FCA regulation: Bye bye clipboard and grey sweater, hello ultra-modern FinTech startups as Sandbox prepares to go live

Thirty one years ago, when the quasi-judicial Securities and Investments Board gave way to the then-newly established Financial Services Authority (FSA) under the leadership of Prime Minister Margaret Thatcher and the auspices of Chancellor of the Exchequer Nigel Lawson, a new era in financial services regulation dawned, cementing the reputation of London’s financial services center […]

FCA regulation: Bye bye grey sweater hello t-shirts

Thirty one years ago, when the quasi-judicial Securities and Investments Board gave way to the then-newly established Financial Services Authority (FSA) under the leadership of Prime Minister Margaret Thatcher and the auspices of Chancellor of the Exchequer Nigel Lawson, a new era in financial services regulation dawned, cementing the reputation of London’s financial services center as a bastion of transparency and reliability worldwide.

Today, the traditional role of the regulator – to supervise the activities of financial services firms, generate reams of bureaucratic paperwork, and conduct audits and inspections – is as obsolete as the pinstripe suit, filofax and red Porsche 944 which were de facto lifestyle accoutrements of the mid-80s City executives who well remember the inauguration of Britain’s first all-encompassing regulatory structure.

7f52001988e14a55cb88bdab523b62d5
This in 1985………

Thirty one years on, regulation is no longer about wearers of said pinstripe suit being subject to reprimands from grey sweater-wearing ex geography teachers turned compliance inspectors, as the ideology among today’s regulatory officials is rapidly becoming much more about the ultra-modern, technologically advanced methods by which the authorities that oversee financial services companies can encourage avantgarde and leading edge development among London’s plate glass institutions which now lead the world in financial technology.

According to the FCA, which on May 9 this year will launch a very interesting experimental project called “Sandbox” which is indeed a technology startup accelerator which focuses purely on the regulation of technology.

The FCA will welcome a “relatively small” number of fintech companies at this initial stage, due to the intensive amount of time and attention that they will receive from the FCA.

As far as criteria is concerned, the FCA will look for startups which demonstrate “genuinely innovative” qualities, for the benefit of customers in Britain and also which must be ready to test, meaning that they are near the end stage of their development cycle and are close to launch.

ID:85118039
….has given way to this in 2016

Consumers will be able to trial the product prototypes, and during the test period there will be regulatory assessment on a case by case basis, rather than a blanket rule for all.

Christopher Woolard, FCA Director of Policy and Risk Research made a statement this week at the Innovative Finance Global Summit:

“This is a bold and complex project for any regulator to undertake. As well as significant potential benefits, it comes with risks. In many ways, it won’t just be the firms that are learning in the sandbox, we will be too. The firms that are successful will be able to test out their innovative ideas without immediately incurring all the normal regulatory consequences.”

Should this test be successful, it will indeed be a case of welcoming a new type of regulatory approach, that being moving away from a hierarchical system to a new, collaborative methodology in which the regulators are as technologically advanced as the firms whose thought processes and innovative prowess they are encouraging.

Photograph: Old Street, London – known today as ‘Silicon Roundabout’ due to FinTech boom

Read this next

Digital Assets

BlackRock digs further into crypto with metaverse ETF

BlackRock, the world’s largest asset manager with almost $10 trillion in AUM, is set to launch a new metaverse ETF to help investors securely monetize on the booming immersive version of the internet.

Digital Assets

Binance wins license in New Zealand as rival Huobi shutters derivatives

Binance, the world’s largest crypto exchange by traded volume, has obtained licenses to operate in New Zealand, even after rival Huobi shutdown derivatives trading last month due to concerns about regulations.

Retail FX

Hong Kong busts perpetrators of ‘ramp and dump’ scam

Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), has charged thirteen suspects of market manipulation in a joint operation with the local police.

Institutional FX

TradingView integrates market data from German Tradegate exchange

TradingView announced that it ‎has increased data coverage to allow its users to receive information from ‎and get free access to the intra-day and tick data from Tradegate Exchange.

Retail FX

Spotware Systems introduces Custom Push Notifications for cTrader mobile apps

Spotware Systems, a technology provider for the electronic trading industry, is introducing a new push notification feature to alert mobile users of price swings and market fluctuations through their cTrader app.

Market News

The Week Ahead: 30 September from David Madden, Market Analyst at Equiti Group

Sterling dominated the headlines last week, as there were concerns the UK government might struggle to service its debt.

Inside View

How does the quality of signal providers affect your business?

A must-have onboarding process for brokers with investment services like PAMM, MAM, or copy trading

Technology

DBS deploys Nasdaq Trade Surveillance

“The confidence that markets and our clients have in DBS as a safe and trusted banking group is anchored on our ability to detect and respond to anomalous activity, which in turn calls for a robust surveillance and prevention infrastructure.”

Industry News

SEC charges Justin Costello and David Ferraro for securities fraud and posing as billionaire veteran

The Securities and Exchange Commission charged Cannabis executive Justin Costello and David Ferraro, an associate of Costello’s, for promoting the stock of several microcap companies on social media without disclosing their own simultaneous stock sales as market prices rose.

<