In a decision expected to be widely noted by the startup community, the Ontario Securities Commission (“OSC”) approved the first initial token offering (“ITO”, also known as an initial coin offering or “ICO”) in Ontario. The decision released October 17, 2017 comes in the wake of increasing innovation and market activity within the fintech and cryptocurrency space in Canada.… Continue Reading
The Transatlantic Policy Working Group (“TPWG”), an organization set up by Innovate Finance and some of its partners and which is dedicated to Fintech policy discussion between the United States and United Kingdom, recently published a report entitled The Future of RegTech for Regulators (the “TPWG Report”). RegTech refers to the use of technology to facilitate compliance with regulatory requirements via improved data analytics, reporting, and information governance (please see our previous blog posts on RegTech here and here). These technologies have the potential to help business increase accuracy of their reporting and compliance programs … Continue Reading
On September 6, 2017, the British Columbia Securities Commission (“BCSC”) announced the first registration of an investment fund manager in Canada dedicated solely to cryptocurrency investments. First Block Capital Inc. (“First Block Capital”), which will operate a bitcoin investment fund, was registered as an investment fund manager and exempt market dealer. The company is also registered in Ontario, with the BCSC being its principal regulator.… Continue Reading
On August 24, 2017, Staff of the Canadian Security Administrators (the “CSA”) released CSA Staff Notice 46-307 Cryptocurrency Offerings (the “CSA Notice”), published in all Canadian jurisdictions except Saskatchewan.
The CSA Notice addresses a number of considerations of relevance to Fintechs, investors and their advisors, including the potential applicability of Canadian securities laws to initial coin offerings (“ICOs”) and initial token offerings (“ITOs”), cryptocurrency exchanges and cryptocurrency investment funds. It follows a press release issued by the Ontario Securities Commission earlier this year confirming that Ontario securities laws may apply to … Continue Reading
In March 2017, the European Commission (EC) issued a public consultation document on Fintech. Cloud computing is a major area covered by the EC request for comment and requires delicate balancing between innovation and risk minimization. On one hand, cloud is an easily scalable and cost effective way for financial institutions to manage their data storage and processing. However, cloud also presents major banks with increased cybersecurity and compliance risk. The topic of cloud is particularly relevant because certain Fintech enterprises may not be subject to the same regulatory constraints as major financial institutions.
The European Banking Authority (EBA) published … Continue Reading
In an effort to help regulated entities and interested parties evaluate whether the use of distributed ledger technology (DLT) would enable them to meet their regulatory obligations and to fast-track its discussions with stakeholders, the Australian Securities and Investments Commission (ASIC) has released an information sheet, “Evaluating Distributed Ledger Technology” (INFO 219), offering guidance for entities licensed by ASIC and start-ups that are “considering operating market infrastructure, or providing financial or consumer credit services” using DLT or blockchain.
Noting the “intense interest in DLT” ASIC is seeing from a wide range of financial services market players in recent … Continue Reading
On March 13, 2017, the Council of the Corporation Law Section of the Delaware State Bar Association released proposed legislation that would amend Title 8 of Delaware’s General Corporation Law (DGCL) to permit Delaware corporations to use blockchain technology to create and manage corporate records.
Currently, stock ledgers in Delaware corporations are typically maintained by a corporate secretary or transfer agent, who manually updates the ledger upon receipt of notification of a transfer of share ownership. The proposed amendments would permit Delaware corporations to use electronic networks or databases, such as distributed ledgers, to administer corporate records and track share … Continue Reading
The Ontario Securities Commission (OSC) has issued a press release advising stakeholders that Ontario securities law may apply to any use of distributed ledger technologies (DLT), such as blockchain, as part of financial products or service offerings.
The OSC emphasized that it is keen to support the innovative potential of DLT because, among other things, DLT has the potential to increase transparency and efficiencies in the capital markets. However, because of DLT’s novelty, the OSC encourages business to speak to the OSC about securities law and investor protection requirements that may apply.
The OSC has cautioned that “[p]roducts or other … Continue Reading
Le 23 février 2017, les Autorités canadiennes en valeurs mobilières (ACVM) ont annoncé le lancement d’un bac à sable réglementaire. L’objectif du bac à sable réglementaire est d’appuyer les Fintech en leur permettant de faire une demande à l’organisme de réglementation compétent afin de bénéficier d’une approche plus adaptée en matière de réglementation. Cette approche doit faciliter l’utilisation d’applications, de produits et de services novateurs chez les entreprises au Canada, tout en protégeant adéquatement les investisseurs.… Continue Reading
On February 23, 2017, the Canadian Securities Administrators (CSA) announced the launch of a regulatory sandbox. A regulatory sandbox aims at supporting Fintech businesses by allowing them to apply to the regulator to benefit from a more tailored approach to regulation that balances the need to facilitate the use of innovative products, services and applications all across Canada with appropriate investor protection.
As a result, the CSA will assess the merits of each business model, on a case-by-case basis, and allow innovative businesses to register or grant them relief from certain requirements to permit them to test their products and … Continue Reading
With relatively little fanfare, on January 17, 2017, the Canadian Radio-television and Telecommunications Commission (CRTC) issued a regulatory policy imposing new direct regulatory obligations on Telecommunications Service Providers (TSPs) in Canada.
Historically, the CRTC’s direct regulatory powers have applied to “Canadian carriers”, who are the owners (or operators) of the physical telecommunications infrastructure in Canada.
The CRTC’s authority over non-carrier TSPs, who do not own that infrastructure was, until recently, more tenuous. In the absence of a direct statutory authority to impose conditions on non-carrier TSPs, the CRTC instead required Canadian carriers to impose certain requirements (such as the obligation … Continue Reading
This year was a tremendously active year for Fintech in Canada and internationally, and 2017 promises to be even more so. In the Fall of 2016, we co-authored a comprehensive report together with the Digital Finance Institute, “FinTech in Canada: British Columbia Edition” on the state of the Canadian Fintech ecosystem, highlighting a number of the then-current industry and regulatory developments. As we head into 2017, we provide a brief summary of some of last year’s Fintech regulatory developments in Canada and globally, and some developments to watch for in the upcoming year.… Continue Reading
On December 6, 2016, Bill 47 – Protecting Rewards Points Act (the “Act”), amending Ontario’s Consumer Protection Act, 2002 (the “CPA”), received Royal Assent. The Act was first introduced on October 20 as a private member’s bill.
The primary effect – and stated purpose – of the Act is to prohibit the expiry of rewards points under consumer agreement due to the passage of time. Any provision to the contrary in any consumer agreement will be rendered void, with retroactive effect to October 1, 2016, such that all points purporting to expire after October 1, 2016, will need to be … Continue Reading
In December 2015, over 50 WTO members, including Canada, gathered at the Nairobi Ministerial Conference, and agreed to the expansion of the Information Technology Agreement (ITA), a WTO agreement that aims to eliminate tariffs on IT products. The ITA was originally concluded by 29 participants in 1996. It now has over 82 participants, representing around 97 per cent of world trade in IT products.
On July 1, 2016, the expanded ITA finally came into effect, eliminating tariffs on 201 tech and information-related products valued at over $1.3 trillion per year. An expansion of the agreement was necessary given recent … Continue Reading
On June 1st, 2016, the new Regulation respecting contracting by public bodies in the field of information technologies (the “Regulation”), which now allows Quebec public bodies greater flexibility to negotiate complex Information Technologies (“IT”) service agreements, came into force . It supplements the Act respecting contracting by public bodies (the “Act” which establishes the legal framework for contracting with public bodies in Québec, including among others the Québec government and its departments, certain Crown corporations, universities, hospitals, towns and municipalities. It applies to contracts and sub-contracts of a value of $1M or above.
The coming into force … Continue Reading
In response to the U.S. Department of the Treasury’s (“Treasury”) July 20, 2015 request for information on online marketplace lending (the “RFI”), Treasury issued its white paper on marketplace lending “Opportunities and Challenges in Online Marketplace Lending” (the “White Paper”) on May 10, 2016. The White Paper outlines the risks and potential of this emerging form of credit, makes specific policy recommendations and identifies certain trends for future monitoring.
The White Paper defines marketplace lending as financial services that use “investment capital and data-driven online platforms to lend either directly or indirectly … Continue Reading
The Competition Bureau announced on May 19, 2016 that it will launch a market study focused on how innovation in the fintech sector is impacting consumers and businesses, with the results intended to be published in the spring of 2017, seeking to determine whether there is a need for “regulatory reform to promote greater competition while maintaining consumer confidence in the sector.”
The announcement cites a report indicating that Canada appears to be lagging other countries in adoption of fintech as one of the reasons for deciding to study the financial services industry.… Continue Reading
We recently attended the 18th Biennial National Conference: New Developments in Communications Law and Policy, a national symposium of the Law Society of Upper Canada and the Entertainment Media and Communications Law section of the Canadian Bar Association. This conference is always a stimulating and fascinating opportunity to share thoughts with colleagues in the Canadian communications sector. This year’s event was no exception.… Continue Reading
On March 31, 2016, the Competition Bureau (Bureau) released revised Intellectual Property Enforcement Guidelines (IPEGs). These IPEGs reflect incremental changes to the draft version released for consultation last year. Most notably the new IPEGs provide further guidance on (i) pharmaceutical patent litigation settlements, (ii) product switching (also known as “product hopping”), (iii) collaborative standard setting and standard essential patents, and (iv) patent assertion entities.… Continue Reading
On March 24, 2016, the Canadian Radio-television and Telecommunications Commission (“CRTC”) signed a memorandum of understanding (“MOU”) with the United States Federal Trade Commission. This MOU is an effort by Canada and the United States to work together on anti-spam enforcement measures, and expressly refers to unsolicited telecommunications, unsolicited commercial electronic messages (spam), and other unlawful electronic threats (e.g., malware and botnets).… Continue Reading
On February 10, 2016, Lynne Perrault and Dana-Lynn Wood of the CRTC provided the latest in what is becoming a series of CASL briefings, which the presenters described as part of an “on-going dialogue” with industry. The CRTC now has a year and a half of enforcement experience under its belt for the Commercial Electronic Messages (CEMs) provisions of CASL, so this presentation focused on patterns and issues that have emerged in that period, and some guidance in response to those issues. However, the presenters took some pains to note that the guidance offered was not intended to be prescriptive … Continue Reading
Throughout 2015, the Online Trust Alliance (“OTA”) (a U.S.-based non-profit organization which originated in 2005 as an informal industry working group drawn largely from the technology and marketing communities) has been working on a so-called “Trust Framework” for the Internet of Things. An earlier post covered the release of the first discussion draft in August.
Although this draft is described as “pre-release”, the OTA’s consultation process for the framework appears to be over now. … Continue Reading
We recently had the pleasure of attending the Money20/20 fintech conference in Las Vegas. It was an immersive and incredibly informative event, featuring speakers and thought leaders from many of the major U.S. and Canadian financial institutions, fintech innovators, major retailers, e-commerce and social media platforms and investors. Money20/20 is described as the largest global event focused on payments and financial services innovation for connected commerce at the intersection of mobile, retail, marketing services, data and technology.… Continue Reading
European Union member states have a new net neutrality framework that will allow service providers to offer specialized services – such as improved internet quality for IPTV – where the upgrades do not impact general Internet quality for other end-users.
On October 27 the European Parliament passed a new electronic communications Regulation, with a view to protecting net neutrality. Broadly speaking, net neutrality is the principle that all Internet traffic should be treated equally regardless of content or volume. The European Parliament adopted a Regulation laying down measures concerning open access. The new Regulation also amends Directive 2002/22/EC on universal … Continue Reading