Financial technology – in short FinTech – as a developing disruptive technology, is on its way to replacing traditional services within the financial services industry with the development of alternative technologies. As with any new technology, this development brings with it opportunities, but also a certain risk potential. Due to the rapid development, regulatory authorities around the world are barely behind in finding the necessary regulatory measures to protect customers and investors adequately. Also, in part, novel financial technologies are treated as generally prudent and regulable by the respective competent authorities, which makes access to FinTech companies and the introduction of new technologies much more difficult. Frequently confusing and obscure regulatory frameworks for digital financial services and products often deter FinTech companies from introducing their novel technologies.
However, some countries are already very innovative and are actively promoting the development of novel financial technologies through start-ups, e.g. Within a regulatory “sandbox”, FinTech will be able to experiment with novel technologies within a “trial period” under certain conditions without being regulated. At the same time, investor protection should be ensured through the support of regulators during this test phase. Based on the information gathered, the supervisory authority can (legally) adopt legal requirements for the respective product or service that reconcile the interests of both service providers and investors.
The United Arab Emirates, with its two financial free zones Abu Dhabi Global Market (ADGM) and Dubai International Financial Center (DIFC) and Singapore (Monetary Authority of Singapore – MAS) provide such a regulatory “sandbox”. The signed “Cooperation Agreement” between the Abu Dhabi Global Market (ADGM) and the Monetary Authority of Singapore (MAS) for the promotion of FinTech innovations and cross-border activities from 2018 shows just how much the two financial centers – Singapore and the United States Arab Emirates – to bet on the new technologies and to become the global leader in financial technology. This brings immense opportunities for start-ups from the fintech industry.
As an innovative law firm, we have addressed this trend in the financial sector at an early stage and provide start-ups and established companies in the fintech industry with the necessary assistance in the successful introduction of new financial technologies.
- Advising and assisting with the application and procedures for the approval of the developed technologies within regulatory “sandbox” in Abu Dhabi, Dubai and Singapore.
- Advice on Initial Coin Offerings (ICO), blockchain and structures for cryptocurrencies.
- Advice on regulatory and other legal requirements in the so-called “FinTech Hubs”.
- Legal support and communication with regulators.
- Preparation and review of all contracts and implementation of companies in the “FinTech Hubs”.