Fintech Comparison Tool

5/2/23, 10:16 PM Fintech Comparison Tool - Dentons Publisher
FinTech Comparison Tool

Comparison of key points in selected jurisdictions
Disruptive technologies are transforming financial services. Since the internet revolution and the mobile
internet/smartphone revolution, financial technology has experienced explosive growth from the
emergence of e-money and smartphone transfers and depositing, crowdfunding initiatives, robo-advisors,
and cryptocurrencies, to name a few. Such ballooning activity has attracted the attention of incumbent
financial entities, tech-savvy startups, and regulators worldwide. When analyzing the progress of financial
technologies, different jurisdictions have different approaches: some are driven by market initiatives and
working within the current state of regulation for financial services, while others had enacted particular
rules for Fintech activities or even comprehensive pieces of law for the whole Fintech industry.
Dentons has developed a Fintech Tracker to provide you with the most updated information on financial
technology and a top-level overview of Fintech regulation across different regions so you may keep track
of this exciting industry.
Disclaimer: The contents of this tool have been prepared in good faith as introductory guidance. This tool
is not designed to provide legal or other advice. You should not take, or refrain from taking, action based
on its content. Please use your own professional judgment and seek independent legal advice in case of
questions
UK The Netherlands Cayman Islands
What are the Mixed-driven: The UK Mixed-driven: The Regulatory-driven: The

most significant has a very active Fintech Netherlands has an Cayman Islands has an
drivers of Fintech scene, and is a global active FinTech scene, active Fintech industry,
in your industry leader in the area. The with some FinTech and until recently, the
(market-driven / UK government is Unicorns, like Adyen and players in this market
regulatory-driven supportive of Fintech, Mollie. were subject only to the
/ mixed driven)? and a recent review The Dutch Government is standard Cayman
Please explain if noted that the UK an important FinTech Islands
there are Fintech scene represents promotor and presented banking/securities
particular 10% of the global market a FinTech Action Plan in regulations, including:
regulations for share and £11bn in 2020. This Action Plan (i) the Anti-Money
Fintech or revenue. has three pillars: Laundering Regulations
https://publisher.dentons.com/experience/fintech-comparison-tool?s=UK&s=The Netherlands&s=Cayman Islands&k=%7B"":%5Btrue,true,true,tr… 1/11

licensed There are no specific (i) Putting the Dutch (AML Regulations);
activities. regulations for Fintech; FinTech climate and (ii) the Securities
the existing UK sector on the map both Investment Business
legislative framework nationally and Act;
was not developed with internationally, by: (iii) the Mutual Funds
the regulation of crypto- a. Partnering abroad and Act; and
assets in mind. As the access to partners (iv) the Proceeds of
regulatory framework b. Access to capital; Crime Act.
under the Financial (ii) Good access to
During the course of
Services and Markets knowledge and talent for
2020, the Cayman
Act 2000 ("FSMA") is FinTechs, by:
Islands Government
technology neutral, the a. Improvement of
introduced amendments
Financial Conduct residence arrangements
to the above acts and
Authority ("FCA") has for key personnel of
regs to extend them to
applied existing startups
virtual assets and
legislation to crypto- b. Fiscal scheme to
enacted a new law called
assets as it would to make stock option rights
the Virtual Asset (Service
other financial products as remuneration more
Providers) Act (the VASP
and services. The attractive (note: the
Act). The VASP Act sets
existing regulatory recently announced Tax
out a framework for
framework on AML also Plan 2021 does not
regulating virtual asset
applies, contained in the address this objective
service providers
Money Laundering, yet)
(VASPs), following the
Terrorist Financing and c. Innovation hub and
Financial Action Task
Transfer of Funds central bank innovation
Force's
(Information on the forum;
recommendations, the
Payer) Regulations 2017. (iii) Regulation that is
global money-laundering
ready for the future and
oversight body.
offers room for
innovation, by: The VASP Law applies to
a. Removal of hurdles for any person providing
access to new virtual asset services,
technology and new which are defined as the
markets issuance of virtual
b. Proportionality in assets or the business of
legislation and providing one or more of
regulations for small the following services:
businesses and start-ups (i) the exchange between
c. Development of virtual assets and fiat
regulations regarding currencies;
innovative products and (ii) the exchange
services (e.g. fully between one or more
automated robo-advice) other forms of
d. Further harmonization convertible virtual
of financial services assets;
regulation and (iii) transfer of virtual
supervision. assets:

There is no specific (iv) virtual asset custody

regulation for FinTechs service; or
at this moment. There (v)
are however various participating/providing
licensing/authorisation financial services related
regimes for financial to virtual asset issuance
services that FinTechs or sale.
must observe.
Now all VASPs must, in
addition to complying
with the AML
Regulations and other
relevant acts, register
under the new VASP Act
before conducting
business. By mid-2021,
licenses will also be
required for any VASPs
that provide custodial
services of virtual assets
and/or operate a virtual
asset trading platform.
Such licenses will
necessitate a higher level
of scrutiny than simple
registration.
Who are the In the UK, the Financial In the Netherlands, there The Cayman Islands
relevant Conduct Authority are two supervisory Monetary Authority
supervisory ("FCA") and the authorities for the (CIMA) is the primary
authorities? Are Prudential Regulation financial market: the regulator of financial
they active Authority ("PRA") Dutch National Bank services in the Cayman
enforcers? supervise the financial (“DNB”) and the Dutch Islands and will oversee
market. Both are active Authority for the VASP registration and
and can apply formal Financial Markets licensing. CIMA is very
measures, including (“AFM”). The other active and can impose
substantial financial relevant supervisory substantial financial
penalties. Another authorities are the Dutch penalties on regulated
relevant authority is the Data Protection Authority entities of up to US$1
Payment Systems (“AP”) and the Dutch million.
Regulator ("PSR"). Authority for Consumers
The Cayman Islands is a
and Markets (“ACM”).
British Overseas
Those authorities are in
Territory, and as such, all
general rather active and
international financial
can apply a wide range
sanctions imposed by
the UK are applicable
and enforced here.
of formal measures Crowdfunding is not

(whereunder financial explicitly regulated in the
penalties). Cayman Islands,
although the existing
legislative regime
relating to capital raising
might apply depending
on the nature of the
specific business,
including:
(i) the Securities
Investment Business Act;
(ii) the Money Services
Business Act; and
(iii) the Mutual Funds
Act.
What are the Loan-based and Currently, crowdfunding Crowdfunding is not

current trends in investment-based is partly regulated by specifically regulated in
crowdfunding crowdfunding platforms Dutch national laws. If a the Cayman Islands
require regulatory platform is only active in although the existing
approval in the UK from the field of donation, legislative regime
the FCA under a sponsoring and/or relating to capital raising
regulatory regime reward-based might apply depending
brought in December crowdfunding, there is no on the nature of the
2019. The FCA regards need a licence or specific business,
investment-based exemption from the including:
crowdfunding as high- Dutch Authority for the (i) the Securities
risk investment activity Financial Markets Investment Business Act;
and will only allow firms (“AFM”) to perform the (ii) the Money Services
to promote activities. With the Business Act; and
crowdfunding offers to variants of loan-based (iii) the Mutual Funds
certain investors. The and equity-based Act.
regulation on loan-based crowdfunding, however,
crowdfunding focuses the company may be
on ensuring that subject to an exemption
consumers who might or a licensing
lend to individuals or requirement.
businesses have access
On 10 November 2020,
to clear information and
the Regulation on
some core basic
European Crowdfunding
consumer protections.
Service Providers
The FCA also regulates (“ECSP”) for business
payment services entered into force. After
provided in connection a transition period of 12
with donation-based months, the rules will

crowdfunding and pre- enter into application on

payment or rewards- 10 November 2021,
based crowdfunding. applying directly across
the EU. The initiative was
part of the European
Commission’s FinTech
action plan and the mid-
term review of the
Capital Markets Union
action plan.
The regulation lays down
uniform rules across the
EU for the provision of
investment-based and
lending-based
crowdfunding services
related to business
financing. It allows
platforms to apply for an
EU passport based on a
single set of rules, which
makes it easier for them
to offer their services
across the EU with a
single authorisation.
How are The UK implemented the The Netherlands has The Money Services Act
payments EU Revised Payment implemented the EU provides for licensing all
regulated? Services Directive Revised Payment Cayman-based non-
("PSD2") and has Services Directive banking money services
retained its provisions (PSD2). Based on this businesses and their
post-Brexit. Unless an directive, Dutch payment regulation under the
exemption applies, service providers need a Banking Supervision
Payment Service license from the Dutch Division of CIMA. Such
Providers ("PSPs") must National Bank (“DNB”), services include:
be authorised by the but there are certain (i) money transmission;
FCA. exclusions and there is (ii) cheque cashing;
also a small PSPs (iii) currency exchange;
Electronic money issuers
regime. and
("EMIs") must also be
(iv)
authorised to issue e- The main payment
issue/sale/redemption
money and undertake service is the receipt and
of money
payment services, under transfer of client funds,
orders/travellers
the Electronic Money but there are also newly
cheques.
Regulations 2011 (SI regulated payment
2011/99). services. It concerns the
payment information

Both PSPs and EMIs service and the account The activity of cross-
must also comply with information services. border payments
provisions in the FCA Authorised providers of (exchange control) is not
Handbook, which such services can have in itself a regulated
contains provisions free access to online activity.
about how firms should payment accounts held
Prepaid cards are not
e.g. handle complaints, by payment service
regulated.
and notify the FCA of users at banks. This
particular events. concept is known as
Open Banking.
The European
Commission is now
planning to open up
more type of accounts
(savings, mortgage,
investment etc) to third
party providers. Open
Banking will thus shift to
Open Finance.
What are the The FCA has created a Cryptocurrencies are as The VASP Act and
current trends framework by such not prohibited in related laws and
related to crypto- categorising crypto- the Netherlands, but a regulations described in
assets and e- assets based on their specific cryptocurrency section 1 above all apply
money? intrinsic structure and could fall under one of to cryptocurrencies and
designated use. the existing regulatory exchange platforms.
frameworks (e.g. qualify Besides, amendments to
Those crypto-assets that
as a financial the copyright, trademark,
amount to a ‘Specified
instrument). and patent laws have
Investment’ under the
been instituted to cater
Regulated Activities However, providers of (i)
to the Fintech industry.
Order ("RAO") and e- crypto exchange
money tokens are likely services and (ii) crypto The Cayman Islands is
to be regulated by the wallet services that host to a significant
FCA. Cryptocurrencies provide services in or number of crypto
are generally categorised from the Netherlands businesses, including:
as exchange tokens and must be registered with (i) investment funds
unregulated. The FCA DNB. This is based on investing in
has published guidance the implementation of cryptocurrency and
on which crypto-assets AMLD V (the fifth EU related technologies;
do and do not fall within Anti-Money Laundering (ii) companies
the regulatory perimeter. Directive). conducting successful
ICOs and token
On 7 January 2021, the
generation events;
UK government began a Also, the European
(iii) companies
consultation on the UK's Commission has
regulatory approach to published a proposal for

crypto-assets and a Market in Crypto- developing sophisticated

stablecoins. This Assets Regulation technology-based
consultation proposes (MiCA). This proposed products.
the introduction of a regulation caters for a
dedicated regulatory licensing-regime for
regime for stablecoins crypto asset service
which could reliably be providers.
used for retail or E-money is a regulated
wholesale transactions product. Dutch issuers of
(i.e. 'regulated stable e-money are subject to a
tokens'), including license by DNB, also
authorisation and subject to certain
systemic thresholds exclusions and a small E-
requirements. The new money issuers regime.
regime, which would not This part of Dutch law is
cover stablecoins that the implementation of
are already regulated as the European Revised E-
'specified investments', Money Directive (EMD2).
would affect issuers of,
and service providers in
respect of, those
'regulated stable tokens'.
HM Treasury began a
consultation in July 2020
on proposals to expand
the perimeter of the
financial promotion
regime to bring the
promotion of certain
types of unregulated
cryptoassets within its
scope.
Are there any No, UK residents may No, Dutch residents may No, Cayman Islands
restrictions for freely use or invest in freely operate in residents may freely
residents in your technological platforms technological platforms operate in technological
jurisdiction to located abroad. located abroad. platforms located
use/invest in abroad.
technological
platforms located
abroad?
What is the status The provisions of the The European General The Cayman Islands
of data protection European General Data Data Protection Data Protection Act (the
in your Protection Regulation Regulation (“GDPR”) “DP Act”) regulates all
jurisdiction? (“GDPR”) have been applies in the personal data

Explain if any retained in the UK after Netherlands as per 25 processing in the

open data or open Brexit, being May 2018. The GDPR Cayman Islands. The DP
banking incorporated in UK brought significant and Act is based on the 8
initiatives are domestic law. The GDPR substantial changes with internationally
available. brought significant and respect to the recognized privacy
substantial changes with processing of personal principles in the GDPR,
respect to the data. It introduced dealing with the
processing of personal several new concepts, processing of personal
data. It introduced such as privacy by data, data security, data
several new concepts, design, privacy by default breaches, and individual
such as privacy by and data portability. data subjects' rights.
design, privacy by The DP Act will apply to
Open banking is an
default, and data most financial sector
actual theme across
portability. entities in the Cayman
Europe and also in the
Islands, including VASPs.
Open banking is Netherlands. There is
relatively advanced in the also particular attention
UK and is organised from the Data Protection
through the Open Authorities on the
Banking Implementation processing of personal
Entity ("OBIE"), an data in the context of
organisation established open banking and
by the Competition and especially of so-called
Markets Authority silent party data.
("CMA"). Many major
banks use open banking.
The FCA is currently

consulting on changes to
policies on open banking
and strong customer
authentication, which are
aimed at promoting
innovation and
competition.
Provide a The UK has a mature The Netherlands The Cayman Islands is

snapshot of fintech market, which provides a mid-sized the leading offshore
investments in benefits from a positive market that is jurisdiction for
Fintech in your governmental attitude. In connected, allowing for investment funds and
jurisdiction. 2020, investment into UK speedy and efficient one of the world's top
Explain if there fintech stood at $4.1 connections with financial centers. The
are any billion. companies and government has been
government consumers. The Dutch very encouraging
On 26 February 2021, the
initiatives to are open-minded and towards fintech
UK government
boost investment adaptable, a sort of test initiatives that the VASP
published a report
in Fintech. kitchen for new FinTech Act and CIMA now
setting out "a strategy to
recipes. It’s therefore an regulate.
put the UK at the top of ideal place to test a new Cayman Islands vehicles'
the global fintech league service before taking it involvement in the
table". Proposals include global. blockchain is typical as
improving UK listings Most importantly for crypto funds, funds
rules with free float financial endeavors, the investing in blockchain
reduction and dual class Netherlands provides a projects, token issuers in
shares, creating a £1 stable regulatory system, the context of security
billion-pound fintech focusing on the safety token offerings (STOs) or
‘growth fund’ to help and protection of initial coin offerings
firms grow consumers. When it (ICOs), joint-venture
independently, and comes to transferring vehicles developing
establishing a private money, no word is more blockchain projects,
sector-led Centre for important than security, service providers such
Finance, Innovation, and and the Netherlands has as broker-dealers and
Technology to support it highlighted, bolded and custodians, and IP
national coordination underscored. holding vehicles.
and growth in fintech
The government
across the UK.
introduced a Special
Economic Zone (SEZ) to
encourage the
development of specific
industries, including
Fintech, by granting
incentives to those
wishing to relocate and
work in the Cayman
Islands. The SEZ has
over 250 companies, of
which 60 are blockchain-
focused.
What is on The FCA administers This really depends on Registration under the
average the time most types of licences, the type of license. For VASP regime will take 4
needed to obtain such as for consumer e.g. a payment services to 6 weeks after receipt
a license and credit activities and license, a period of one and filing of all
what are the issuing electronic year to one year and a information required.
costs? money. The FCA aims to half is an average term. Fees range from
make a decision on Fees payable to the US$4,000 to US$18,000,
complete applications regulator may vary, but the higher fees being
for authorisation within e.g. the fee for the payable by VASPs with
six months, and on payment services license projected revenue over
incomplete applications application itself are EUR US$500,000.
within 12 months. The 6.800, but additional fees
Licensing under the
fees for various types of apply for testing of
VASP regime is not yet
applications vary and are
formalized but will take
listed on the FCA's

website. For example, directors and holders of longer, possibly 2 to 3

the fee for a complex so-called qualifying months after receipt and
consumer credit holdings. filing of all information.
application, where a
business derives over
£1m in income from
consumer credit, would
be £15,000.
Cryptoasset businesses
carrying on crypto-asset
activity in the UK must
register with the FCA as
their anti-money
laundering and counter-
terrorist financing
supervisor. Applications
are assessed within
three months, and the
fee is £2,000 for
businesses with UK
crypto-asset income up
to £250,000, and
£10,000 for businesses
with income above that
threshold.
Questions?
Jonathan Arno Voerman Brian Patterson
Please Contact:
Garforth Dentons Europe Dinner Martin
Dentons UK and LLP Attorneys
Middle East LLP Partner Senior Counsel
Partner, Banking '+31 20 795 30 '+1 345 745 5008
& Finance 62 brian.patterson@
'+44 20 7320 arno.voerman@d dentons.com
3743 entons.com
jonathan.garforth
@dentons.com
Last updated: 15 April 2021 29 March 2021 31 March 2021
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5/2/23, 10:16 PM Fintech Comparison Tool - Dentons Publisher

UK The Netherlands Cayman Islands

What are the Mixed-driven: The UK Mixed-driven: The Regulatory-driven: The

https://publisher.dentons.com/experience/fintech-comparison-tool?s=UK&s=The Netherlands&s=Cayman Islands&k=%7B"":%5Btrue,true,true,tr… 1/11

https://publisher.dentons.com/experience/fintech-comparison-tool?s=UK&s=The Netherlands&s=Cayman Islands&k=%7B"":%5Btrue,true,true,tr… 2/11

There is no specific (iv) virtual asset custody

of formal measures Crowdfunding is not

What are the Loan-based and Currently, crowdfunding Crowdfunding is not

https://publisher.dentons.com/experience/fintech-comparison-tool?s=UK&s=The Netherlands&s=Cayman Islands&k=%7B"":%5Btrue,true,true,tr… 4/11

crowdfunding and pre- enter into application on

https://publisher.dentons.com/experience/fintech-comparison-tool?s=UK&s=The Netherlands&s=Cayman Islands&k=%7B"":%5Btrue,true,true,tr… 5/11

https://publisher.dentons.com/experience/fintech-comparison-tool?s=UK&s=The Netherlands&s=Cayman Islands&k=%7B"":%5Btrue,true,true,tr… 6/11

crypto-assets and a Market in Crypto- developing sophisticated

https://publisher.dentons.com/experience/fintech-comparison-tool?s=UK&s=The Netherlands&s=Cayman Islands&k=%7B"":%5Btrue,true,true,tr… 7/11

Explain if any retained in the UK after Netherlands as per 25 processing in the

The FCA is currently

Provide a The UK has a mature The Netherlands The Cayman Islands is

https://publisher.dentons.com/experience/fintech-comparison-tool?s=UK&s=The Netherlands&s=Cayman Islands&k=%7B"":%5Btrue,true,true,tr… 9/11

website. For example, directors and holders of longer, possibly 2 to 3

Last updated: 15 April 2021 29 March 2021 31 March 2021

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© 2023 Dentons (https://www.dentons.com). All Rights Reserved. Legal notices

https://publisher.dentons.com/experience/fintech-comparison-tool?s=UK&s=The Netherlands&s=Cayman Islands&k=%7B"":%5Btrue,true,true,t… 11/11

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