GFIN, or the Global Financial Innovation Network, has gained multiple US regulators as members. GFIN now lists the US Securities and Exchange Commission (SEC), Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC) as members joining the Commodity Futures Trading Commission (CFTC) which joined some time ago.
GFIN is the creation of the UK Financial Conduct Authority – largely regarded as the leading regulator when it comes to embracing Fintech innovation including Regtech. Today, there are 46 individual regulators participating in GFIN. Formally launched in January 2019, GFIN was built on the FCA’s early 2018 proposal to create a global Fintech sandbox.
The concept was discussed in the summer of 2018 as part of a consultation that initially involved regulatory agencies from the US (CFTC), Singapore, Hong Kong, Australian, Canada and more.
In a joint statement, the new US members said:
“U.S. financial regulators have taken proactive steps in recent years to enhance regulatory clarity and understanding for all stakeholders and promote early identification of emerging regulatory opportunities, challenges, and risks. Participation in the GFIN furthers these objectives and enhances the agencies’ abilities to encourage responsible innovation in the financial services industry in the United States and abroad. By promoting knowledge-sharing on innovation in financial services, U.S. members of GFIN will seek to advance financial and market integrity, consumer and investor protection, financial inclusion, competition, and financial stability. Participation in international organizations such as this helps U.S. financial regulators represent the interests and needs of the nation and its financial services stakeholders.
The agencies join 46 other financial authorities, central banks, and international organizations from around the globe that are members of the GFIN to foster greater cooperation among financial authorities on a variety of innovation topics, regulatory approaches, and lessons learned.”
The US operates in a vastly different regulatory environment in contrast to most other jurisdictions. Unlike the UK where most financial services are regulated by a single agency, the FCA, the US has about a dozen federal agencies that touch financial services creating an enormously difficult regulatory ecosystem. This convoluted approach also acts as a hidden tax on society as innovation and change are more difficult to pursue.
Regardless, the addition of the aforementioned US financial regulators is very important for the global Fintech innovation sector.