On May 19th the Competition Bureau announced it has launched a market study of Canada's financial services technology ("FinTech") sector to determine whether it should be more closely regulated. According to the Bureau, FinTech innovations provide more choice by unbundling existing products and services and introducing new ones that can result in more efficient services, lower fees and greater savings for Canadians.

The study will focus on:

  • how innovation is affecting the way consumers and businesses use financial products and services,
  • the competitive impact that FinTech is having on the financial services industry,
  • the barriers to entry for companies working in FinTech, and
  • whether regulatory reform is needed to promote greater competition while maintaining consumer confidence in the financial services industry.

Regulation of FinTech in Canada

While the Federal government regulates banking in Canada through the Office of the Superintendent of Financial Institutions (OSFI), other components of banking are overseen by separate provincial and federal institutions.

Canada's FinTech industry is already subject to regulation; however, the technology has started to outpace the existing regulation such that some financial products are not covered.

The study will assess current regulation. The Competition Bureau will use the results of the study to determine how to best allocate responsibility for regulation between provincial and federal institutions. Interested stakeholders are invited to make a submission to the Bureau before June 30, 2016.

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.