19 July 2019
The European Banking Authority (EBA) published today the findings of its analysis on the regulatory framework applicable to FinTech firms when accessing the market. The Report illustrates the developments on the regulatory perimeter across the EU, the regulatory status of FinTech firms, and the approaches followed by competent authorities when granting authorisation for banking and payment services.
The national regulatory status of FinTech firms with innovative business models or delivery mechanisms shows two developments: (a) the shift from non-regulated to regulated activities – notably payment initiation services and account information services now being subject to PSD2; and (b) the ancillary/non-financial nature of the services provided by FinTech firms not subject to any regulatory regime, with the exception of crowdfunding and to some extent activities related to crypto-assets. The EBA findings show few national legislative developments that could potentially create an EU unlevelled playing field. On crowdfunding, the EBA takes note of the Commission's Proposal for Regulation on crowdfunding service operators. On crypto-asset related activities, the Report refers to the EBA January Report on crypto-assets and the follow-up actions.
As to authorisation approaches, the EBA found that proportionality and flexibility principles are applied in the same way by competent authorities irrespective of whether the applicant presents a traditional or innovative business model and/or delivery mechanism. In the context of PSD2, the EBA's monitoring will observe whether such principles are used to fast track applicants. The EBA will also carry out additional monitoring with a view to better assessing the specificities of the national special regimes allowing granting authorisation as a credit institution with a lower capital of at least EUR 1 million and their application to FinTech applicants.
The Report delivers on one of the action points of the European Commission's FinTech Action Plan published in March 2018, which invited the European Supervisory Authorities (ESAs) ‘to map current authorising and licensing approaches for innovative FinTech business models'. In particular, the Commission asked the ESAs to explore how proportionality and flexibility in the financial services legislation are applied by national authorities. The Report delivers also on the EBA's FinTech Road map of March 2018, which in line with the Commission's FinTech Action Plan, identified the monitoring of the regulatory perimeter, including the assessment of current authorisation and licensing approaches to FinTech firms, as one of its priorities for 2018/2019.