FCA-CFTC cooperation: Is there a sandbox in the US’s future?
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FCA-CFTC cooperation: Is there a sandbox in the US’s future?

Euromoney looks at the approach taken by regulators to encouraging fintech innovation in North America, after the announcement of a formal information exchange arrangement between the UK’s Financial Conduct Authority (FCA) and the US Commodity Futures Trading Commission (CFTC).

The cooperation between the FCA and the CFTC will cover information sharing, referrals and learning from proofs of concept, trials or innovation competitions.

The CFTC and other US regulators have to date eschewed the UK model of establishing a regulatory sandbox, an approach that has been replicated in many other parts of the world.

A proposal for a national regulatory sandbox regime in the US died with the rejection of the Financial Services Innovation Act of 2016 and there does not appear to be the necessary support for reviving that piece of legislation.


Tara Waters,

However, Ashurst technology lawyer Tara Waters observes that this does not mean the CFTC has not had similar engagement with financial technology companies on a case-by-case basis.

“The CFTC has acknowledged that the FCA has developed the gold standard for engagement with fintech businesses, though, so it remains to be seen whether the CFTC may seek to align its approach to that of the FCA once it has more access to the latter’s learnings,” she says.

“It is also important to note that there are other regulators in the US which are important to the fintech conversation, including the Securities and Exchange Commission (SEC) at the federal level, as well as state regulators.”

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