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4. Results: Answers
FinTech
4.
Activities
4.1
How are the following key activities in the fintech space regulated and what specific legal issues are associated with each? (a) Crowdfunding, peer-to-peer lending; (b) Online lending and other forms of alternative finance; (c) Payment services (including marketplaces that route payments from customers to suppliers (eg, Uber and AirBnb); (d) Forex; (e) Trading; (f) Investment and asset management; (g) Risk management; (h) Roboadvice; and (i) Insurtech.
Mexico

Answer ... (a) Crowdfunding, peer-to-peer lending

Articles 15 to 21 of the Financial Technology Institutions Law regulate crowdfunding institutions. Crowdfunding institutions are classified as entities that connect investment seekers with potential investors from the general public through the use of electronic applications, interfaces, websites or any other electronic and digital means of communication which allows applicants and potential investors to carry out financing and investment activities among themselves.

Article 16 of the law regulates three types of crowdfunding models:

  • debt financing, where investors provide financing with direct or contingent liabilities for the applicants;
  • equity investments, where investors own instruments representing equity in the applicants; and
  • profit sharing or royalties, which allow investors to participate under joint venture structures in projects developed by the applicants.

(b Online lending and other forms of alternative finance

The Financial Technology Institutions Law does not include specific online lending regulations. However, Article 27 allows e-money and payment institutions to grant users overdrafts.

(c) Payment services (including marketplaces that route payments from customers to suppliers (eg, Uber and AirBnb)

E-money and payment institutions are regulated under Articles 22 to 25 of the Financial Technology Institutions Law. Authorised institutions can issue, manage, transfer and account e-money and payments through electronic applications, interfaces, websites or any other electronic or digital means of communication.

Marketplaces that route payments from customers to suppliers are not regulated under the Financial Technology Institutions Law.

(d) Forex

General Provision 12/2018 issued by Banxico establishes the terms and conditions for e-money and payment institutions with regard to operations in foreign currency; while General Provision 6/2019 regulates the operations of crowdfunding institutions in foreign currency.

In general, all operations in foreign currencies made by fintech companies require the prior authorisation of Banxico.

(e) Trading

Trading is not regulated under the Financial Technology Institutions Law.

(f) Investment and asset management

The Mexican fintech regulatory framework does not include specific regulations on investment and asset management as yet.

(g) Risk management

The Mexican fintech regulatory framework does not include specific risk management regulations as yet.

(h) Roboadvice

The Mexican fintech regulatory framework does not include specific roboadvice regulations as yet.

(i) Insurtech

The Mexican fintech regulatory framework does not include specific insurtech regulations as yet.

For more information about this answer please contact: René Arce Lozano from Hogan Lovells, Mexico
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Topic
FinTech