Regulation  

FCA asks for examples of regulation stifling innovation

FCA asks for examples of regulation stifling innovation

The Financial Conduct Authority wants to hear views as to what barriers exist to innovation in digital and mobile solutions for financial services, including the regulatory barriers which have stifled innovation in the past.

In a ‘call for input’ paper, it called for examples of when rules or policies have stifled development along with things like delays, abandonment of projects and economic impacts.

The FCA asked respondents to bear in mind both domestic regulatory barriers and barriers from EU law, along with any rules or policies that should be introduced to facilitate innovation in digital and mobile solutions for financial services’ products or processes.

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Last year, the regulator launched Project Innovate to ensure that its regulatory regime supported the development of innovative products and services that can “improve the lives of consumers”.

The FCA said that the project hub has seen firms develop new technologies such as digital currencies, cognitive computing and cloud-based services.

“New digital technologies can create opportunities for the financial industry and consumers, and break current financial services structures (e.g. disintermediation through use of distributed ledgers).

“We are interested in learning if there are any regulatory barriers, either in the UK or at EU level, preventing the development of digital solutions.”

In the first seven months, the hub has provided or is in the process of providing on-going assistance to 91 firms as their requests for support met the eligibility criteria.

The FCA has provided informal steers in 34 cases and has also received 137 requests for support that did not meet the eligibility criteria. “These firms either received limited support or an explanation why we could not help in that instance,” it noted.

The regulator added that it has published this call for input to “ensure that our understanding of regulatory barriers is up to date. “We are focusing on innovation in digital and mobile solutions for financial services.”

The FCA wants to hear responses by 7 September.

donia.o’loughlin@ft.com