Thursday, May 25, 2017
10:00 a.m. – 11:30 a.m. EDT

The webinar will discuss the current state of fintech services in the US, including state licensing requirements, bank partnership arrangements, and the potential for special purpose bank charters at both the state and federal levels.

The presenters will also discuss the benefits and potential difficulties of these arrangements. Finally, the discussion will touch on fintech enhancements to existing bank services, including distributed ledger technology.

Topics Will Include:

  • An update on the state of fintech services;
  • Lending and payments models;
  • Bank partnerships;
  • State licenses;
  • Bank Charters;
  • True Lender; and
  • Madden.

Speakers:

CLE credit is pending for California and New York.

For more information, or to register, please click here.

The fast growing fintech industry continues to command the attention of investors across the globe.  A recent CB Insights report summarized the global financing trends for fintech companies in 2016.  There were 836 venture capital-backed financings, which raised $12.7 billion for fintech startups in 2016.  While this was a $2 billion drop from 2015 figures, it is a significant increase from 2012’s 451 deals, which raised $2.5 billion.  U.S. fintech issuers represented over half of the total number of fintech financings with 422 deals, raising $5.5 billion.

Within the fintech space, funding for blockchain and bitcoin companies accounted for 8% of total deals in 2016, raising $431 million. Companies in the payments tech field, which provide solutions to facilitate payment processing, raised $1.6 billion in 2016 across 150 financings.  Insurance tech companies also warrant mention with 109 deals, raising $1.6 billion in 2016.

As privately held companies opt to remain private longer and defer going public, there has been an emergence of “unicorns,” or companies that have a valuation of over $1 billion. CB Insights reports that there are now 190 unicorns with a cumulative valuation of $660 billion.  There are 22 fintech unicorns, including 11 U.S.-based fintech unicorns.  With increased access to capital, more privately held companies go through numerous rounds of financings, referred to as late-stage financings.  Fintech companies ended 2016 with a median late-stage deal size of $26.5 million, accounting for 29% of their total deal share.

On December 2, 2016, Comptroller of the Currency Thomas Curry confirmed that the agency will begin considering applications from FinTech companies to become special purpose national banks, saying that the OCC will charter “financial technology companies that offer bank products and services and meet our high standards and chartering requirements.” The OCC simultaneously released a white paper on issues addressing the conditions on extending national bank charters to FinTech companies.

Read our client alert.

On November 14, 2016, the SEC hosted a panel discussion entitled the “Impact of Recent Innovation in Capital Formation,” as part of its public forum on financial technology (Fintech) innovation held in Washington, D.C., and webcast over the SEC’s website.  Mr. Sebastian Gomez Abero, Head of the Office of Small Business Policy of the SEC’s Division of Corporation Finance, moderated the panel.

Panelists discussed the relationship between financial innovation and capital formation, the dynamic between Fintech and investor protection, and the risks, challenges and opportunities facing borrowers, lenders, intermediaries and regulators engaged in the online marketplace lending and crowdfunding spaces.  The panelists said that, overall, they see the recent growth in peer-to-peer online lending and crowdfunding technologies as positive developments, particularly in expanding the availability of and access to affordable credit and capital to traditionally underserved markets, including small business owners and entrepreneurs.  Another common theme identified by the panel is the need for greater clarity, standardization and consolidation in the regulatory structure.  A panelist commented that, at the moment, there were about 25 federal agencies involved in consumer finance and much more at the state level, with overlapping jurisdictions.  Oftentimes, borrowers who wish to tap into the online marketplace lending and crowdfunding spaces are confronted with the daunting task of navigating through a complex and overlapping regulatory landscape, with multiple regulators to deal with.  Notwithstanding these challenges, the panel expressed confidence that online marketplace lending and crowdfunding are poised to grow and develop in the coming years.  The SEC has also reported that in less than six months since the regulations became effective, more than 140 companies have started an offering using the new Regulation Crowdfunding.

Today the SEC announced the agenda and the panelists for its first ever fintech forum on November 14th.  As noted in the announcement, the session, which will begin at 9 a.m. ET, will be divided into four panels. Participants on the first panel will discuss the impact of recent innovation in investment advisory services. The second panel will discuss the impact of recent innovation on trading, settlements, and clearance activities. Participants on the third panel will discuss the impact of recent innovation in capital formation. The final panel will discuss investor protection in the fintech era.  The session is open to the public and also will be webcast.

Learn more here:   https://www.sec.gov/news/pressrelease/2016-234.html

Today the SEC announced it will host a public forum to discuss financial technology (Fintech) innovation in the financial services industry.  The press release notes that the forum is designed to foster greater collaboration and understanding among regulators, entrepreneurs and industry experts into Fintech innovation and evaluate how the current regulatory environment can most effectively address these new technologies. The panels will discuss issues such as blockchain technology, automated investment advice or robo-advisors, online marketplace lending and crowdfunding, and how they may impact investors. The forum will be on November 14, 2016. See: https://www.sec.gov/news/pressrelease/2016-195.html

Thursday, September 29, 2016
5:00 p.m. – 5:45 p.m. EDT

Join us for one of our upcoming monthly telephone briefings led by members of our Fintech team.

Topic: Madden and True Lender/CashCall

This call will be an operator-assisted call of approximately 45 minutes in duration, and will be followed by a brief Q&A opportunity. We also invite you to submit questions before the start of the call. A replay will be available upon request.

In order to RSVP for the September call, and to submit questions, please click here.

On September 12, 2016, the United States Chamber of Commerce’s Center for Capital Markets Competitiveness hosted a webinar to discuss the policy recommendations outlined in its report titled “A Plan to Reform America’s Capital Markets” (the “Report”).  The Report provides policy recommendations for the next administration and Congress to reform the capital markets in order to address current inefficiencies and inadequacies in the regulation and government oversight of the capital markets.  The Report includes a number of recommendations relating to financial services regulation, which are not the subject of this blog post.  With respect to capital formation, the Report addresses the following:

Financial reporting, corporate governance, and disclosure effectiveness:  The Report recommends establishing consistent definitions of “materiality” and rules of procedure for the SEC, the Financial Accounting Standards Board (FASB), and the Public Company Accounting Oversight Board (PCAOB), and developing a disclosure framework to more clearly present pertinent information to investors.  The Report asks that the SEC initiate changes to Exchange Act Rule 14a-8 and modernize shareholder resubmission thresholds.  The Report also advocates the repeal of rules unrelated to the SEC’s mission, including the SEC’s conflict minerals rule, resource extraction rule, and pay ratio disclosure rule, and recommends the re-proposal of the SEC’s pay-for-performance rule and clawback rule.  In addition, the Report calls for the creation of a Financial Reporting Forum, composed of SEC, FASB, and PCAOB representatives, as well as investors and businesses, tasked with identifying and addressing emerging financial reporting issues.

Capital formation and FinTech:  The Report discusses the success of the JOBS Act in enabling more efficient investment for smaller companies and emerging growth companies (EGCs) and recommends passing “JOBS Act 2.0” and related bills that promote capital formation and help increase access to capital for small businesses.  The Report also advocates the creation of a congressional bi-cameral committee, comprised of members of the House Committee on Financial Services and the Senate Committee on Banking, Housing and Urban Affairs, to study the current FinTech landscape and provide policy and legislative recommendations to both Houses of Congress.

A copy of the Report is available here.

Wednesday, September 21, 2016
8:00 a.m. – 5:30 p.m. PDT

Plug and Play Tech Center
440 N. Wolfe Road
Sunnyvale, CA 94085

Morrison & Foerster invites you to attend The George Washington University Law School’s Center for Law, Economics & Finance’s FinTech Forum Silicon Valley at Plug and Play Tech Center in Sunnyvale, California. Morrison & Foerster is co-sponsoring this event to bring together industry leaders, academic experts, government regulators, and legal scholars in the heartland of innovation.

Financial Technology, or FinTech, refers to a spectrum of technology innovations and startups that demonstrate disruptive potential in applications, processes, products, or business models in the financial industry. Morrison & Foerster’s tech acumen and entrepreneurial spirit, together with our financial services regulatory expertise and capital-raising experience, put us at the center of developments in the FinTech sector. Our financial services regulatory group provides innovative advice to companies focused on payments, remittances, marketplace lending, and digital currencies. Few firms bring together capabilities in each of these areas to guide FinTech companies on their path to success.

To register for this session, or for more information, please click here.

Please contact cbaker@mofo.com for a promotional code for free admission.

We invite you to read our latest alerts relating to FinTech:

OCC Announces Preliminary Framework on FinTech and Responsible Innovation. On March 31, 2016, the OCC released a white paper on financial technology innovation, which lays out a preliminary framework for “responsible innovation.” The White Paper articulates principles the OCC will follow when evaluating innovative products, services, and processes that require regulatory approval and identifying potential risks associated with them. The White Paper also represents the OCC’s commitment to improving its own understanding of new technology and to improving collaboration with the Consumer Financial Protection Bureau and other banking regulators to develop a consistent supervisory approach in this space. Click here to read our client alert.

Demystifying Blockchain and Distributed Ledger Technology – Hype or Hero? Move over Bitcoin. It’s the “blockchain”, the innovation that powers Bitcoin, that’s now grabbing all of the headlines. Supporters have been evangelising about the potential transformative power of distributed ledger technologies for some time. Indeed, many claim that distributed ledgers will be the most significant technology to disrupt business since the Internet. A whole host of major financial companies have publicised their interest and investment in this breakthrough technology, and governments and international bodies are increasingly discussing the potential implications of distributed ledgers on business, governments and the economy. Click here to read our client alert.