One year ago, former NYDFS (New York Department of Financial Services) Superintendent Maria T Vullo, issued a statement in which she said her organization, which regulate New York financial markets, “fiercely opposes the Department of Treasury’s endorsement of regulatory ‘sandboxes’ for financial technology companies.”
Vullo’s strong stance was based on her belief that fintech firms were trying to wiggle out of abiding by laws that other financial firms were beholden to:
“The idea that innovation will flourish only by allowing companies to evade laws that protect consumers, and which also safeguard markets and mitigate risk for the financial services industry, is preposterous.”
“Toddlers play in sandboxes. Adults play by the rules,” she said.
But yesterday, the NYDFS’s new superintendent, Linda A Lacewell announced the creation of a new, “Research and Innovation Division at the Department of Financial Services (DFS)…(and) leadership appointments…strengthening the mission of the Department as technology transforms the regulatory landscape.”
According to the announcement, “Matthew Homer will lead…as Executive Deputy Superintendent; Matthew Siegel and Olivia Bumgardner will be Deputy Superintendents…; and Andrew Lucas will serve as Counsel…”
The new division of the NYDFS has been launched to forward the state of New York as a centre for innovation in finance, Superintendent Bracewell states:
“The financial services regulatory landscape needs to evolve and adapt as innovation in banking, insurance and regulatory technology continues to grow…This new division and these appointments position DFS as the regulator of the future, allowing the Department to better protect consumers, develop best practices, and analyze market data to strengthen New York’s standing as the center of financial innovation.”
Cryptocurrency firms who covet the customer base in New York financial markets have long complained about onerous regulations in the state that they claimed were there to protect incumbents’ market share.
The new division, the NYDFS hopes, will “preserve New York’s competitiveness” in financial innovation:
“The new Research and Innovation Division will support internal transformation and market innovation, ensuring that DFS keeps pace with the rapid changes in all sectors of the financial services industry and that New York remains the jurisdiction of choice for innovators. It will house the Department’s division responsible for licensing and supervising virtual currencies, and it will assess new efforts to use technology to address financial exclusion; identify and protect consumer data rights; and encourage innovations in the financial services marketplace to preserve New York’s competitiveness as a financial innovation hub.”