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A Guide to Financial Regulation for Fintech Entrepreneurs

Book Description

The Fintech Entrepreneur’s Guide to Regulation and Regulatory Strategy

Fintech has been growing dramatically over the last few years, and it is now an important sector in its own right. This means that Fintech companies, who could so far often rely on a comparatively lenient regulatory regime, will now have to give serious thoughts on compliance with applicable regulatory rules. 

Operating in a highly regulated environment is tedious, but not all bad—companies that can play the regulatory game well have a strategic advantage, especially with regard to time-to-market and scaling. Nothing spells missed opportunity like a competitor building market share with a copycat product whilst you are still waiting for your license!

Written for professionals, this book helps anyone whose job has to do with formulating or executing a Fintech startup strategy or whose job touches financial services regulation, or anyone who simply wants an easy- to-read introduction to financial services and their regulation.   

  • Describes the purpose of and principle behind modern financial services regulation
  • Explains how to include regulation into a startup’s strategic planning to optimize time-to-market and scaling
  • Gives an overview of the entire financial services space, and which regulations apply where
  • Gives detailed references to 20 key regulations in the EU regulatory system, including PSD, GDPR, CRD, AMLD, MiFID, UCITSD, AIFMD

The first part introduces financial services regulation, its purpose, how it is created (especially in the EU and in the US), and it develops a framework for including regulations into the strategic planning of a company. It also gives a rundown of the current financial services space—players and products—and its key regulations. The second part describes a regulatory system in more detail. The system chosen is the EU because it is more consistent and unified than the US system where a lot of the regulation still is created at the state-level. However, as most financial regulation nowadays is determined at the global level, the principles found in EU regulation will be by and large also be found the US and other systems.

Table of Contents

  1. Cover
  2. Title Page
  3. About the Book
  4. Acknowledgments
  5. About the Author
  6. PART I: Fintech Regulation and Strategy
    1. CHAPTER 1: Regulatory Strategy for Fintech Companies
      1. 1.1 Regulation
      2. 1.2 A Regulatory Strategy Framework
    2. CHAPTER 2: Overview of Financial Services Regulation
      1. 2.1 Types of Regulation
      2. 2.2 Strands of Regulation
    3. CHAPTER 3: Regulation in Practice
      1. 3.1 Sources of Regulation
      2. 3.2 Regulatory Models
      3. 3.3 Fintech Regulation
    4. CHAPTER 4: The Financial Services Industry
      1. 4.1 Classic and Corporate Banking
      2. 4.2 Specialised Lending
      3. 4.3 Investment Banking and Advisory
      4. 4.4 Payments
      5. 4.5 Asset Management
      6. 4.6 Brokerage and Transaction Services
      7. 4.7 Insurance
      8. 4.8 Others
    5. CHAPTER 5: Retail Financial Services Products
      1. 5.1 Payments and Deposits
      2. 5.2 Retail and SME/Mid‐market Lending and Credit
      3. 5.3 Retail Investments
      4. 5.4 Other Products
      5. 5.5 Insurance
      6. 5.6 Financial Advisory
    6. CHAPTER 6: Wholesale Financial Services Products
      1. 6.1 Wholesale Credit
      2. 6.2 Wholesale and Specialist Asset Management
      3. 6.3 Primary Markets and Origination
      4. 6.4 Sales, Trading, Brokerage, and Exchanges
      5. 6.5 Settlement, Custody, and Ancillary Services
      6. 6.6 Advisory and Research
  7. PART II: Selected Regulations in Detail
    1. SHEET 1: Alternative Investment Fund Manager Directive
      1. 1.1 General
      2. 1.2 Authorisation to Market
      3. 1.3 Interaction with Regulators
    2. SHEET 2: Anti Money Laundering Directive
      1. 2.1 Definition and Scope
      2. 2.2 Implementation
      3. 2.3 Obligations of All Companies
      4. 2.4 Financial Intelligence Units and Cooperation
      5. 2.5 Information Requirements on Transfers of Funds
    3. SHEET 3: Bank Recovery and Resolution Directive
      1. 3.1 Definition and Scope
      2. 3.2 Preparation
      3. 3.3 Execution
      4. 3.4 Ancillary Regulations
    4. SHEET 4: Cross‐Border Payments Regulation
      1. 4.1 Definition and Scope
    5. SHEET 5: Consumer Contracts Directive
      1. 5.1 Definition and Scope
    6. SHEET 6: Consumer Credit Directive
      1. 6.1 Definition and Scope
      2. 6.2 Information to Be Provided Before Concluding an Agreement
      3. 6.3 Credit Assessment and Credit Databases
      4. 6.4 Information to Be Provided with Agreements
      5. 6.5 Consumer Rights Under Credit Agreements
      6. 6.6 Annual Percentage Rate of Charge (APR)
    7. SHEET 7: Capital Requirements Directives
      1. 7.1 General Background on Basel and CRD
      2. 7.3 Capital Requirements Overview
      3. 7.4 Capital Requirements for Credit Risk
      4. 7.5 Capital Requirements for Non‐credit Risk
      5. 7.6 Leverage Ratio
      6. 7.7 Liquidity Risk
      7. 7.8 Pillar 3 Disclosure
      8. 7.9 Other
    8. SHEET 8: Deposit Guarantee Scheme Directive
      1. 8.1 Definition and Scope
    9. SHEET 9: Distance Marketing in Financial Services Directive
      1. 9.1 Definition and Scope
      2. 9.2 Information Requirements
      3. 9.3 Withdrawal and Renewal
      4. 9.4 Other
    10. SHEET 10: European MarketInfrastructure Regulation
      1. 10.1 Definition and Scope
      2. 10.2 Central Counterparties
      3. 10.3 Trade Repositories
    11. SHEET 11: Electronic Money Directive
      1. 11.1 Definition and Scope
    12. SHEET 12: General Data Protection Regulation
      1. 12.1 Definition and Scope
      2. 12.2 Definition of Data
      3. 12.3 Pre‐requisites of Data Collection—Purpose and Consent
      4. 12.4 Information Requirements
      5. 12.5 Rights of the Data Subject
      6. 12.6 Data Controller Requirements
      7. 12.7 Transfer to Third Countries
      8. 12.8 Role of Supervisors
      9. 12.9 Liability
      10. 12.10 Specific Situations
    13. SHEET 13: Market Abuse Regulation
      1. 13.1 Definition and Scope
      2. 13.2 Inside Information
      3. 13.3 Insider Dealing
      4. 13.4 Unlawful Disclosure
      5. 13.5 Market Manipulation
      6. 13.6 Requirements, Prohibitions, and Fines
      7. 13.7 Regulators
    14. SHEET 14: Mortgage Credit Directive
      1. 14.1 Definition and Scope
      2. 14.2 General Requirements
      3. 14.3 Credit Intermediaries and Appointed Representatives
      4. 14.4 Pre‐contractual Requirements
      5. 14.5 Credit Assessment and Credit Databases
      6. 14.6 Foreign Currency and Variable Rate Loans
      7. 14.7 Arrears and Foreclosure
      8. 14.8 Other
    15. SHEET 15: Markets in Financial Instruments Directive
      1. 15.1 Definition and Scope
      2. 15.2 Authorisation and General Requirements
      3. 15.3 Investor Protection
      4. 15.4 Trading Venues
      5. 15.5 Data Reporting
    16. SHEET 16: Packaged Retail and Insurance‐based Investment Products Regulation
      1. 16.1 Definition and Scope
      2. 16.2 Form and Content
      3. 16.3 Provision
      4. 16.4 Monitoring, Invervention, Complaints, and Fines
      5. 16.5 Technical Provisions
    17. SHEET 17: Payments Services Directive
      1. 17.1 Definition and Scope
      2. 17.2 Players in the Payment System
      3. 17.3 Authorisation and Regulatory Requirements
      4. 17.4 Operational Requirements
      5. 17.5 Third‐party Access
      6. 17.6 Liability and Refunds
    18. SHEET 18: Rating Agencies Regulation
      1. 18.1 Definition
      2. 18.2 Scope
      3. 18.3 Registration and Equivalence
      4. 18.4 General Operational Requirements
      5. 18.5 Structured Finance Ratings
      6. 18.6 Unsolicited Ratings
      7. 18.7 Disclosure and Transparency
      8. 18.8 Role of EBA
    19. SHEET 19: Undertakings for Collective Investment in Transferable Securities Directive
      1. 19.1 Key Elements
      2. 19.2 Management Companies
      3. 19.3 Depositaries
      4. 19.4 Investment Policies
      5. 19.5 Investor Information
      6. 19.6 General Obligations of UCITS’
      7. 19.7 Cross‐border Distribution and Passporting of Funds
      8. 19.8 Regulators and Regulatory Powers
      9. 19.9 Other
    20. SHEET 20: Unfair Commercial Practices Directive
      1. 20.1 Definition and Scope
      2. 20.2 Misleading Practices
      3. 20.3 Aggressive Practices
      4. 20.4 Enforcement
  8. Appendix A: Important Definitions from European Legal Texts
  9. Appendix B: Abbreviations Used for Legal References
  10. Index
  11. End User License Agreement