International collaboration of law experts from three continents towards global FinTech and RegTech research
To support Hong Kong's aspirations of becoming a financial technology (FinTech) hub, Professor Douglas Arner from the Faculty of Law at the University of Hong Kong (HKU) has joined forces with law professors from Europe and Australia to cooperate in researching the law and regulation of FinTech.
Professor Arner will partner with Professor Dirk Zetzsche (ADA Chair in Financial Law/Inclusive Finance) at the University of Luxembourg and Professor Ross Buckley at the University of New South Wales (UNSW) in Sydney, Australia to form an international law team based in three continents and three major global financial centres.
The team, alongside other renowned researchers and FinTech regulators, will present their latest work at the third annual FinTech Conference organised by the University of Luxembourg's Research Unit in Law on 9 October 2017.
Since embarking on their collaboration early this year, the three FinTech and regulatory technology (RegTech) experts, in cooperation with HKU PhD candidate Janos Barberis, founder of the SuperCharger FinTech Accelerator headquartered in Hong Kong, have produced four draft papers on the impact of big data on the financial system¹, the challenges of regulating FinTech², a theory of smart regulation that considers different regulatory tools and their role in enabling or restricting innovation³ as well as an analysis of liability risk and its impact on the use and set-up of blockchain⁴. Together, their works have been downloaded more than 27,000 times on the Social Science Research Network (SSRN) and they have published over 30 scholarly articles and book chapters in the past year.
The financial centres of Luxembourg, Sydney and Hong Kong have been responding to rapid technological innovation and disruption recently. In Hong Kong, for example, the 2017 government's Policy Address pledged to establish the city as a hub for FinTech application and setting of standards for cutting-edge FinTech. Commenting on the cooperation, Professor Zetzsche (currently in the top 10% of the SSRN's top 3,000 law authors globally) said: "Smartly regulating financial innovation requires all stakeholders - the financial sector, start-ups, regulators and academics - to understand technology and law. Only global research is able to grasp the true speed and depth of these developments." He was supported in his assessment by Professor Arner (currently 7th of the SSRN's top 3,000 law authors globally): "Financial technology, through big data, artificial intelligence, regulatory technology, crowdfunding, smart contracts, etc. changes the fundamentals of our regulatory system. Only financial centres that adjust their regulatory environment will be able to maintain and develop further their relevance." The potential for FinTech is substantial, added Professor Buckley (9th of the SSRN's top 3,000 law authors globally): "FinTech can tackle issues of transaction, compliance and risk management costs. But these benefits can come at a price - exchanging human errors for risks stemming from information technology. A smart, analytical approach is needed and this is where academic research can make a fundamental difference."
The team's global FinTech and RegTech research cooperation is supported by three funding bodies: Luxembourg's National Research Fund contributed to an Intermobility Programme "Smart Regulation - Towards a New Law for FinTech", the Australian Research Council funding of the project "Regulating a Revolution: A New Regulatory Model for Digital Finance" and the Hong Kong Research Grants Council Theme-based Research Scheme providing financial support for "Enhancing Hong Kong's Future as a Leading International Financial Centre". The FNR's Intermobility Programme allowed Professor Zetzsche to spend three months at UNSW Sydney, where the cooperation was formalised.
¹ See Zetzsche, Buckley, Arner, Barberis, "From FinTech to TechFin: The Regulatory Challenges of Data-Driven Finance," available online https://ssrn.com/abstract=2959925, forthcoming New York University Journal of Law & Business (2018).
² Arner, Zetzsche, Buckley, Barberis, "FinTech and RegTech: Enabling Innovation while Preserving Financial Stability", forthcoming Georgetown Journal of International Affairs (2018).
³ Zetzsche, Buckley, Arner, Barberis, "Regulating a Revolution: From Regulatory Sandboxes to Smart Regulation", available online https://ssrn.com/abstract=3018534.
⁴ Zetzsche, Buckley, Arner, "The Distributed liability of Distributed Ledgers: Legal Risks of Blockchain", available online https://ssrn.com/abstract=3018214.
Ms Rhea Leung, Communications and Public Affairs Office, The University of Hong Kong (Tel: +852 2857 8555; Email: email@example.com; Website: www.hku.hk )
Ms Laura Bianchi, Communications Department, University of Luxembourg (Tel +352 46 66 44 9551;
Ms Clare Morgan, Media Office, UNSW SYDNEY (Tel +61 (2) 9385 8920; Email: firstname.lastname@example.org; Website: law.unsw.edu.au )
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