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US Regulators Launch Fintech Initiatives

Two US regulators recently launched initiatives that will encourage cooperation between the securities industry and its regulators with respect to financial technology (fintech) innovations. The US Commodity Futures Trading Commission (CFTC) launched LabCFTC in May, and the Financial Industry Regulatory Authority (FINRA) announced its Innovation Outreach Initiative earlier this June.

LabCFTC

The aim of LabCFTC is to promote responsible fintech innovation in the markets subject to CFTC regulation. According to CFTC Acting Chairman J. Christopher Giancarlo, LabCFTC is intended to help develop “21st century regulation for today’s digital markets.”

LabCFTC has two main components:

  1. GuidePoint is a dedicated point of contact that fintech innovators can use to engage with the CFTC, learn about the CFTC’s regulatory framework, and obtain feedback and information on the implementation of fintech innovations in the market. The CFTC hopes that GuidePoint can help innovators better understand the CFTC’s regulatory framework and how such framework would apply to their fintech technology.

  2. CFTC 2.0 is an initiative to foster the adoption of new technology within the CFTC’s mission activities through collaboration with the fintech industry.

FINRA Innovation Outreach Initiative

FINRA’s Innovation Outreach Initiative will create a “Fintech Industry Committee” to facilitate discussion on fintech developments and how FINRA’s rules and programs will apply to such developments. The initiative also will focus on communicating with fintech innovators through regional roundtables and timely publications. FINRA President and CEO Robert Cook described the mission as “support[ing] innovation in the industry while maintaining investor protection and market integrity.”

Takeaways

In launching these initiatives, the CFTC and FINRA acknowledged the need for continuing coordination among regulators in the fintech industry. These initiatives are a first step in catching up with similar initiatives launched by regulators in other countries such as the FinTech Hive in Dubai.

Copyright © 2019 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

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About this Author

Emily Lowe, Corporate finance Attorney, Morgan Lewis
Of Counsel

Emily R. Lowe represents clients in commercial transactions, with a focus on the acquisition, use, protection, development, and commercialization of technology and biotechnology. Emily helps domestic and international companies commercialize their products through various commercial vehicles, including manufacturing and supply agreements and distribution strategies, and development and licensing agreements.

412.560.7438
Katherine B. O'Keefe, Morgan Lewis, Technology Lawyer
Associate

Katherine B. O’Keefe is part of a team that handles critical commercial transactions that enable our clients to run their business operations effectively. The team is focused on technology transactions, including licensing, services, and alliance deals that involve emerging technologies such as cloud computing, software as a service (SaaS), and data analytics. Our technology, outsourcing, and commercial transactions lawyers assist clients in managing their online presence, from website development, hosting, and maintenance; to privacy and use policies; to data breach and retention issues.

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