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SEC Issues Notice of Substituted Compliance Application and Proposed Substituted Compliance Order for United Kingdom and Re-Opens Comment Period for Notice and Proposed Substituted Compliance Order for France

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Washington, D.C.–(Newsfile Corp. – April 5, 2021) – The Securities and Exchange Commission voted to take two actions to continue to advance implementation of security-based swap regulation under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  The Commission is publishing a notice of application and proposed substituted compliance order in response to an application from the United Kingdom’s Financial Conduct Authority (FCA).  In addition, the Commission is re-opening the comment period on the notice of application and proposed substituted compliance order in relation to the application by France’s Autorité des Marchés Financiers (AMF) and Autorité de Contrôle Prudentiel et de Résolution (ACPR).

“These actions reflect the Commission’s continued commitment to stand up the Dodd-Frank Title VII regime, prepare for the registration of security-based swap dealers later this year, and continue engaging with our foreign counterparts,” said SEC Acting Chair Allison Herren Lee.  “I thank our UK, French and EU colleagues for their commitment in advancing strong cross-border regulatory cooperation.”

The FCA application seeks substituted compliance for UK-regulated firms based on compliance with UK requirements.  The proposed substituted compliance order for the UK provides that certain UK-regulated firms that are also registered with the Commission as security-based swap dealers and major security-based swap participants conditionally may satisfy certain requirements under the Securities Exchange Act of 1934 by complying with comparable UK requirements.  The Commission would retain the authority to inspect, examine and supervise these firms and take enforcement action as appropriate. 

The Commission also is re-opening the comment period on the French notice of application and proposed substituted compliance order.  The re-opened comment period will give market participants and the public an opportunity to consider potential changes to the proposed order and additional questions related to the proposed order.  

These actions reflect the Commission’s consideration of the comparability of applicable non-U.S. requirements, and incorporate conditions intended to help promote comparability in practice.

The public comment periods for the UK and French applications will remain open for 25 days following publication of the actions in the Federal Register.  Additional information about substituted compliance applications is available at: https://www.sec.gov/page/exchange-act-substituted-compliance-and-listed-jurisdiction-applications-security-based-swap.

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FACT SHEET

UK and France Substituted Compliance Applications and Proposed Commission Orders

Apr. 5, 2021

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The Commission is taking two actions to continue to advance the availability of substituted compliance for certain non-U.S. security-based swap dealers and major security-based swap participants, in anticipation of those firms’ registration with the Commission beginning October 6, 2021.

The Commission is publishing notice of an application by the UK’s Financial Conduct Authority (FCA), requesting substituted compliance for UK-regulated security-based swap dealers and major security-based swap participants.  The Commission also is publishing a proposed order to conditionally provide substituted compliance to UK-regulated firms. 

The Commission is also re-opening the comment period on the notice of substituted compliance application by France’s Autorité des Marchés Financiers (AMF) and Autorité de Contrôle Prudentiel et de Résolution (ACPR) and the related proposed substituted compliance order.

Substituted Compliance Framework

Exchange Act rule 3a71-6 conditionally provides that non-U.S. security-based swap dealers and major security-based swap participants may satisfy certain requirements under section 15F of the Exchange Act by complying with foreign requirements that the Commission has found to be comparable.  The Commission’s comparability assessment must consider the scope and objectives of the foreign requirements and also the effectiveness of the foreign financial supervisory and enforcement frameworks.   

Rule 3a71-6 further conditions substituted compliance on the Commission and the foreign financial regulatory authority entering into a supervisory and enforcement memorandum of understanding and/or other arrangement addressing supervisory and enforcement cooperation and other matters related to substituted compliance.  

Substituted compliance does not constitute exemptive relief, but instead provides an alternative method by which non-U.S. dealers and major participants may comply with applicable U.S. requirements.  The Commission retains the authority to inspect, examine and supervise those firms and take enforcement action as appropriate.

The registration compliance date for security-based swap dealers and major security-based swap participants is October 6, 2021, and market participants will begin counting security-based swap transactions and positions toward the registration thresholds on August 6, 2021.  See “Key Dates for Registration of Security-Based Swap Dealers and Major Security-Based Swap Participants,” available at: https://www.sec.gov/page/key-dates-registration-security-based-swap-dealers-and-major-security-based-swap-participants.

The FCA’s Application

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The FCA requests that the Commission grant substituted compliance in connection with requirements under the Exchange Act regarding: 

  • Risk control – requirements related to capital, margin, risk management systems, trade acknowledgment and verification, portfolio reconciliation and dispute reporting, portfolio compression and trading relationship documentation.
  • Recordkeeping and reporting – requirements related to record creation, record maintenance, reporting, notices and quarterly securities counts.
  • Internal supervision and compliance – requirements related to supervision, conflicts of interest and chief compliance officers, and certain related matters.
  • Counterparty protection – requirements related to fair and balanced communications, disclosure of material risks and characteristics, disclosure of material incentives or conflicts of interest, daily mark disclosure, “know your counterparty,” suitability of recommendations and clearing rights disclosure.

In support, the FCA’s application includes analyses that compare UK requirements with relevant requirements under the Exchange Act.  The application also includes information regarding the financial supervisory and enforcement frameworks in the UK.

The FCA’s application is available on the SEC website.
 

Proposed Substituted Compliance Order for UK Firms

The Commission is publishing for comment a proposed substituted compliance order in connection with the FCA’s application.  The proposed order reflects the Commission’s preliminary assessments regarding the comparability of applicable UK requirements, and the effectiveness of the UK financial supervisory and enforcement frameworks.  The proposed order incorporates certain conditions or other limits including:

  • Trading Relationship Documentation – Firms would not receive substituted compliance in connection with certain disclosure-related provisions for transactions with U.S. counterparties, but would receive it for transactions with non-U.S. counterparties.
  • Portfolio Reconciliation and Dispute Reporting – Firms would have to report counterparty valuation disputes directly to the Commission, based on UK timing requirements.
  • Capital – Firms would need to: (a) maintain an amount of assets that are allowable under Exchange Act rule 18a-1, after applying applicable haircuts under the Basel capital standard, that equals or exceeds the firm’s current liabilities coming due in the next 365 days; (b) make a quarterly record listing: (i) the assets maintained under the condition described in (a) above, their value, and the amount of their applicable haircuts; and (ii) the aggregate amount of the liabilities coming due in the next 365 days; (c) maintain at least $100 million of equity capital composed of highly liquid assets, as defined in the Basel capital standard; and (d) include its most recent statement of financial condition (i.e., balance sheet) filed with its local supervisor, whether audited or unaudited, with its written notice to the Commission of its intent to rely on substituted compliance.
  • Internal Supervision – Firms’ internal supervision frameworks must also promote compliance with certain residual U.S. requirements and the conditions to the proposed order.
  • Compliance Reports – Firms must provide compliance reports directly to the Commission.
  • Suitability – The firm’s counterparty must be treated as a “per se professional client” under UK requirements and must not be a “special entity” as defined in Exchange Act section 15F(h)(2)(C) and Exchange Act rule 15Fh-2(d).
  • Daily Mark Disclosure – The firm must be required to reconcile, and in fact reconcile, the portfolio containing the relevant security-based swap on each business day.
  • Recordmaking – Firms would need to: (a) apply substituted compliance to a linked substantive Exchange Act requirement, when a recordmaking requirement is linked to that substantive Exchange Act requirement for which a positive substituted compliance determination is being made; (b) apply substituted compliance to Exchange Act rule 18a-1 with respect to certain records that are important for the Commission to examine for compliance with Exchange Act rule 18a-1; and (c) preserve the data elements to create certain records required by the Commission’s rule and furnish the record in the format (e.g., blotter or ledger) required by that rule.
  • Record Preservation – Firms would need to: (a) apply substituted compliance to a linked substantive Exchange Act requirement, when a record preservation requirement is linked to that substantive Exchange Act requirement for which a positive substituted compliance determination is being made; and (b) apply substituted compliance to Exchange Act rule 18a-1 with respect to certain records that are important for the Commission to examine for compliance with Exchange Act rule 18a-1.
  • Unaudited Financial and Operational Reporting – Firms would need to: (a) report periodic unaudited financial and operational information in the manner and format specified by Commission order or rule; (b) present the financial information in the filing in accordance with generally accepted accounting principles that the firm uses to prepare general purpose publicly available or available to be issued financial statements in the UK; and (c) apply substituted compliance to Exchange Act rule 18a-1 if subject to that rule.
  • Annual Audited Reports – Firms would need to: (a) simultaneously transmit to the Commission a copy of audited financial reports filed with UK authorities; (b) include with the filing contact information of a person who can provide further information about the reports; (c) file accountant’s reports covering the financial reports if the firm is not required by UK law to have its financial reports audited; (d) file compliance or exemption reports addressing statements related to Exchange Act rule 18a-4 for which substituted compliance is not available; (e) file supporting schedules related to Exchange Act rule 18a-4; and (f) apply substituted compliance to Exchange Act rule 18a-1.  Firms that change their fiscal year end would need to (a) simultaneously transmit to the Commission a copy of any notice required to be sent by comparable UK laws; and (b) include contact information of a person who can provide further details about the notice.
  • Notification – Firms would need to: (a) simultaneously transmit to the Commission a copy of any notice required to be sent by comparable UK laws; (b) include contact information of a person who can provide further details about the notice; (c) apply substituted compliance to Exchange Act rule 18a-1 (if subject to that rule) with respect to any required notifications related to that rule; and (d) apply substituted compliance with respect to a category of records required to made and kept current under Exchange Act rule 18a-5 with respect to the requirement to provide notification of a failure to make and keep current that category of records.
  • Access to Books and Records – Firms would remain subject to Exchange Act requirements to keep books and records open to inspection by the Commission and to furnish promptly to the Commission legible, true, complete, and current copies of those records of the firm that are required to be preserved.
  • English Translations – Firms would need to promptly provide an English translation of any record, report, or notification upon request.

The Commission is requesting comment on each of the proposed determinations and conditions.
 

Re-Opening of Comment Period on Substituted Compliance Notice and Proposed Order for France

The French substituted compliance application addresses the same Exchange Act requirements that are the subject of the UK notice and proposed substituted compliance order.  The application includes analyses that compare French and European Union requirements with relevant requirements under the Exchange Act, as well as information regarding the financial supervisory and enforcement frameworks in France.  The application is available on the SEC website.

The Commission is re-opening the comment period on the notice of the French application and the related proposed substituted compliance order.  The re-opened comment period will give market participants and the public an opportunity to consider potential changes to the proposed order and additional questions related to the proposed order.  The proposed conditions relate to capital, trade acknowledgement and verification, and trading relationship documentation and mirror those included in the UK proposed substituted compliance order.  The additional questions, in part, seek comment on whether the more granular approach to recordmaking, record preservation, and reporting taken in the proposed UK proposed substituted compliance order should be incorporated into the French final substituted compliance order.  Other questions are intended to promote consistency across the two proposed orders given the similarity of the regimes.
 

Next Steps

The Commission will seek public comment on these actions for 25 days following publication in the Federal Register. 

Security-based swap market participants are urged to be mindful of the October 2021 registration compliance date for security-based swap dealers and major security-based swap participants, and relevant firms should take action to prepare for registration.  For further information, firms may contact the Office of Derivatives Policy in the Commission’s Division of Trading and Markets, at 202-551-5870.

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Fintech Pulse: Your Daily Industry Brief – Breaking Trends and Insights in Fintech

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In the fast-paced world of financial technology, shifts occur daily as companies strive for innovation, customer satisfaction, and enhanced market reach. Today’s briefing covers a spectrum of developments, from Visa Direct’s groundbreaking integration in Korea to challenges plaguing the app economy. We’ll also touch on recent acquisitions, strategic partnerships, and expansions in fintech ecosystems. Here’s what you need to know about today’s most pressing fintech trends.


Visa Direct’s Milestone in South Korea: SentBe’s Card Transfer Service Launch

South Korea’s fintech ecosystem has taken a notable leap forward with SentBe’s implementation of Visa Direct’s Card Transfer Service. This collaboration marks a milestone, positioning SentBe as the first Korean fintech company to offer card-to-card international money transfers, a feature in high demand given the rise in cross-border financial activities. Visa Direct’s real-time card-to-card transfers are a potential game-changer for consumers and businesses alike, facilitating faster and more secure global transactions.

The collaboration exemplifies Visa’s larger strategy of partnering with regional fintech players to broaden its influence across Asia’s dynamic fintech markets. By tapping into SentBe’s growing customer base and extensive user insights, Visa is embedding itself deeper into local markets, simultaneously offering Korean users a more streamlined and efficient money transfer experience.

The service’s design allows individuals and small businesses alike to benefit from quicker transaction processing times, marking a significant evolution from traditional remittance processes that rely on intermediary banks. The move is especially critical in a digital age where customer expectations lean heavily towards instant, seamless financial interactions.

Source: Electronic Payments International


Fintech App ‘Trap’ Enrages Consumers Struggling to Cancel Subscriptions

In the modern subscription-based economy, some fintech companies are facing backlash over what customers perceive as the ‘trap’ of endlessly renewable subscriptions that are nearly impossible to cancel. A recent expose revealed mounting frustrations among consumers who signed up for digital services but later found themselves locked into subscriptions they could not easily terminate. The piece highlights the darker side of user retention strategies deployed by some companies to mitigate churn by making cancellation processes intentionally convoluted.

The app-based economy relies on recurring revenue, which remains a vital lifeline for startups and established firms alike. However, industry insiders argue that lack of transparency and difficult cancellation processes have an adverse impact on customer trust, leading to a growing dissatisfaction that may ultimately backfire on these companies. As consumers grow more savvy, fintechs relying on these practices could risk higher attrition rates, regulatory scrutiny, and brand erosion.

This emerging issue has raised questions about ethical standards and customer-centric models in fintech. As competition intensifies, companies must balance growth with transparent practices that foster customer loyalty, rather than coercion.

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Source: Forbes


Pinwheel and Terafina Partner to Streamline Omnichannel Customer Onboarding

Pinwheel, a fintech infrastructure company known for its payroll and income data connectivity solutions, recently announced a partnership with Terafina, a leader in omnichannel sales and service platforms for financial institutions. This collaboration aims to simplify and enhance the onboarding process for new customers, providing them with seamless experiences across multiple channels, whether online, mobile, or in-branch.

The partnership combines Pinwheel’s data integration capabilities with Terafina’s expertise in customer onboarding, allowing financial institutions to create more personalized and flexible account opening processes. With consumer expectations evolving towards instant service and mobile-first access, this integration empowers banks and credit unions to meet these needs by delivering cohesive and smooth digital onboarding journeys.

In an industry where customer acquisition and retention are increasingly dependent on first impressions, the significance of streamlined onboarding cannot be overstated. By improving access to real-time employment and income data, this partnership enhances user verification and compliance while also allowing institutions to better assess applicants’ creditworthiness, which is crucial in today’s lending environment.

Source: PR Newswire


nCino Acquires FullCircl in $135 Million Deal: Expanding the Scope of Relationship Management

Fintech giant nCino recently completed its acquisition of FullCircl, a move that underscores its ambition to broaden its reach in the financial services sector. FullCircl, known for its focus on customer relationship management (CRM) solutions tailored to financial institutions, brings a robust set of tools that will allow nCino to enhance its cloud-based banking platform. The acquisition, valued at $135 million, positions nCino as a stronger player in the relationship management space, especially crucial for institutions looking to build deep, long-term client relationships.

With this acquisition, nCino aims to expand its footprint in Europe and boost its offerings in the CRM space, providing banks and credit unions with innovative tools for client engagement and retention. The integration of FullCircl’s CRM capabilities will also support nCino’s existing portfolio, which includes loan origination and digital banking solutions, strengthening its position as a one-stop platform for financial institutions.

This acquisition is part of a growing trend of consolidation in the fintech sector, where larger firms acquire specialized players to fill critical service gaps and offer more comprehensive solutions. By building a holistic platform that spans multiple functionalities, nCino is better equipped to compete in the increasingly crowded digital banking software market.

Source: The Paypers


DriveWealth’s European Expansion: A Strategic Base in Lithuania

DriveWealth, a digital brokerage technology firm, has chosen Lithuania as the launchpad for its European operations. By establishing a base within Lithuania’s burgeoning fintech hub, DriveWealth is strategically positioning itself to tap into the European market, leveraging the country’s favorable regulatory environment and proximity to major EU economies.

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The expansion is particularly significant given the increasing demand in Europe for retail investing platforms that provide accessible and affordable market entry. DriveWealth’s solutions enable digital brokers and financial platforms to offer customers fractional shares and real-time trading experiences, which have proven highly popular in markets like the U.S. This move aligns with DriveWealth’s long-term growth strategy and its commitment to democratizing access to investing across the globe.

Lithuania’s supportive regulatory framework and well-developed fintech infrastructure make it an ideal location for DriveWealth’s entry into Europe. The country’s fintech-friendly policies allow innovative financial service providers to set up and scale efficiently. DriveWealth’s presence in Lithuania not only adds to the growing cluster of fintech firms but also reinforces the country’s reputation as a rising fintech powerhouse within the EU.

Source: Finance Magnates


Key Takeaways and Strategic Insights

As seen from today’s top stories, several overarching themes shape the fintech landscape:

  1. Global Partnerships and Local Expansion: Visa’s collaboration with SentBe exemplifies how partnerships enable fintech firms to break into regional markets by addressing specific customer needs.
  2. Transparency in Subscription Models: The customer backlash against difficult-to-cancel fintech services raises concerns about the sustainability of current subscription models.
  3. Innovation in Customer Onboarding: Pinwheel and Terafina’s partnership highlights the importance of streamlined onboarding processes as a means to increase customer satisfaction and improve retention.
  4. Mergers and Acquisitions to Fill Service Gaps: nCino’s acquisition of FullCircl illustrates a broader trend of consolidation, where fintech companies acquire specialized players to broaden their product portfolios.
  5. Regional Hubs as Strategic Launch Pads: DriveWealth’s decision to establish a base in Lithuania underscores the importance of regional fintech hubs in providing a supportive environment for global expansion.

Today’s roundup underscores the adaptability of fintech companies as they navigate emerging challenges and opportunities. From addressing regional financial needs to innovating customer experience, fintech firms continue to redefine what it means to engage in modern finance. As the industry grows, so too does the necessity for ethical practices, robust infrastructure, and agile customer solutions. In this competitive environment, the companies that prioritize transparency, customer satisfaction, and strategic expansion will set the standard for the future of finance.

 

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Fintech Pulse: A Snapshot of Global Expansion, Regulatory Moves, and Transformative Tech in Fintech

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In today’s fast-paced fintech ecosystem, the global narrative is pivoting towards integration, regulation, and technological advancement as new entrants aim for U.S. markets, emerging startups seek growth capital, and financial giants align with innovative trends. Here’s a breakdown of recent developments that underline the dynamism in fintech and the paths to profitability and compliance as technologies reshape financial services globally.


Singapore’s MAS Advocates for a Borderless Fintech Network

The Monetary Authority of Singapore (MAS) recently emphasized the importance of cross-border collaboration in the global fintech ecosystem, with chairman Ravi Menon outlining a vision for a seamless fintech network. This network would transcend geographic and regulatory boundaries, allowing Singapore and its fintech entities to engage in mutually beneficial partnerships worldwide. Menon highlighted that Singapore’s strategic geographic position and regulatory environment make it a natural hub for fintech collaborations that advance financial inclusion and foster innovation.

This call for a borderless approach underscores the need for interoperability among financial systems globally, particularly as digital payments and decentralized finance become increasingly prevalent. Singapore’s initiatives signal that regions with supportive fintech policies can potentially drive new growth avenues in the digital economy.

Source: Channel News Asia


Thredd’s McCarthy to Fintech Entrants: Be Sponsor-Bank Ready for the U.S. Market

Fintech firms eyeing the U.S. market face a challenging regulatory landscape. John McCarthy of Thredd advises that those looking to enter the U.S. market should prioritize establishing sponsor-bank partnerships. The U.S. regulatory framework mandates that fintech companies collaborate with sponsor banks to access the financial system, making this step a critical milestone for fintechs aiming to operate stateside.

McCarthy’s guidance highlights an increasingly common barrier for fintech companies: navigating complex regulatory requirements to gain a foothold in the lucrative U.S. financial sector. For many, this means rethinking business models to comply with financial regulations, even as they innovate. This approach has led several fintech firms to secure sponsorship deals with established banks, enabling them to deliver compliant financial services to U.S. consumers.

Source: PYMNTS


Spidr Fintech Lands Funding to Drive Growth with Wells Fargo Backing

Spidr, a rising fintech star, has successfully raised capital, attracting the attention of Wells Fargo and other financial institutions. The fresh funding will fuel Spidr’s ambitious expansion plans, further positioning it as a formidable player in the fintech space. This backing from Wells Fargo represents a trend where major financial institutions are investing in or partnering with fintech startups to gain a competitive edge and meet evolving consumer expectations.

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For Spidr, the capital injection aligns with a robust strategy for market penetration, and it’s an opportunity to leverage Wells Fargo’s extensive network and resources. Spidr’s latest round of funding signifies that traditional banks are increasingly open to collaborations with fintech entities, a trend that is reshaping the financial services landscape as banks seek to stay competitive in the digital age.

Source: Charlotte Business Journal


Elphinstone’s Trikl: Innovating Digital Payments in MENA

Elphinstone, a digital payments startup based in MENA, is introducing its innovative solution, Trikl, aimed at transforming payments across the region. The startup’s recent developments underscore its commitment to creating accessible and user-friendly payment systems tailored for the MENA market’s unique dynamics. By addressing specific needs such as currency exchange complexities and local payment preferences, Trikl is positioning itself as a key player in the digital payments landscape.

Trikl’s approach is particularly noteworthy as it caters to the MENA market’s diverse consumer base and taps into the region’s growing appetite for digital financial services. This development represents a promising advancement in digital payment solutions, fostering greater financial inclusion and enabling smoother transactions across borders in MENA.

Source: Menabytes


Hong Kong Sets Rules on Responsible AI to Get Ahead of Disruptive Tech

Hong Kong has unveiled regulatory guidelines on responsible AI use, a proactive move that places it among the leading jurisdictions in AI governance. This development signals Hong Kong’s recognition of the transformative impact of AI on financial services, as it sets clear boundaries on how AI can be used responsibly in financial applications. With AI continuing to disrupt financial services, responsible usage is becoming a priority, particularly in regions where financial systems are heavily reliant on technology.

These guidelines aim to balance innovation with accountability, addressing concerns over data privacy, ethical considerations, and risk management. Hong Kong’s stance on AI regulation reflects its commitment to safeguarding both consumers and financial institutions, setting a high standard for other regions to emulate in terms of regulatory foresight.

Source: South China Morning Post

 

 

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Fintech Pulse: Today’s Key Industry Developments, Appointments, and Regulatory Challenges

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The Changing Landscape of Global Fintech

The financial technology (fintech) industry continues to evolve at a rapid pace, making headlines worldwide. Today’s briefing dives into transformative moves and strategic shifts within fintech companies across diverse geographies. From innovative alliances to prominent executive appointments and ambitious expansions into banking, the industry is positioning itself for a future that intertwines financial inclusivity, regulatory compliance, and customer-centric technology. Let’s unpack these developments.


XTransfer’s Hong Kong Fintech Week Entry: Scaling Financial Access in China

XTransfer, a Shanghai-based cross-border financial services firm, has joined the Hong Kong Fintech Week to showcase its solutions, marking a significant milestone in its journey to bridge financial gaps for small and medium-sized enterprises (SMEs) in China. Founded in 2017, XTransfer addresses common barriers faced by Chinese SMEs in accessing international financial networks due to regulatory complexities. The firm’s platform facilitates smoother cross-border transactions by helping businesses navigate regulatory and compliance challenges seamlessly.

The strategic choice to participate in Hong Kong Fintech Week highlights XTransfer’s commitment to strengthening connections within the Asian financial hub. The firm seeks to tap into the region’s wealth of potential clients and partners, as Hong Kong continues to be a pivotal gateway for businesses engaging in cross-border trade with China. The move is also symbolic of the broader fintech community’s push to create inclusive and accessible financial networks, even amid evolving regulatory landscapes.

Source: XTransfer Joins Hong Kong Fintech Week to Expand Global Presence (Yahoo Finance)


Propelld’s New Chief Business Officer: Driving Growth and Product Innovation

Propelld, an Indian ed-finance company, recently appointed Manoj Shetty as its new Chief Business Officer (CBO), signaling a strong commitment to enhancing its market penetration and product offerings. Known for his extensive experience in fintech, particularly in business development and scaling, Shetty is expected to spearhead Propelld’s ambitions to bring tailored financing solutions to India’s education sector.

Propelld focuses on providing student loans and education financing to underserved sections of India, leveraging advanced data analytics to assess borrowers’ potential rather than conventional credit scores. Shetty’s addition to the leadership team suggests that Propelld aims to double down on its innovative data-driven model to better serve the unique financial needs within education.

As the industry grows more competitive, having a seasoned executive like Shetty could be instrumental for Propelld to fortify its unique value proposition. His track record indicates a capacity for handling the nuanced needs of financial services catering to niche markets, and he may well position Propelld to scale sustainably in the expanding ed-finance space.

Source: Propelld Names Manoj Shetty as Chief Business Officer (IBS Intelligence)

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Solo Funds Faces Legal Hurdles: The Class-Action Lawsuit Dilemma

In a move that could impact peer-to-peer lending’s regulatory path, Solo Funds faces a class-action lawsuit, alleging that the company’s lending practices breached consumer protection laws. As a platform designed to offer emergency loans to consumers facing cash flow issues, Solo Funds charges “tips” rather than conventional interest rates, a tactic intended to circumvent traditional lending regulations. However, plaintiffs argue that these tips effectively function as disguised interest, making Solo Funds’ practices deceptive and exploitative.

This lawsuit is a critical test for the burgeoning peer-to-peer lending segment, which has grown immensely in recent years as consumers seek alternatives to traditional financial institutions. The outcome may force similar platforms to reassess how they balance operational flexibility with regulatory compliance, potentially reshaping the industry’s approach to short-term lending.

With growing scrutiny on fintech lending platforms, the legal proceedings could also open a wider debate on how fintech firms should transparently operate within the bounds of financial laws. If Solo Funds is found liable, it may prompt stricter regulatory frameworks, affecting peer-to-peer platforms that rely on nontraditional models to attract users.

Source: Lending Fintech Solo Funds Faces Class-Action Lawsuit (TechCrunch)


Slice’s Transformation: A Fintech Company’s Foray into Traditional Banking

India-based Slice, originally a credit-based fintech, has announced its transition into a full-fledged bank, allowing it to offer conventional banking services in addition to its credit solutions. By securing regulatory approval to operate as a bank, Slice aims to expand its product range and deepen its relationship with a fast-growing consumer base in India. This move exemplifies a larger trend of fintech firms seeking to bridge the gap between traditional banking and innovative financial services.

Slice’s venture into banking will also set an intriguing precedent for other fintech companies in India and beyond. The company has successfully carved a niche among young users with its simple, digital credit products. As a bank, it can now offer savings accounts, lending products, and other services, thus creating a one-stop platform that could enhance customer retention and lifetime value.

The expansion to full banking status raises questions about how effectively Slice will manage its dual roles as a fintech innovator and a traditional bank, especially in a market as large and complex as India’s. It also marks a pivot point in the narrative of fintech companies morphing into full-service financial institutions, a trend that is gaining traction globally.

Source: India Fintech Slice Expands to Become a Bank (TechCrunch)


FullCircl’s 2025 Identity Verification Report: Insights into Compliance Challenges

FullCircl, a leading regulatory technology provider, recently released its “2025 State of Identity Verification” report, shedding light on the evolving landscape of identity verification and the challenges businesses face in maintaining compliance. As financial crimes become more sophisticated, firms increasingly invest in identity verification tools to stay ahead. According to the report, over 75% of financial institutions rank identity verification as a critical priority, citing the surge in fraudulent activities as a prime concern.

The report also highlights an industry-wide push towards digital identity systems and the use of artificial intelligence in detecting fraud patterns. As regulatory demands tighten and compliance risks rise, firms are urged to adapt swiftly. FullCircl’s findings underscore a need for seamless, real-time verification solutions that do not compromise customer experience—a delicate balance to maintain as identity verification protocols become more stringent.

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The insights from FullCircl’s report reveal a heightened industry focus on ensuring robust identity frameworks that foster trust without hindering the ease of digital transactions. This growing demand aligns with broader trends where digital trust is crucial in retaining customers and enhancing their satisfaction.

Source: FullCircl Releases 2025 State of Identity Verification Report (PR Newswire)

 

 

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