The International Organisation of Securities Commissions (IOSCO) has released new research, which examines the evolution of fintech; and, in particular, its intersection with securities market regulation.
IOSCO is an international body that aims to connect the world’s securities regulators. Within the securities sector, it is recognized as a global standard setter. IOSCO works in close cooperation with the G20 and Financial Stability Board (FSB) on the global regulatory reform agenda. This recently published report is the result of a collaborative effort amongst various IOSCO committees, including members of the Committee on Emerging Risks (CER), the Growth and Emerging Markets Committee (GEMC) and the Affiliate Members Consultative Committee (AMCC).
The report examines the intersection of fintech with securities market regulation through a detailed analysis of a number of key applications for fintech. Specifically, for each fintech application covered in the report, the researchers have analysed the evolution and size of the market; the benefits & functionalities; the challenges & risks; and regulatory relevance & responses.
Currently, the fintech landscape can be divided into eight distinct categories; namely: security, blockchain, lending / crowdfunding, planning, trading & investments, insurance, payments, and data & analytics. Considering the research focus on the delivery of securities and capital market products and services through the application of fintech, the report covers four key areas, which are outlined below.
- Financing platforms, including peer-to-peer (P2P) lending & equity crowdfunding
- Retail trading & investment platforms, including robo-advisers, and social trading and investment platforms
- Institutional trading platforms, with a specific focus on innovation in bond trading platforms;
- Distributed ledger technologies (DLT), including application of blockchain & shared ledgers within the securities markets.
Among other things, the report concludes that the emergence of new fintech players could give rise to considerable regulatory challenges and recommends international cooperation as a way to combat these.
To read the full IOSCO fintech report, click here.