On May 19, 2016, the Competition Bureau of Canada (the
Bureau) launched a market study FinTech in Canada.
The Bureau enforces and administers the Competition Act
(Canada) and as part of its mandate participates in activities to
promote a competitive marketplace.
The purpose of the study, as described by the Bureau, is to
advise and guide financial sector regulators and other relevant
authorities on how to ensure that regulation does not unnecessarily
impede competition in the sector.
According to the press release issued by the Bureau, the study
will focus on how innovation is affecting the way consumers and
businesses use financial products and services. The study will
explore the competitive impact that FinTech is having on the
industry, barriers to entry faced by companies, and whether there
is a need for regulatory reform to promote greater competition
while maintaining consumer confidence in the FinTech sector. The
study will examine peer-to-peer banking, e-wallet, mobile wallets,
mobile payments, crowdfunding and online-based financial advisory
Interestingly, both the Department of Finance and the Office of
the Superintendent of Financial Institutions, the two government
agencies directly responsible for banks and other federally
regulated financial institutions appear to have been taking more of
a wait and see approach to FinTech developments.
It is also interesting to note that the Bureau states as one of
its fundamental premises for the study that overregulation can
restrain competition and impact the efficiency of a market. Most
industry observers would probably be confident that they will find
plenty of examples of overregulation.
What has been the impact of
technology led innovation on the competitive landscape? What is
happening to competition? How will innovation impact competition in
How will consumers benefit from
What are the barriers to entry,
expansion, or adoption for FinTech companies? Are they regulatory
What is the current state of the
regulatory framework for financial services? Does it support or
inhibit competition and innovation? Are changes required to
encourage greater competition and innovation in the sector?
Are the consumer protections in place
today enough to adapt for the future? What additional protections
should be put in place for consumers? Is there a need for greater
transparency in fees?
What issues should be considered when
developing or amending regulations to ensure competition is not
Interested stakeholders are invited to make a submission to the
Bureau. The Bureau would appreciate receiving submissions and/or
indications of willingness to participate in an oral interview with
the Bureau before June 30, 2016.
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The Canadian Office of the Superintendent of Financial Institutions ("OSFI") recently ruled that a bank cannot promote comprehensive credit insurance ("CCI") within its Canadian branches under the Insurance Business (Banks and Bank Holdings Companies) Regulations (the "Regulations").
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