Ministry to experiment with fintech regulation
Financial Services Minister Tara Rivers (file photo)
(CNS): The financial services minister has revealed plans by government to experiment with regulation and compliance for the growing fintech sector, in what she described as “an adaptable, technology-neutral, regulatory sandbox-type framework” that will allow CIMA and stakeholders to work out the best solution to safely oversee this area of offshore business. Tara Rivers said new technologies are reshaping the financial environment and Cayman needs to find a way to attract and regulate new technologies like cryptocurrencies that bring new threats as well as new business.
“They allow for capital and value to be transferred outside of traditional channels; they allow for anonymity and a new level of complexity which most do not yet understand,” Rivers said in a statement to the Legislative Assembly this week, revealing government’s plans to begin legislating and shaping a regulatory environment which could see this developing side of the financial services sector support the existing successful offshore industry here.
“We should embrace change, but we should do so in a responsible and prudent manner while continuing to embrace strict global anti-money laundering and terrorist financing standards,” the minister told her colleagues.
She said government had agreed with her ministry to adopt a regulatory sandbox which will allow for sufficient oversight and monitoring of new and existing, innovative and pioneering companies and ensure they are compliant, fair and transparent.
In computer science, a sandbox is a closed testing environment designed for experimenting safely with web or software projects. But in the digital economy arena a regulatory sandbox is a testing ground for new business models that are not protected by existing regulation. The sandbox is to adapt compliance in a way that doesn’t smother the sector with rules, but retains necessary protection.
“This versatile approach would allow a regulator to observe new ideas, understand them, shape them if appropriate, and generate insights to feed back into mainstream regulatory activities,” Rivers stated. “It will encourage, foster and incubate legitimate activities while adapting our laws and regulations on an ongoing basis as the need arises. The ministry is collaboratively engaged in the process of resolving the necessary legislative changes to implement this regulatory sandbox.”
Government, she added, is open to and exploring, how regulated digital ID systems could help revolutionise and streamline AML compliance locally and globally.
Describing Cayman Islands as a prime jurisdiction for technology companies supported by the intellectual property regime, which includes anti-patent troll provisions, she said her ministry aims to create a well-defined business environment that balances risk control and legislative flexibility to attract legitimate technology-based enterprises to our shores.
Minister River’s LA Statement on Digital Assets Legislative Framework, 14 Nov 2018
Category: Business, Financial Services
adaptable, technology-neutral, regulatory sandbox-type framework. Lets actually look at this statement. Adaptable. Everything can be adaptable. Even a turtle will learn to eat different food if it has to. Okay, so what exactly is technology neutral. If she’s selling for example block chain or Bit coin, same diff. Is she saying this has nothing to do with technology? It has everything to do with technology. You cannot have block chains without technology. That’s like trying to have money without paper or coin. (can’t say bank computers, cause that’s technology)
Regulatory sandbox-type framework. Well, that last part cannot even be nailed down. Everything has regulations, we all live in a sand box, and the frame work for that is our lives and our jobs. So that’s just extra fluff for the cake. Simply saying you must show up to work on time every day is regulatory.
But instead of parroting what the consultant is selling. Make up your own fluff. Or at least break it down, like you understand it. I could read a paper on brain surgery. Have the ability to parrot what I have read. So I sound like i know how to do brain surgery and what the paper was talking about. But should I really be prying open people’s heads and say “alright, lets have a go at this”.
If I really wanted to sound like I knew what was being thrown at me. I would say it in my own words. Even if they are not as eloquent as the original paper.
So basically this article sums up what most readers have already figured out. She has no idea what she was pitched. In the slightest.
Perhaps the statement was geared towards tech-savy players who know what technology neutral means (meaning it’s not limited to distributed ledger assets or assets specific to a technology), or regulatory sandbox means (meaning its a sandbox that is geared towards regulation, not promotion or publicity).
Just sayin’
A “sandbox” in IT is usually an application that isolates another application that is being experimented upon in case the said application is corrupted in some manner or turns out not to work as expected.
She is stating this concept in the context of regulations being applied to IT.
It was easier just stating that on this forum than your little tango…lonely much?
A good point and compassionate too, but I don’t think you’re right. Ministers flit from one subject to the next so fast that they don’t have time to grasp their detail. They have to rely on civil servants; who, knowing as much about the subject as your average joe, seek refuge in jargon and management-speak which they believe makes them sound convincingly tekky and up to date but which in reality is infuriatingly obscure and confusing and therefore ends up being more a hindrance than a help to their minister.
This minister should have ripped it up and told them to try again.
Just fluff. If Cayman is serious then CIMA and CIG should allocate $$$’s to develop this. As usual they think passing a few laws will attract business and then they leave it to the prrivate sector. Case in point what happened to the Limited Liability Partnership law passed during Hon Panton’s tenure.
This needs answering.
All the financial industry asks is that the LA enacts legislation allowing structures to be established and entities formed which meet the needs of clients around the world and keep Cayman ahead of its competitors.
Over the past eight years or so, and with the help of the Financial Services Legislative Committee, trusts, companies and exempted limited partnerships laws have been modernised and new legislation has been enacted introducing limited liability companies, foundations, and, as you rightly point out, limited liability partnerships.
Contrary to what you say, “passing a few laws” DOES attract business and additional revenue: look at the vast number of exempted limited partnerships formed since one of those very laws that you disparage was passed in 1991; and now, due to another such law, LLCs, which were previously formed elsewhere, are being established here instead.
All those steps have been taken by Government at the request of the private sector. To answer your point, it is not Government’s role to develop them further; it’s the private sector’s. All Government has to do is create the tools so that the industry can use them. The take-up on LLPs might not have been particularly dramatic, but they’re in the toolbox when previously they weren’t. The way the industry moves, they may be needed one day; and when they are, Cayman will be able to provide them.
She didn’t say “let’s pass a law enabling Limited liability companies.” One cannot tell what she is talking about or who put her on to it. Bit coin exchanges, block chain technology, high speed internet, merchant power plants, rocket ships, sub prime lending? Who knows?
Downs
Just another innovative day in paradise
tara again wins the prize for best waffle & management speak nonsense.
well done.
Blockchain can be applied to all kinds of business lines and commodities beyond fad darkweb currencies. Anything where tracking the provenance of a commodity adds value or ensures quality control. Someone will have to slowly explain how it works and how it will change the future to the Minister, before her “sandbox regulatory experiment” is unleashed to the LA for blind assent.
Assuming that’s what she is talking about.
“an adaptable, technology-neutral, regulatory sandbox-type framework”.
Nothing new here. My cat has had one of these for years.
More corporate gibberish in an attempt to ‘look smart’. Truth is, it doesn’t work anymore. Just stick with accurate concise descriptions and stop trying to deceive the public like they are morons.
There are websites by the way that will actually generate this corporate gibberish.
http://www.andrewdavidson.com/gibberish/
Looks like Tara has learned some new lingo and buzzwords in addition to filling her closets on her junkets.
Now, we’ll wait and see if she can handle the $hitstorm when and if some of these trendy new ideas are implemented. My guess is you won’t see her for dust if this all goes to $hit down the road.
It’s coming, moron. We can either get with the times or be left behind.
You fall for anything. What is coming? Christmas. For heaven’s sake, relax.
These trendy new ideas are already here.
The EU and OECD are already in a tailspin over beneficial ownership records. I guess this new move will throw them in a full bloom cat. 5 hurricane. They are not “sandbox friendly- let us play together” kind of people.” As you know their motto for the colonies is ” do as we say and not as we do”
Oh my, technology- neutral regulatory sandbox type framework?? Guess I will have to get my educated children to explain all of this to me.
Since you gave me a “thumbs down” smarty pants would you please explain it to me then? Waiting with bated breath.