		791
2.13 Conjunction of Unregulated and Regulated Products and Services		792
2.14 Impact of AML and Sanctions Rules		792
2.15 Financial Action Task Force Standards		792
2.16 Reverse Solicitation		793
3. Robo-Advisers		793
3.1 Requirement for Different Business Models		793
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		793
3.3 Issues Relating to Best Execution of Customer Trades		793
4. Online Lenders		793
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		793
4.2 Underwriting Processes		794
4.3 Sources of Funds for Fiat Currency Loans		795
4.4 Syndication of Fiat Currency Loans		795
5. Payment Processors		795
5.1 Payment Processors’ Use of Payment Rails		795
5.2 Regulation of Cross-Border Payments and Remittances		795
6. Marketplaces, Exchanges and Trading Platforms		795
6.1 Permissible Trading Platforms		795
6.2 Regulation of Different Asset Classes		796
6.3 Impact of the Emergence of Cryptocurrency Exchanges		796
6.4 Listing Standards		796
6.5 Order Handling Rules		797
6.6 Rise of Peer-to-Peer Trading Platforms		797
6.7 Rules of Payment for Order Flow		797
6.8 Market Integrity Principles		798
7. High-Frequency and Algorithmic Trading		798
7.1 Creation and Usage Regulations		798
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		798
7.3 Regulatory Distinction Between Funds and Dealers		799
7.4 Regulation of Programmers and Programming		799
8. Insurtech		799
8.1 Underwriting Processes		799
8.2 Treatment of Different Types of Insurance		799
9. Regtech		800
9.1 Regulation of Regtech Providers		800
9.2 Contractual Terms to Assure Performance and Accuracy		800
10. Blockchain		800
10.1 Use of Blockchain in the Financial Services Industry		800
10.2 Local Regulators’ Approach to Blockchain		800
10.3 Classification of Blockchain Assets		800
10.4 Regulation of “Issuers” of Blockchain Assets		801
10.5 Regulation of Blockchain Asset Trading Platforms		801
10.6 Staking		801
10.7 Crypto-Related Lending		801
10.8 Cryptocurrency Derivatives		801
10.9 Decentralised Finance (DeFi)		801
10.10 Regulation of Funds		801
10.11 Virtual Currencies		801
10.12 Non-Fungible Tokens (NFTs)		801
11. Open Banking		802
11.1 Regulation of Open Banking		802
11.2 Concerns Raised by Open Banking		802
12. Fraud		802
12.1 Elements of Fraud		802
12.2 Areas of Regulatory Focus		802
12.3 Responsibility for Losses		803
1. Fintech Market		807
1.1 Evolution of the Fintech Market		807
2. Fintech Business Models and Regulation in General		807
2.1 Predominant Business Models		807
2.2 Regulatory Regime		808
2.3 Compensation Models		810
2.4 Variations Between the Regulation of Fintech and Legacy Players		810
2.5 Regulatory Sandbox		810
2.6 Jurisdiction of Regulators		811
2.7 No-Action Letters		811
2.8 Outsourcing of Regulated Functions		812
2.9 Gatekeeper Liability		812
2.10 Significant Enforcement Actions		813
2.11 Implications of Additional, Non-Financial Services Regulations		813
2.12 Review of Industry Participants by Parties Other than Regulators		814
2.13 Conjunction of Unregulated and Regulated Products and Services		814
2.14 Impact of AML and Sanctions Rules		815
2.15 Financial Action Task Force Standards		815
2.16 Reverse Solicitation		816
3. Robo-Advisers		816
3.1 Requirement for Different Business Models		816
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		817
3.3 Issues Relating to Best Execution of Customer Trades		817
4. Online Lenders		817
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		817
4.2 Underwriting Processes		817
4.3 Sources of Funds for Fiat Currency Loans		817
4.4 Syndication of Fiat Currency Loans		818
5. Payment Processors		818
5.1 Payment Processors’ Use of Payment Rails		818
5.2 Regulation of Cross-Border Payments and Remittances		818
6. Marketplaces, Exchanges and Trading Platforms		819
6.1 Permissible Trading Platforms		819
6.2 Regulation of Different Asset Classes		819
6.3 Impact of the Emergence of Cryptocurrency Exchanges		820
6.4 Listing Standards		820
6.5 Order Handling Rules		820
6.6 Rise of Peer-to-Peer Trading Platforms		820
6.7 Rules of Payment for Order Flow		821
6.8 Market Integrity Principles		821
7. High-Frequency and Algorithmic Trading		821
7.1 Creation and Usage Regulations		821
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		822
7.3 Regulatory Distinction Between Funds and Dealers		822
7.4 Regulation of Programmers and Programming		822
8. Insurtech		822
8.1 Underwriting Processes		822
8.2 Treatment of Different Types of Insurance		823
9. Regtech		823
9.1 Regulation of Regtech Providers		823
9.2 Contractual Terms to Assure Performance and Accuracy		823
10. Blockchain		823
10.1 Use of Blockchain in the Financial Services Industry		823
10.2 Local Regulators’ Approach to Blockchain		824
10.3 Classification of Blockchain Assets		824
10.4 Regulation of “Issuers” of Blockchain Assets		825
10.5 Regulation of Blockchain Asset Trading Platforms		825
10.6 Staking		825
10.7 Crypto-Related Lending		825
10.8 Cryptocurrency Derivatives		825
10.9 Decentralised Finance (DeFi)		825
10.10 Regulation of Funds		826
10.11 Virtual Currencies		826
10.12 Non-Fungible Tokens (NFTs)		826
11. Open Banking		827
11.1 Regulation of Open Banking		827
11.2 Concerns Raised by Open Banking		827
12. Fraud		827
12.1 Elements of Fraud		827
12.2 Areas of Regulatory Focus		828
12.3 Responsibility for Losses		829
1. Fintech Market		843
1.1 Evolution of the Fintech Market		843
2. Fintech Business Models and Regulation in General		843
2.1 Predominant Business Models		843
2.2 Regulatory Regime		843
2.3 Compensation Models		845
2.4 Variations Between the Regulation of Fintech and Legacy Players		846
2.5 Regulatory Sandbox		846
2.6 Jurisdiction of Regulators		846
2.7 No-Action Letters		846
2.8 Outsourcing of Regulated Functions		846
2.9 Gatekeeper Liability		847
2.10 Significant Enforcement Actions		848
2.11 Implications of Additional, Non-Financial Services Regulations		848
2.12 Review of Industry Participants by Parties Other than Regulators		848
2.13 Conjunction of Unregulated and Regulated Products and Services		848
2.14 Impact of AML and Sanctions Rules		849
2.15 Financial Action Task Force Standards		849
2.16 Reverse Solicitation		849
3. Robo-Advisers		849
3.1 Requirement for Different Business Models		849
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		849
3.3 Issues Relating to Best Execution of Customer Trades		849
4. Online Lenders		850
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		850
4.2 Underwriting Processes		850
4.3 Sources of Funds for Fiat Currency Loans		850
4.4 Syndication of Fiat Currency Loans		851
5. Payment Processors		851
5.1 Payment Processors’ Use of Payment Rails		851
5.2 Regulation of Cross-Border Payments and Remittances		851
6. Marketplaces, Exchanges and Trading Platforms		851
6.1 Permissible Trading Platforms		851
6.2 Regulation of Different Asset Classes		851
6.3 Impact of the Emergence of Cryptocurrency Exchanges		851
6.4 Listing Standards		852
6.5 Order Handling Rules		852
6.6 Rise of Peer-to-Peer Trading Platforms		853
6.7 Rules of Payment for Order Flow		853
6.8 Market Integrity Principles		853
7. High-Frequency and Algorithmic Trading		854
7.1 Creation and Usage Regulations		854
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		854
7.3 Regulatory Distinction Between Funds and Dealers		854
7.4 Regulation of Programmers and Programming		854
8. Insurtech		854
8.1 Underwriting Processes		854
8.2 Treatment of Different Types of Insurance		855
9. Regtech		856
9.1 Regulation of Regtech Providers		856
9.2 Contractual Terms to Assure Performance and Accuracy		856
10. Blockchain		856
10.1 Use of Blockchain in the Financial Services Industry		856
10.2 Local Regulators’ Approach to Blockchain		856
10.3 Classification of Blockchain Assets		857
10.4 Regulation of “Issuers” of Blockchain Assets		857
10.5 Regulation of Blockchain Asset Trading Platforms		858
10.6 Staking		858
10.7 Crypto-Related Lending		858
10.8 Cryptocurrency Derivatives		859
10.9 Decentralised Finance (DeFi)		859
10.10 Regulation of Funds		859
10.11 Virtual Currencies		859
10.12 Non-Fungible Tokens (NFTs)		859
11. Open Banking		859
11.1 Regulation of Open Banking		859
11.2 Concerns Raised by Open Banking		860
12. Fraud		860
12.1 Elements of Fraud		860
12.2 Areas of Regulatory Focus		860
12.3 Responsibility for Losses		860
1. Fintech Market		871
1.1 Evolution of the Fintech Market		871
2. Fintech Business Models and Regulation in General		873
2.1 Predominant Business Models		873
2.2 Regulatory Regime		875
2.3 Compensation Models		876
2.4 Variations Between the Regulation of Fintech and Legacy Players		876
2.5 Regulatory Sandbox		876
2.6 Jurisdiction of Regulators		877
2.7 No-Action Letters		878
2.8 Outsourcing of Regulated Functions		878
2.9 Gatekeeper Liability		879
2.10 Significant Enforcement Actions		879
2.11 Implications of Additional, Non-Financial Services Regulations		880
2.12 Review of Industry Participants by Parties Other than Regulators		880
2.13 Conjunction of Unregulated and Regulated Products and Services		881
2.14 Impact of AML and Sanctions Rules		881
2.15 Financial Action Task Force Standards		881
2.16 Reverse Solicitation		882
3. Robo-Advisers		882
3.1 Requirement for Different Business Models		882
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		882
3.3 Issues Relating to Best Execution of Customer Trades		882
4. Online Lenders		883
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		883
4.2 Underwriting Processes		883
4.3 Sources of Funds for Fiat Currency Loans		883
4.4 Syndication of Fiat Currency Loans		883
5. Payment Processors		883
5.1 Payment Processors’ Use of Payment Rails		883
5.2 Regulation of Cross-Border Payments and Remittances		884
6. Marketplaces, Exchanges and Trading Platforms		884
6.1 Permissible Trading Platforms		884
6.2 Regulation of Different Asset Classes		884
6.3 Impact of the Emergence of Cryptocurrency Exchanges		884
6.4 Listing Standards		884
6.5 Order Handling Rules		885
6.6 Rise of Peer-to-Peer Trading Platforms		885
6.7 Rules of Payment for Order Flow		885
6.8 Market Integrity Principles		885
7. High-Frequency and Algorithmic Trading		886
7.1 Creation and Usage Regulations		886
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		886
7.3 Regulatory Distinction Between Funds and Dealers		886
7.4 Regulation of Programmers and Programming		886
8. Insurtech		887
8.1 Underwriting Processes		887
8.2 Treatment of Different Types of Insurance		887
9. Regtech		887
9.1 Regulation of Regtech Providers		887
9.2 Contractual Terms to Assure Performance and Accuracy		888
10. Blockchain		888
10.1 Use of Blockchain in the Financial Services Industry		888
10.2 Local Regulators’ Approach to Blockchain		889
10.3 Classification of Blockchain Assets		889
10.4 Regulation of “Issuers” of Blockchain Assets		889
10.5 Regulation of Blockchain Asset Trading Platforms		889
10.6 Staking		891
10.7 Crypto-Related Lending		891
10.8 Cryptocurrency Derivatives		891
10.9 Decentralised Finance (DeFi)		891
10.10 Regulation of Funds		891
10.11 Virtual Currencies		891
10.12 Non-Fungible Tokens (NFTs)		891
11. Open Banking		892
11.1 Regulation of Open Banking		892
11.2 Concerns Raised by Open Banking		892
12. Fraud		892
12.1 Elements of Fraud		892
12.2 Areas of Regulatory Focus		893
12.3 Responsibility for Losses		893
1. Fintech Market		907
1.1 Evolution of the Fintech Market		907
2. Fintech Business Models and Regulation in General		908
2.1 Predominant Business Models		908
2.2 Regulatory Regime		908
2.3 Compensation Models		910
2.4 Variations Between the Regulation of Fintech and Legacy Players		910
2.5 Regulatory Sandbox		910
2.6 Jurisdiction of Regulators		911
2.7 No-Action Letters		911
2.8 Outsourcing of Regulated Functions		911
2.9 Gatekeeper Liability		912
2.10 Significant Enforcement Actions		912
2.11 Implications of Additional, Non-Financial Services Regulations “Onshore UAE”		913
2.12 Review of Industry Participants by Parties Other than Regulators		913
2.13 Conjunction of Unregulated and Regulated Products and Services		913
2.14 Impact of AML and Sanctions Rules		914
2.15 Financial Action Task Force Standards		914
2.16 Reverse Solicitation		914
3. Robo-Advisers		915
3.1 Requirement for Different Business Models		915
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		915
3.3 Issues Relating to Best Execution of Customer Trades		915
4. Online Lenders		916
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		916
4.2 Underwriting Processes		916
4.3 Sources of Funds for Fiat Currency Loans		916
4.4 Syndication of Fiat Currency Loans		916
5. Payment Processors		917
5.1 Payment Processors’ Use of Payment Rails		917
5.2 Regulation of Cross-Border Payments and Remittances		917
6. Marketplaces, Exchanges and Trading Platforms		917
6.1 Permissible Trading Platforms “Onshore UAE”		917
6.2 Regulation of Different Asset Classes		918
6.3 Impact of the Emergence of Cryptocurrency Exchanges		919
6.4 Listing Standards		919
6.5 Order Handling Rules		919
6.6 Rise of Peer-to-Peer Trading Platforms		919
6.7 Rules of Payment for Order Flow		920
6.8 Market Integrity Principles		920
7. High-Frequency and Algorithmic Trading		921
7.1 Creation and Usage Regulations		921
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		921
7.3 Regulatory Distinction Between Funds and Dealers		921
7.4 Regulation of Programmers and Programming		921
8. Insurtech		921
8.1 Underwriting Processes		921
8.2 Treatment of Different Types of Insurance		921
9. Regtech		922
9.1 Regulation of Regtech Providers		922
9.2 Contractual Terms to Assure Performance and Accuracy		922
10. Blockchain		923
10.1 Use of Blockchain in the Financial Services Industry		923
10.2 Local Regulators’ Approach to Blockchain		923
10.3 Classification of Blockchain Assets		923
10.4 Regulation of “Issuers” of Blockchain Assets		924
10.5 Regulation of Blockchain Asset Trading Platforms		925
10.6 Staking		925
10.7 Crypto-Related Lending		925
10.8 Cryptocurrency Derivatives		925
10.9 Decentralised Finance (DeFi)		926
10.10 Regulation of Funds		926
10.11 Virtual Currencies		926
10.12 Non-Fungible Tokens (NFTs)		926
11. Open Banking		927
11.1 Regulation of Open Banking		927
11.2 Concerns Raised by Open Banking		927
12. Fraud		928
12.1 Elements of Fraud		928
12.2 Areas of Regulatory Focus		928
12.3 Responsibility for Losses		929
1. Fintech Market		942
1.1 Evolution of the Fintech Market		942
2. Fintech Business Models and Regulation in General		942
2.1 Predominant Business Models		942
2.2 Regulatory Regime		942
2.3 Compensation Models		942
2.4 Variations Between the Regulation of Fintech and Legacy Players		943
2.5 Regulatory Sandbox		943
2.6 Jurisdiction of Regulators		943
2.7 No-Action Letters		944
2.8 Outsourcing of Regulated Functions		944
2.9 Gatekeeper Liability		944
2.10 Significant Enforcement Actions		944
2.11 Implications of Additional, Non-Financial Services Regulations		944
2.12 Review of Industry Participants by Parties Other than Regulators		944
2.13 Conjunction of Unregulated and Regulated Products and Services		944
2.14 Impact of AML and Sanctions Rules		945
2.15 Financial Action Task Force Standards		945
2.16 Reverse Solicitation		945
3. Robo-Advisers		945
3.1 Requirement for Different Business Models		945
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		946
3.3 Issues Relating to Best Execution of Customer Trades		946
4. Online Lenders		946
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		946
4.2 Underwriting Processes		946
4.3 Sources of Funds for Fiat Currency Loans		946
4.4 Syndication of Fiat Currency Loans		947
5. Payment Processors		947
5.1 Payment Processors’ Use of Payment Rails		947
5.2 Regulation of Cross-Border Payments and Remittances		947
6. Marketplaces, Exchanges and Trading Platforms		947
6.1 Permissible Trading Platforms		947
6.2 Regulation of Different Asset Classes		947
6.3 Impact of the Emergence of Cryptocurrency Exchanges		948
6.4 Listing Standards		948
6.5 Order Handling Rules		948
6.6 Rise of Peer-to-Peer Trading Platforms		949
6.7 Rules of Payment for Order Flow		949
6.8 Market Integrity Principles		949
7. High-Frequency and Algorithmic Trading		949
7.1 Creation and Usage Regulations		949
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		949
7.3 Regulatory Distinction Between Funds and Dealers		950
7.4 Regulation of Programmers and Programming		950
8. Insurtech		950
8.1 Underwriting Processes		950
8.2 Treatment of Different Types of Insurance		950
9. Regtech		950
9.1 Regulation of Regtech Providers		950
9.2 Contractual Terms to Assure Performance and Accuracy		950
10. Blockchain		951
10.1 Use of Blockchain in the Financial Services Industry		951
10.2 Local Regulators’ Approach to Blockchain		951
10.3 Classification of Blockchain Assets		951
10.4 Regulation of “Issuers” of Blockchain Assets		952
10.5 Regulation of Blockchain Asset Trading Platforms		952
10.6 Staking		952
10.7 Crypto-Related Lending		953
10.8 Cryptocurrency Derivatives		953
10.9 Decentralised Finance (DeFi)		953
10.10 Regulation of Funds		953
10.11 Virtual Currencies		953
10.12 Non-Fungible Tokens (NFTs)		954
11. Open Banking		954
11.1 Regulation of Open Banking		954
11.2 Concerns Raised by Open Banking		954
12. Fraud		954
12.1 Elements of Fraud		954
12.2 Areas of Regulatory Focus		955
12.3 Responsibility for Losses		955
1. Fintech Market		967
1.1 Evolution of the Fintech Market		967
2. Fintech Business Models and Regulation in General		967
2.1 Predominant Business Models		967
2.2 Regulatory Regime		968
2.3 Compensation Models		969
2.4 Variations Between the Regulation of Fintech and Legacy Players		969
2.5 Regulatory Sandbox		970
2.6 Jurisdiction of Regulators		970
2.7 No-Action Letters		970
2.8 Outsourcing of Regulated Functions		970
2.9 Gatekeeper Liability		970
2.10 Significant Enforcement Actions		971
2.11 Implications of Additional, Non-Financial Services Regulations		972
2.12 Review of Industry Participants by Parties Other than Regulators		972
2.13 Conjunction of Unregulated and Regulated Products and Services		972
2.14 Impact of AML and Sanctions Rules		972
2.15 Financial Action Task Force Standards		973
2.16 Reverse Solicitation		973
3. Robo-Advisers		974
3.1 Requirement for Different Business Models		974
3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers		974
3.3 Issues Relating to Best Execution of Customer Trades		974
4. Online Lenders		974
4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities		974
4.2 Underwriting Processes		974
4.3 Sources of Funds for Fiat Currency Loans		975
4.4 Syndication of Fiat Currency Loans		975
5. Payment Processors		975
5.1 Payment Processors’ Use of Payment Rails		975
5.2 Regulation of Cross-Border Payments and Remittances		976
6. Marketplaces, Exchanges and Trading Platforms		976
6.1 Permissible Trading Platforms		976
6.2 Regulation of Different Asset Classes		976
6.3 Impact of the Emergence of Cryptocurrency Exchanges		976
6.4 Listing Standards		977
6.5 Order Handling Rules		977
6.6 Rise of Peer-to-Peer Trading Platforms		978
6.7 Rules of Payment for Order Flow		978
6.8 Market Integrity Principles		978
7. High-Frequency and Algorithmic Trading		978
7.1 Creation and Usage Regulations		978
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity		979
7.3 Regulatory Distinction Between Funds and Dealers		979
7.4 Regulation of Programmers and Programming		979
8. Insurtech		980
8.1 Underwriting Processes		980
8.2 Treatment of Different Types of Insurance		980
9. Regtech		980
9.1 Regulation of Regtech Providers		980
9.2 Contractual Terms to Assure Performance and Accuracy		981
10. Blockchain		981
10.1 Use of Blockchain in the Financial Services Industry		981
10.2 Local Regulators’ Approach to Blockchain		981
10.3 Classification of Blockchain Assets		981
10.4 Regulation of “Issuers” of Blockchain Assets		982
10.5 Regulation of Blockchain Asset Trading Platforms		982
10.6 Staking		982
10.7 Crypto-Related Lending		982
10.8 Cryptocurrency Derivatives		982
10.9 Decentralised Finance (DeFi)		983
10.10 Regulation of Funds		983
10.11 Virtual Currencies		983
10.12 Non-Fungible Tokens (NFTs)		984
11. Open Banking		984
11.1 Regulation of Open Banking		984
11.2 Concerns Raised by Open Banking		984
12. Fraud		985
12.1 Elements of Fraud		985
12.2 Areas of Regulatory Focus		985
12.3 Responsibility for Losses		985

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