Regulating Fintech in Canada and the United States: Comparison, Challenges and Opportunities

This article compares the regulatory frameworks, challenges and opportunities in financial technology (fintech) in Canada and the United States. Fintech is explored as a post 2008 global financial crisis phenomenon by reviewing the diverse interpretations of its definition, identifying its historical underpinnings, and noting industry trends and associated demand factors. The market environment, and regulatory approach, in Canada and the U.S. is not homogenous, and although there are similarities, each jurisdiction faces different challenges and opportunities. In the U.S., fintech has significant disintermediation potential, and supervisory structures exhibit fragmentation under a rules-based framework. Nevertheless, there is growing desire for principle-based regimes in the U.S., and several federal and state regulators have instituted “regulatory sandboxes.” Canada is characterized by principle-based regulation and features a robust sandbox in securities jurisdiction; yet fintech is largely being experienced as a bank-driven phenomenon, and bank-fintech partnerships are visible, as incumbents use fintech to enhance customer service and operations. Regulatory fragmentation does, however, present an entry cost for new consumer-facing firms in Canadian fintech sectors not falling within the ambit of federal financial institution oversight. Similarities and differences between the U.S. and Canada are explored in this article across multiple fintech sectors including fintech banking, cryptocurrency (cryptocurrency as money, cryptocurrency funds and derivatives, and initial coin offerings), fintech credit (peer-to-peer lending), payments, algorithmic wealth management (robo-advisors) and financial account aggregators. The article also discusses regulatory adaptations such as sandboxes; the status of large-scale financial blockchain implementation projects; the emergence of "regtech"; international regulatory coordination efforts; self-regulatory structures; systemic risk considerations; and optimal regulatory design principles, given continuing market and product complexity. Fintech presents opportunities - like lower costs, enhanced product and service scope, greater credit and financial inclusion – and unique new risks (which are explored in detail in the article) as well as challenges for regulators, such as creating laws that accurately capture new technology and keeping pace with constantly evolving innovations. Regulators must also balance encouraging innovation and competition with effective risk management and supervision

Why Comparability is a Greater Problem than Greenwashing in ESG ETFS

This Article argues that comparability in environmental, social, and governance (ESG) exchange traded funds (ETFs) is a much greater problem than greenwashing. Rising demand for sustainable investment products in recent years has been met with an explosion in ESG ETF varieties, and numerous ESG-themed funds have captured massive capital inflows. There is little evidence, however, that deceptive “greenwashing” is widespread in ETFs. ETF issuers face significant reputational costs from such behavior, and there are effectively no consumer switching costs for hyperliquid, easily accessible ETFs. While nondeceptive practices of asset managers are observable in the zero-sum, highly competitive, asset management game of capturing new ESG-directed capital flows, the subjectivity that ETF issuers use to integrate ESG considerations into the composition of underlying ETF holdings is so disparate that investors face tremendous information acquisition and synthesis costs, and difficulty comparing products. This dilemma grows as product choice expands. ESG ETFs also create unique issuer and commercial index provider conflicts. An investor focused regulatory framework for ESG ETFs would aid comparability, standardization, and consistent product marketing presentation. To this end, this Article builds on the author’s prior work on comparative complexity in ETFs by advancing three immediate measures to improve comparability and facilitate more efficient capital allocation in ESG ETF varieties: first, require justification of a fund’s usage of ESG terminology in its name through specific ETF disclosures; second, standardize ESG measurement metrics; and third, mandate uniform information presentation layouts on ETF issuer websites

Assessing the Evolution of Cryptocurrency: Demand Factors, Latent Value, and Regulatory Developments

The purpose of this Comment is to analyze the roots of this fervor— including that which drove Bitcoin’s initial demand surge—and investigate whether cryptocurrency can survive a market bubble that experienced a significant correction in 2018

Could Alberta Enact a Sub-National Open Banking Regime?

Open banking is successfully operating, and has proved beneficial, in many countries.But Canada has not yet adopted it. Alberta doesn’t need to wait for the federal government to implement a national framework to benefit from this innovation. Using international precedent, this article charts a pragmatic course for how the province can immediately participate in the benefits of open banking, open finance, and consumer data portability, without requiring a complex sub-national regulatory and governance structure like the federal approach or expending scarce provincial policy resources. Using a market-facilitative approach, the province can utilize existing initiatives to takean accommodative and active advisory role to data portability use case development, foster market-driven use cases and industry partnerships through the Financial Innovation Act (FIA) regulatory sandbox, and utilize the existing Invest Alberta Financial Services Concierge to reduce frictions and barriers to market entry for data portability firmsand open finance entrepreneurs. Open banking creates a safer underlying ecosystem to share consumer financial data, develop data applications and new technology-driven financial products and services ina more secure way than screen scraping. This innovation promotes competition, enhances consumer product comparisons, lowers switching and transaction costs, creates new efficiencies, and allows financial product and service providers to tailor new customer offerings to individual needs. The federal open banking framework still has many implementation barriers, uncertainties, and frictions. Alberta can immediately develop expertise in consumer data portabilityby using the provincial regulatory sandbox established by the FIA. The FIA is a one ofa kind initiative in Canada. The FIA sandbox allows banks and fintech companies to develop and test data portability use cases under supervised parameters with regulatory relief. Provincial regulatory authorities can review the risks and benefits in real time, with real data. The province can potentially leapfrog the national framework by developing expertise through the FIA sandbox in data portability use cases beyond banking and relating to a financial product or service (the defined legislative scope of the FIA). Technological development and applications, fostered through the FIA, may have use value beyond banking and within a larger financial ecosystem, as well as in energy, utilities, consumer retail data, government housed data and self-sovereign digital identity solutions. The province can take three immediate steps under a market-facilitative approach.First, engage in public-facing educational efforts on the benefits, use-cases, processes, accessibility, functionality, and successes of the FIA sandbox as applied to data portability. This may include developing principles for safe data sharing, and recommended design standards and guidance. Second, in conjunction with the FIA, utilize and promote the Invest Alberta Financial Services Concierge service as a gateway to open banking partnerships and the FIA sandbox. Third, investigate how to create and implement a provincial consumer data right (CDR), which would serve as a catalyst in the province for a myriad of data-portability use cases beyond banking to an open-data paradigm, including applications in energy, investments, insurance, utilities, telecommunications, consumer retail and self-sovereign digital identify

Thresholds, breakpoints, and nonlinearity in freshwaters as related to management.

Nonlinear ecological responses to anthropogenic forcing are common, and in some cases, the ecosystem responds by assuming a new stable state. This article is an overview and serves as the introduction to several articles in this BRIDGES cluster that are directed toward managers interested in dealing with nonlinear responses in freshwaters, particularly streams. A threshold or breakpoint occurs where the system responds rapidly to a relatively small change in a driver. The existence of a threshold can signal a change in system configuration to an alternative stable state, although such a change does not occur with all thresholds. In general, a mechanistic understanding of ecological dynamics is required to predict thresholds, where they will occur, and if they are associated with the occurrence of alternative stable states. Thresholds are difficult to predict, although a variety of univariate methods has been used to indicate thresholds in ecological data. When we applied several methods to one type of response variable, the resulting threshold values varied 3-fold, indicating that more research on detection methods is necessary. Numerous case studies suggest that the threshold concept is important in all ecosystems. Managers should be aware that human actions might result in undesirable rapid changes and potentially an unwanted alternative stable state, and that recovery from that state might require far more resources and time than avoiding entering the state in the first place would have required. Given the difficulties in predicting thresholds and alternative states, the precautionary approach to ecosystem management is probably the most prudent

Histological and molecular characterisation of feline humeral condylar osteoarthritis

<p>Background: Osteoarthritis (OA) is a clinically important and common disease of older cats. The pathological changes and molecular mechanisms which underpin the disease have yet to be described. In this study we evaluated selected histological and transcriptomic measures in the articular cartilage and subchondral bone (SCB) of the humeral condyle of cats with or without OA.</p> <p>Results: The histomorphometric changes in humeral condyle were concentrated in the medial aspect of the condyle. Cats with OA had a reduction in articular chondrocyte density, an increase in the histopathological score of the articular cartilage and a decrease in the SCB porosity of the medial part of the humeral condyle. An increase in LUM gene expression was observed in OA cartilage from the medial part of the humeral condyle.</p> <p>Conclusions: Histopathological changes identified in OA of the feline humeral condyle appear to primarily affect the medial aspect of the joint. Histological changes suggest that SCB is involved in the OA process in cats. Differentiating which changes represent OA rather than the aging process, or the effects of obesity and or bodyweight requires further investigation.</p&gt