Third-Country Regime and Equivalence: FinTechs

Abstract

While equivalence decisions are a well-known feature of EU/EEA financial regulation, EU/EEA regulatory law has not yet introduced FinTech-specific equivalence assessments. This article develops a new policy approach that allows to build on the tied-agent concept and extends it to third-country FinTechs in accordance with equivalence principles. This new regime is built on the premise that, within its scope, third-country FinTechs should only be granted market access to an EU/EEA Member State if the advantages of granting such access are so great that they can compensate for the possible risks of reduced direct access by the competent supervisory authorities in the EU/EEA to third-country FinTechs. This requires a substantial interest in the promotion of the corresponding technical solution of the third-country FinTech in connection with the provision of regulated services in an EU/EEA Member State, provided that the European Commission has adopted an equivalence decision with regard to the FinTech’s home country, the FinTech acts as a tied agent of an EU/EEA-based investment firm or credit institution, and the supervisory authority competent for the supervision of such investment firm or credit institution has entered into a cooperation agreement with the competent supervisory authority of the FinTech’s home country.