FinTech Features December 2024

As we wrap up a fantastic year, in this edition we cover: 

• BNPL Regulation: New UK rules for Buy-Now, Pay-Later products, requiring FCA authorisation and affordability checks, are set for 2025.
  
• DAOs & the Law: Exploring the Law Commission’s insights on decentralised autonomous organisations and the rise of “wrapped” DAOs.
  
• Critical Providers Framework: A new UK regime for critical third-party providers, effective January 2025, to enhance resilience.
  
• Open Finance Reform: The UK’s Data (Use and Access) Bill aims to advance data portability and smart data sharing for open finance.
  

We’re also thrilled to share some exciting news about the team’s recent achievements. We’ve been honoured with a nomination for FinTech Firm of the Year at the Chambers UK Awards, taking place this February. Additionally, we’re proud to be recognised in Chambers FinTech 2025, securing rankings across 10 practices and 15 individual distinctions—including notable mentions for Jonathan Emmanuel, Gavin Punia, and Trystan Tether from our UK team.

As we close out 2024, we wish you a joyful holiday season and a prosperous New Year ahead.  

Spotlight on: Andries Doets 

We are thrilled to welcome Andries Doets to our Finance & Financial Regulation team in the Netherlands. Having founded two boutique law firms in the Netherlands, Andries brings a wealth of expertise and leadership to Bird & Bird, further strengthening our financial offering across Europe.

With over 20 years of experience, Andries advises businesses and financial institutions on Dutch and European financial regulation, transactions, and acquisitions. His expertise spans regulatory litigation, supervisory investigations, FinTech regulations (PSD2, EMD2, MiCAR), anti-money laundering, and economic sanctions.

We had the pleasure of sitting down with Andries to discuss his recent move, and his insights on the evolving FinTech landscape.

What excites you most about this new chapter at Bird & Bird?

“I can now offer my FinTech clients integrated legal advice, with respect to adjacent areas of law. Financial supervision law is increasingly embedded in adjacent areas of law (e.g. data protection, digital resilience, consumer law).”

How do your experiences from running your own firm shape your approach to client challenges at Bird & Bird?

“I am used to short lines of communication and a pragmatic approach, always looking for true added value for the client. This fits Bird & Bird perfectly. I will continue along those lines, now being able to use the advantages of an international platform. Cross-border financial services are increasingly becoming the norm.”

What groundbreaking changes do you foresee in the Dutch FinTech landscape in the coming years?

“The Dutch leading PSPs will strengthen their market position on the European continent, ensuring that the Netherlands will retain an important position within the payments ecosystem. I further expect many innovative developments in the market in terms of integrating DLT and traditional financial services. I am excited being part of this.”

Click to view Andries' profile

UK: Last Buy Now Pay Later Consultation Before Final Legislation is Laid in Early 2025

The UK government is set to regulate Buy-Now, Pay-Later (BNPL) products, with new rules expected to take effect in 2025. The upcoming legislation will require BNPL providers to be FCA authorised, introduce bespoke disclosure requirements, and enforce affordability assessments, aiming to balance consumer protection with operational feasibility.

Read the full story

Wrapping the DAO: Decentralised Autonomous Organisations under English Law

The Law Commission’s recent Scoping Paper on DAOs highlights the evolving legal landscape for decentralised autonomous organisations in the UK. Despite the challenges, the report underscores the flexibility of English law in accommodating new technologies, while noting the need for potential reforms to better support not-for-profit DAOs. The paper also explores the trend of “wrapping” DAOs with legal entities to enhance operational capabilities and limit liabilities.

Read the full story

Ensuring Stability: UK's New Framework for Critical Third Party Providers

The UK has introduced a new regulatory framework for critical third-party providers to the financial sector, ensuring operational resilience and stability. This regime, effective from 1 January 2025, mandates stringent compliance and oversight measures to mitigate risks from service disruptions.

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PSR's New Directive: Publishing Fraud Enabler Data to Hold Tech Firms Accountable

The Payment Systems Regulator (PSR) is set to publish data on tech firms and social media platforms that enable authorised push payment (APP) fraud. This initiative aims to raise consumer awareness, enhance vigilance, and encourage platforms to collaborate with payment firms to prevent fraud. The PSR’s approach signals a potential shift towards more stringent oversight of tech companies in relation to fraud prevention.

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The UK’s Data (Use and Access) Bill – proposals to facilitate the future of open banking and establish open finance in the UK

The UK’s Data (Use and Access) Bill aims to enhance data portability and establish a robust open finance regime. With broad powers for real-time data sharing, the Bill supports the growth of smart data schemes, facilitating secure information exchange between consumers, businesses, and authorised third parties. This initiative aligns with the UK’s ambition to lead in open finance and adapt to evolving data governance trends.

Read the full story

Recent DORA Webinars

The team have recently hosted three insightful webinars centered on DORA. If you missed them, you can watch the replays here!

• 30 October 2024 - Understanding the nuances of the Digital Operational Resilience Act (DORA) - EU Focus
  
• 30 October 2024 - Understanding the nuances of the Digital Operational Resilience Act (DORA) - US Focus 
  
• 25 November 2024 - Live Q&A Session - Navigating the Digital Operational Resilience Act (DORA)
  

Other recent news and alerts from around the firm

We are always busy publishing news and alerts relevant to the FinTech industry. Here is a roundup of recent articles you may have missed. 

• The FCA issues Dear CEO letters to banks, building societies and payments firms setting out its expectations on implementing the APP fraud reimbursement requirements
  
• Germany: Financial regulators issue first license for a blockchain-based trading and settlement system
  
• Cyber Resilience Act: A New Chapter in EU Cybersecurity Regulation

European Union Artificial Intelligence Act: a guide 

Introducing Bird & Bird's guide to the European Union (EU) Artificial Intelligence (AI) Act.

Our multidisciplinary team have developed this guide to help you navigate the intricacies of the EU AI Act.

Providing a concise overview of the key elements of the Regulation, this guide outlines the essential steps organisations need to take the achieve compliance. 

Our guide explores the Act’s key concepts, scope, requirements for various types of AI, arrangements for testing AI in regulatory sandboxes, governance, enforcement, and additional measures following the Act’s adoption.

Access the guide