Fintech
Paul G. Cellupica, Division of Investment Management Deputy Director and Chief Counsel to Conclude Tenure at SEC
Washington, D.C.–(Newsfile Corp. – January 7, 2021) – The Securities and Exchange Commission today announced that Paul G. Cellupica, Deputy Director and Chief Counsel of the Division of Investment Management, will depart the agency later this month.
Mr. Cellupica rejoined the division as Deputy Director in November 2017, and became Chief Counsel in June 2018. The division’s Office of the Chief Counsel, among other responsibilities, is responsible for responding to requests for legal and policy guidance, evaluating applications for exemptive relief, overseeing the division’s liaison with the Divisions of Enforcement and Examinations, technical assistance on legislation affecting investment advisers and funds, and engagement with international regulators on matters related to asset management.
“Paul’s expertise, deep knowledge of the asset management industry and commitment to the SEC have been invaluable assets as we navigated through much needed regulatory reforms and the market disruptions caused by the COVID-19 pandemic,” said Dalia Blass, Director of the Division of Investment Management. “His dedication to the work of the Commission and the division will have a lasting impact for years to come, and I thank him for his counsel to me and his many years of public service to the Commission.”
“I have been fortunate to have worked with such a talented group of colleagues, both in Investment Management and throughout the Commission, during such a productive and transformative period in investment management regulation,” Mr. Cellupica said. “I am grateful to Director Blass for the opportunity of a lifetime to return to the SEC, and I am extraordinarily proud of what the division and the Office of the Chief Counsel have been able to accomplish, working as a team, on behalf of investors.”
Under Mr. Cellupica’s leadership, the IM Office of the Chief Counsel provided critical contributions to a number of important policy areas and initiatives, including:
- COVID-19 Emergency Relief: Exemptive relief and guidance relied upon by nearly 700 investment companies, boards and advisers during the height of the pandemic, including relief from certain filing and delivery obligations, relief providing greater flexibility for funds in obtaining short-term funding, and relief permitting fund boards to satisfy in-person board meeting requirements through virtual meetings.
- Board Outreach Initiative: Outreach to fund boards and trustees regarding ways to recalibrate board oversight responsibilities, resulting in the first Commission rulemaking to address fund valuation in 50 years, and staff guidance permitting fund boards to receive quarterly representations from the fund CCO regarding compliance of affiliated transactions with exemptive rules, instead of the board itself determining compliance.
- Review of Staff Guidance: Initiation of a review of prior staff guidance, which has resulted so far in the withdrawal of over 70 staff letters and statements.
- Actively Managed Non-Transparent ETFs: Exemptive relief to permit novel forms of actively-managed ETFs, which operate without being subject to daily portfolio transparency.
- Proxy Voting: Commission guidance for investment advisers on exercise of their proxy voting responsibilities, including use of proxy advisory firms, in conjunction with a broader effort to modernize and enhance the proxy voting system.
- Innovative Exemptive Relief: Novel and valuable exemptive relief under the Investment Company Act of 1940, including relief to permit business development companies to offer multiple classes of shares; relief to permit fund boards to approve changes in sub-advisers at non-in-person meetings; expansion of multi-manager relief to affiliated sub-advisers; relief to permit a closed-end fund to pay advisory fees in fund shares as well as cash; and relief permitting a fund to use an alternative classification methodology in its liquidity risk management program.
- Creation of IM Liaison Office: Transformation of the division’s Enforcement Liaison Office into an expanded office that partners with both the Enforcement and Examination Divisions, and has supported numerous Enforcement investigations and initiatives to protect Main Street investors, including the Share Class Selection Disclosure Initiative which returned over $139 million to investors.
- Streamlining the Exemptive Applications Review Process: Changes to improve the process for review of exemptive applications, including adoption of a new rule that will create an expedited review process for exemptive applications that are substantially similar to recent precedent.
- Guidance on MiFID II: Extension of no-action relief issued in response to the European MiFID II rules on payment for research in Europe, including guidance regarding payments for research through Client Commission Arrangements (CCAs).
- International engagement: An enhanced voice for the Division in international regulatory discussions involving important policy issues such as ESG, the role of ETFs, fund liquidity, and fund investments in leveraged loans.
In addition, Mr. Cellupica had an important role in a number of significant rulemaking initiatives, including the adoption of rules permitting a “notice and access” method of delivering shareholder reports; revisions to the Volcker rule; development of a summary prospectus for variable insurance products; and the Commission’s interpretation regarding investment advisers’ fiduciary duty. He also helped lead the formulation of division policy on critical topics such as fund investments in cryptocurrency; investment adviser custody of non-traditional assets, including digital assets; cybersecurity; the transition from LIBOR; registered fund investments in private funds; closed-end fund governance; and investment company status issues involving operating companies.
Mr. Cellupica previously served in several leadership capacities in the Division of Investment Management and the Division of Enforcement from 1996 to 2004. Prior to rejoining the Division in November 2017, Mr. Cellupica was Managing Director and General Counsel for Securities Law at Teachers Insurance and Annuity Association of America (TIAA). Prior to that, he was Chief Counsel for the Americas at MetLife, Inc.
During his tenure at the SEC, Mr. Cellupica received the Martha Platt Award; the Law and Policy Award; the Chairman’s Award for Serving the Interests of Main Street Investors; and the Chairman’s Award for Excellence.
Mr. Cellupica received a B.A. magna cum laude from Harvard College and a J.D. cum laude from Harvard Law School. He served as a law clerk for Judge David Nelson of the U.S. Court of Appeals for the Sixth Circuit.
Upon Mr. Cellupica’s departure, Brent Fields will become acting Deputy Director and acting Chief Counsel of the Division of Investment Management.
Fintech
Fintech Latvia Association Releases Fintech Pulse 2024: A Guide to Latvia’s Growing Fintech Hub
The Fintech Latvia Association has launched the latest edition of its annual publication, Fintech Pulse 2024, unveiling insights and resources that position Latvia as a thriving hub for European fintech.
Announced at this year’s Fintech Forum, the magazine is now available in digital format, offering a comprehensive guide for fintech professionals and entrepreneurs navigating the Latvian market and exploring its advantages.
This issue covers essential topics, from support tools provided by Latvijas Banka and newcomer roadmaps to Riga’s investor resources and fintech education opportunities. Readers will find the latest fintech news from Latvia, coverage of this year’s key industry events, and member insights on the future of fintech. The Fintech Landscape section provides a comprehensive overview of the Latvian fintech ecosystem.
Tina Lūse, Managing Director of Fintech Latvia Association, expressed excitement about the ecosystem’s growth: “We are excited to unveil the third annual edition of Fintech Pulse. This year has been pivotal for our ecosystem, and together with public sector stakeholders, we are enhancing financial inclusion, democratizing investments, and driving innovation throughout the sector. This is a testament to Latvia’s emergence as a fintech hub, establishing itself as an equal partner in innovation and support within the Baltic region.”
Minister of Finance Arvils Ašeradens highlighted Latvia’s fintech potential in the magazine, stating: “Latvia has already made strides in adapting its regulatory framework to support a stable financial system. Now, we encourage financial market players to invest in modern technologies to meet the growing demand for inclusive financial services and solidify Latvia’s position in the fintech landscape. We are confident that with the combined offer of the government, Latvijas Banka and Riga city, we are a great place to start your next scalable European FinTech!”
Minister of Economics Viktors Valainis expressed Latvia’s ambition in the magazine, stating: “Latvia wants to become a WEB 3.0. innovation hub and solidify itself as one of the leaders of a newly regulated EU crypto-asset market. We welcome international companies to choose Latvia, a flexible and fast-paced country, where you can obtain a MICA license in just 3 months. Open your office in Latvia, receive a MICA license and serve the whole EU market!”
The Fintech Latvia Association brings together fintech and non-banking financial service providers to represent their interests at both the national and international levels. It promotes sustainable development in Latvia’s financial sector by fostering reliable, responsible, and long-term industry practices that earn trust from consumers and regulatory authorities. The association is committed to supporting innovation and growth opportunities within the fintech landscape.
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The World Economic Forum (WEF) has released a pivotal white paper in collaboration with the Financial Conduct Authority (FCA), titled “Quantum Security for the Financial Sector: Informing Global Regulatory Approaches”. This January 2024 publication underscores the urgent need for global cooperation as the financial sector transitions from a digital economy to a quantum economy, highlighting both the immense opportunities and cybersecurity challenges posed by quantum computing.
Quantum: A Double-Edged Sword for Finance
Quantum computing offers transformative benefits for the financial sector, such as accelerated portfolio optimization, enhanced fraud detection, and improved risk management. Yet, it simultaneously threatens the very foundation of cybersecurity. With quantum’s ability to break traditional encryption methods, sensitive data and financial transactions face significant risks. The white paper warns that such vulnerabilities could erode trust in the financial system and destabilize global markets.
The urgency to prepare is evident, with some quantum threats, such as “Harvest Now, Decrypt Later” attacks, already emerging. Governments and regulators, including the United States with its National Security Memorandum on Quantum (2022), have begun advocating for quantum security readiness by 2035. However, as noted in the paper, transitioning to a quantum-secure infrastructure is a monumental task requiring unprecedented coordination between regulators, industry leaders, and technology providers.
A Collaborative Framework: Four Guiding Principles
To address the complex challenges posed by quantum technologies, the WEF and FCA have proposed four guiding principles to inform global regulatory and industry approaches:
- Reuse and Repurpose: Leverage existing regulatory frameworks and tools to address quantum risks, rather than creating entirely new systems.
- Establish Non-Negotiables: Define baseline requirements for quantum security, ensuring consistency and interoperability across organizations and jurisdictions.
- Increase Transparency: Foster open communication between regulators and industry players to share best practices, strategies, and knowledge.
- Avoid Fragmentation: Prioritize global collaboration to harmonize regulatory efforts and avoid inconsistencies that could burden multinational organizations.
These principles aim to create a unified, forward-looking strategy that balances innovation with security.
A Four-Phase Roadmap for Quantum Security
The white paper introduces a phased roadmap to help the financial sector transition toward quantum security:
- Prepare: Raise awareness of quantum risks, assess cryptographic infrastructure, and build internal capabilities.
- Clarify: Formalize engagement between stakeholders, map current regulations, and model the cost and complexities of transitioning to quantum-safe systems.
- Guide: Address regulatory gaps, translate technical standards into actionable frameworks, and develop industry-wide best practices.
- Transition and Monitor: Implement cryptographic management modernization and adopt iterative, adaptable regulatory approaches to remain resilient in the quantum economy.
This roadmap emphasizes adaptability, encouraging stakeholders to continuously refine their strategies as quantum technologies evolve.
The Path Forward: Collaboration as a Catalyst
The transition to a quantum-secure financial sector is not merely a technological shift but a comprehensive rethinking of how industries and regulators approach cybersecurity. The interconnected nature of global finance means that collaboration between mature and emerging markets is crucial to avoid vulnerabilities that could undermine the entire system.
Regulators and financial institutions must act with urgency. As Sebastian Buckup, Head of Network and Partnerships at the World Economic Forum, notes in the report:
“The quantum economy era is fast approaching, and we need a global public-private approach to address the complexities it will introduce. We welcome this opportunity to collaborate with the FCA to chart the roadmap for a seamless and secure transition for the financial services sector.”
Similarly, Suman Ziaullah, Head of Technology, Resilience, and Cyber at the FCA, emphasizes:
“Quantum computing presents considerable opportunities but also threats. The financial sector relies heavily on encryption to protect sensitive information, the exposure of which could cause significant harm to consumers and markets. Addressing this requires a truly collaborative effort to transition to a quantum-secure future.”
Global Impact: Ensuring Resilience in an Evolving Landscape
As quantum technologies mature, they will redefine the landscape of cybersecurity. The financial sector, as one of the most sensitive and interconnected industries, must prioritize preparedness to ensure stability, protect consumers, and maintain trust.
The Quantum Security for the Financial Sector: Informing Global Regulatory Approaches white paper offers an essential foundation for continued dialogue and action. By adhering to the guiding principles and roadmap outlined in the report, stakeholders can navigate this transformation with foresight and cooperation.
The full report, published by the World Economic Forum, highlights the need for a unified global approach to quantum security, serving as a rallying call for industry and regulatory leaders alike.
Source: World Economic Forum, “Quantum Security for the Financial Sector: Informing Global Regulatory Approaches”, January 2024.
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The fintech landscape continues to redefine itself, driven by innovation, partnerships, and groundbreaking strategies. Today’s roundup focuses on the latest digital wallet offerings, evolving payment trends, strategic collaborations, and notable funding achievements. This editorial explores the broader implications of these developments, casting light on how they shape the future of fintech and beyond.
Beacon’s Digital Wallet for Immigrants: A Gateway to Financial Inclusion
Beacon Financial, a leading player in financial technology, recently launched a digital wallet tailored to meet the unique needs of immigrants moving to Canada. This offering bridges a critical gap, enabling seamless financial integration for newcomers navigating a foreign system.
By combining intuitive technology with user-centric features, Beacon aims to empower immigrants with tools for payments, savings, and remittances. This aligns with the growing demand for tailored financial products that resonate with specific demographics.
Op-Ed Insight:
Financial inclusion is more than just a buzzword; it’s a moral imperative in the fintech space. Products like Beacon’s digital wallet highlight the industry’s potential to create tangible change. As global migration trends increase, such offerings could inspire similar initiatives worldwide.
Source: Fintech Futures.
Juniper Research Highlights 2025’s Payment Trends
Juniper Research’s latest report unveils pivotal payment trends poised to dominate in 2025. Central themes include the adoption of instant payment networks, a surge in embedded finance solutions, and the rise of crypto-backed financial products.
The research underscores the rapid adoption of real-time payment systems, fueled by increasing consumer demand for speed and efficiency. Meanwhile, embedded finance promises to blur the lines between traditional banking and non-financial services, delivering personalized and context-specific solutions.
Op-Ed Insight:
As the lines between financial services and technology continue to blur, these trends emphasize the industry’s shift toward convenience and personalization. The growing role of crypto-based solutions reflects an evolving consumer mindset, where decentralization and digital-first experiences gain precedence.
Source: Juniper Research.
MeaWallet and Integrated Finance Partner to Revolutionize Digital Wallets
MeaWallet, a prominent fintech solutions provider, has partnered with Integrated Finance to advance digital wallet capabilities and secure card data access for fintech companies. This collaboration focuses on empowering fintechs to deliver better, safer digital payment experiences.
MeaWallet’s role as a technology enabler aligns seamlessly with Integrated Finance’s goal of simplifying complex financial infrastructures. Together, they aim to create scalable, robust platforms for secure payment solutions.
Op-Ed Insight:
Partnerships like this underscore the importance of collaboration in driving innovation. As security concerns grow in tandem with digital payment adoption, solutions addressing these challenges are essential for maintaining consumer trust. The fintech ecosystem thrives when synergy and innovation coalesce.
Source: MeaWallet News.
Nucleus Security Among Deloitte’s Fastest-Growing Companies
Nucleus Security has achieved a remarkable milestone, ranking 85th on Deloitte’s 2024 Technology Fast 500 list. This achievement is attributed to its robust cybersecurity solutions, which cater to the increasingly digital fintech environment.
With cyberattacks becoming more sophisticated, fintech companies are under immense pressure to safeguard their platforms. Nucleus Security’s growth reflects the rising demand for comprehensive, scalable security solutions that protect sensitive financial data.
Op-Ed Insight:
In a digital-first world, robust cybersecurity isn’t optional—it’s fundamental. The recognition of companies like Nucleus Security signals the growing importance of protecting fintech infrastructure as the industry scales globally.
Source: PR Newswire.
OpenYield Secures Funding to Transform the Bond Market
OpenYield has announced a successful funding round, aiming to revolutionize the bond market through innovative technology. The platform promises greater transparency, efficiency, and accessibility in fixed-income investments.
This funding underscores the growing appetite for digitizing traditionally opaque financial markets. By leveraging cutting-edge technology, OpenYield seeks to democratize bond investments, making them accessible to a broader audience.
Op-Ed Insight:
The bond market, long viewed as complex and inaccessible, is ripe for disruption. OpenYield’s efforts to modernize this space highlight fintech’s transformative potential to democratize finance and empower individual investors.
Source: PR Newswire.
Key Takeaways: Shaping the Future of Fintech
Today’s developments underscore several critical themes in the fintech landscape:
- Personalization and Inclusion: Products like Beacon’s wallet highlight the importance of understanding and addressing specific user needs.
- Collaborative Ecosystems: Partnerships, like that of MeaWallet and Integrated Finance, emphasize the power of collaboration in solving industry challenges.
- Emerging Technologies: Juniper Research’s predictions affirm the continued influence of blockchain, embedded finance, and instant payment networks.
- Security at the Core: The recognition of Nucleus Security underscores the essential role of cybersecurity in fintech.
- Market Transformation: OpenYield’s funding signifies the ongoing disruption of traditional financial markets, paving the way for broader accessibility.
The post Fintech Pulse: Daily Industry Brief – A Dive into Today’s Emerging Trends and Innovations appeared first on News, Events, Advertising Options.
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