Plans to create pan-EU fintech hub

The European Commission has unveiled plans to make the EU a global hub for technology-enabled innovation in financial services (fintech), including new rules designed to help crowdfunding platforms grow across the EU's single market

The Commission has published an action plan with the aim of enabling the financial sector to make use of the rapid advances in new technologies, such as blockchain, artificial intelligence and cloud services.

In addition, the Commission is proposing a pan-European label for platforms, so that a platform licensed in one country can operate across the EU.

The action plan, which has 23 suggested steps, is part of the Commission's efforts to create a digital single market.

Proposals include creating an EU fintech laboratory where European and national authorities will engage with tech providers in a neutral, non-commercial space, in addition to the EU blockchain observatory and forum already announced.

The Commission says it will consult on how best to promote the digitisation of information published by listed companies in Europe, including by using innovative technologies to interconnect national databases. This will give investors far easier access to key information to inform their investment decisions.

It will also run workshops to improve information-sharing when it comes to cybersecurity and a series of ‘regulatory sandboxes’ to develop best practice in the fintech area.

The Commission says crowdfunding in the EU is currently underdeveloped as compared to other major world economies, and the EU market is fragmented. One of the biggest hurdles is the lack of common rules across the EU. This considerably raises compliance and operational costs and prevents crowdfunding platforms from expanding across borders.

The new proposals are intended to make it easier for these platforms to offer their services EU-wide and improve access to this innovative form of finance for businesses in need of funding. Once adopted by the European Parliament and the Council, the proposed regulation will allow platforms to apply for an EU label based on a single set of rules. This will enable them to offer their services across the EU. Investors on crowdfunding platforms will be protected by clear rules on information disclosures, rules on governance and risk management and a coherent approach to supervision.

Valdis Dombrovskis, vice-president responsible for financial stability, financial services and capital markets union, said: ‘To compete globally, Europe's innovative companies need access to capital, space to experiment and scale to grow. This is the premise for our FinTech action plan.

‘An EU crowdfunding licence would help crowdfunding platforms scale up in Europe. It will help them match investors and companies from all over the EU, giving more opportunities for firms and entrepreneurs to pitch their ideas to a wider base of funders.’

The EU fintech action plan is here.

Report by Pat Sweet

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