Innovation In Fin Tech Regulation

At present,China is ushering in a wave of Fin Tech development.A series of Fin Tech products represented by blockchain and big data are developing rapidly.The deep integration of finance and technology has become a new trend.The integration of finance and technology has promoted the reform of the financial industry,but it also inevitably brings more new challenges to the financial regulatory systems of various countries.Due to the characteristics of openness,interoperability and higher technology content,financial technology innovation makes financial risks more hidden and difficult to show,especially information technology risk and operational risk issues are more prominent,and its potential systemic and cyclical risks are also More complicated.Financial technology with the nature of "disruptive innovation" will not only have a significant revolutionary impact on the global financial industry,but also have a profound impact on financial risk prevention and financial supervision.At present,due to the constraints of information data,higher regulatory costs,and information asymmetry,China's financial regulatory authorities have severely lagged China's fintech supervision and caused fintech risks to accumulate and erupt.In the face of the booming fintech,the lag of the law is becoming increasingly apparent,and it is difficult for the regulatory mechanism to develop simultaneously.The legal supervision of fintech in China has contradictions in terms of time dimension,space dimension,and regulatory capability that are difficult to adapt to the development of fintech.How to balance the relationship between fintech innovation and the prevention and control of financial risks has become a major problem in China's financial supervision.In this context,the regulatory sandbox mechanism has emerged.The regulatory sandbox model absorbs the idea of "destructive innovation",andconstantly explores the balance between innovation and security of fintech through deregulation.It is considered to be the best way for fintech supervision at present.The so-called regulatory sandbox refers to a safe space in which regulatory requirements have been relaxed.On the premise of protecting the rights of consumers or investors and strictly preventing risk spillovers,it has created a regulatory environment that encourages innovation as much as possible.This concept was first introduced by the Financial Conduct Authority(FCA)in November 2015.The core competitiveness of finance lies in innovation.The regulatory sandbox system helps to reform the traditional financial supervision model,and can promote the positive interaction between financial supervision institutions and financial innovation subjects.While supporting financial innovation,it also makes supervision mechanisms Resilience,resulting in the effectiveness of differentiated regulation.The regulatory sandbox is a regulatory model that can balance the development of financial innovation and the prevention of financial risks.Its essence is pre-access regulation,differentiated regulation,and temporary regulation.It also provides an interaction mechanism between financial regulators and financial innovation entities.Help promote the healthy and orderly development of fintech and financial innovation.In the fifth year of China 's special rectification of Internet financial risks,the progress of the Chinese version of the regulatory sandbox is also quietly accelerating.However,research on how to build a regulatory sandbox system in China is relatively lacking.Therefore,it is of great research significance to explore the legal construction of China's regulatory sandbox system.Whether or not China can introduce a regulatory sandbox legal system and how to construct a regulatory sandbox system in line with Chinese characteristics to solve the current financial technology regulatory dilemma are the main issues discussed in this article.Focusing on this problem,this article will use the method of interdisciplinary approach,comparative research,induction and deductive research to follow the problem-oriented thinking of "proposing a problem-analyzing the problem-constructing a hypothesis-verifying a hypothesis-solving a problem".Several sections are analyzed and explained:The first chapter of this paper starts from the perspective of the development status of fintech in China,and summarizes the framework of fintech supervision system in China and its deficiencies according to the current Internet financial supervision model in China.This chapter is divided into three sections.The first section explains the connotation of fintech and the nature of its "destructive innovation".The second section discusses the current state of fintech supervision inChina in the face of the rapid development of fintech and further deconstructs the following.Set the stage for the background;the third section discusses the predicament of China's fintech supervision and the existing legal issues from the three main dimensions of financial regulators,fintech companies and financial consumers.The second chapter of this article introduces the latest practice of fintech regulation in the field of international financial regulation,the regulatory sandbox system,and conducts a comprehensive analysis of the regulatory sandbox model.Adaptability.This chapter is divided into three sections.The first section starts with the concept of the regulatory sandbox.It explains that the launch of the regulatory sandbox is also based on its logical basis of "destructive innovation." It reveals that the regulatory sandbox is structured financial regulation,ex-ante financial regulation,temporary financial regulation,and differentiated financial regulation,which aims to clarify the legal definition of the regulatory sandbox system.The second section analyzes the constituent elements of the supervision sandbox system from the perspective of the sandbox supervision subject,the testing subject and the consumer.According to the sandbox's access conditions,testing process and the entire operation of the exit mechanism,The essence of the box is deconstructed.It is clear that the core of the regulatory sandbox system is to release regulatory regulations to a limited extent,test fintech innovative products and services,and maintain its fintech innovation vitality.The third section introduces the practice and exploration of fintech supervision in the United Kingdom,Singapore and Hong Kong in order to achieve a balance between encouraging fintech innovation and controlling financial risks,and forming a unique regulatory sandbox experience.The regulatory sandbox in the United Kingdom belongs to behavioral regulation.The UK Financial Conduct Authority defines the regulatory sandbox as a “safe space”.Financial innovation entities are in this space on the premise of protecting the rights of consumers or investors and preventing risk spillovers,can keep its financial innovation vitality as much as possible.Singapore's regulatory sandbox is more oriented towards "flexible regulation",which is a "trial and error" regulatory model,which is characterized by openness,greater flexibility in regulation,and greater tolerance of faults.The supervision sandbox of Hong Kong in China is a separate industry supervision model,and the “Trinity” type of financial technology supervision with the Financial Administration Bureau,the Insurance Industry Administration Bureau,and the Securities and Futures Commission as the supervision body.By summing up the above experience,the possibility of solving the current financial technologyregulatory dilemma in China with a regulatory sandbox legal system is proposed.The third chapter of this article analyzes and demonstrates the necessity and feasibility of constructing a regulatory sandbox system in China on the basis of a full understanding of the theoretical model and practical content of the regulatory sandbox system,combined with China's financial regulatory policy objectives.The first section is based on the current situation of China's financial supervision,and it is of practical significance to analyze the introduction of the supervision sandbox system in China.Establishing a regulatory sandbox system is conducive to improving China's fintech regulatory system,beneficial to the positive interaction between financial regulatory agencies and regulated objects,and to the realization of the value of financial consumer protection in China.The second section mainly analyzes the necessity of transplanting the regulatory sandbox system.Because the regulatory sandbox is consistent with the evolution of China 's regulatory legal system and is similar to the logic of China 's regional financial reform pilots,it is authorized by the regulatory authority in accordance with the degree of business risk and impact,and in accordance with moderately simplified access standards and processes to allow financial technology Under a limited business license,an enterprise conducts business tests using a real or simulated market environment.After the test shows that it is suitable for full promotion,it can further obtain a full license in accordance with current laws and regulations and include it in the normal regulatory scope.If regulators can use testing as a tool to measure the potential impact of fintech innovations on financial markets,regulators can use this technical analysis information for policy work,supervision and supervision.The fourth chapter of this paper responds to the predicament of China's current fintech supervision in Chapter I,draws on international regulatory experience,and summarizes the empirical implications for fintech supervision in China,with a view to building a regulatory sandbox system with Chinese characteristics.This chapter is divided into two sections.The first section establishes China's regulatory sandbox by establishing a multi-subject supervision led by "one committee,one party,two sessions",clearly identifying licensed financial institutions and "quasi-financial institutions" as the test subjects of the regulatory sandbox and the protection of consumer rights Institutional content framework.The second section starts with the establishment of limited legal liability exemption,the establishment of a dynamic regulation adjustment mechanism and information exchange mechanism,and the exploration of a cross-regional "supervision sandbox" cooperation mechanism toimprove China's regulatory sandbox mechanism design.On the basis of China's existing financial supervision framework,it puts forward the viewpoint of introducing a supervision sandbox model and formulating a new financial technology innovation supervision model of leniency and strictness.