FFCON21 Breaking Barriers May 11-13, 2021

Category Archives: Research

Review: Financial Consumer Agency of Canada (FCAC) submission to Advisory Committee on Open Banking

FCAC | March 2021

FCAC review 2nd around of open banking consultation - Review:  Financial Consumer Agency of Canada (FCAC) submission to Advisory Committee on Open Banking

Overview

The Financial Consumer Agency of Canada (FCAC) is a federal financial sector regulator, which oversees federally regulated financial entities’ compliance with consumer protection measures, promotes financial education, and raises consumers’ awareness of their financial rights and responsibilities. In addition, FCAC is responsible for monitoring and evaluating trends and emerging issues that may have an impact on consumers of financial products and services, as well as providing timely and objective information and tools to help consumers navigate financial products and services.

The Advisory Committee on Open Banking (the Committee) shared consultation materials with interested stakeholders, including the FCAC, in fall of 2020.  FCAC welcomes the opportunity to participate in the development of a uniquely Canadian open banking solution that prioritizes the right of the consumer to control their financial data and puts in place safeguards to ensure they are protected from financial and non-financial harm. This submission has been submitted to the Committee for their consideration in the context of their consultations.

See:  NCFA OpEd: Canada’s Open Banking Consultations: Let’s Get it Done!

FCAC is broadly supportive of a hybrid model for open banking that carves out specific roles for government and industry and sets out the building blocks outlined in the Committee’s consultation  materials.  FCAC supports the Committee’s advocacy of a framework centred on several core consumer outcomes:

  • Consumer data is protected;
  • Consumers are in control of their data;
  • Consumers receive access to a wider range of useful, competitive and consumer friendly financial services;
  • Consumers have reliable, consistent access to services; and
  • Consumers have recourse and redress when issues arise.

We strongly recommend adding a sixth core consumer outcome: Consumers benefit from consistent consumer protection and market conduct standards. Based on experiences in other jurisdictions, consumer confidence is necessary for the success of open banking. A core outcome related to market conduct and consumer protection should be explicitly stated to provide assurance to consumers and as a signal to the industry.

This would include the following base level requirements: clear, simple, and not misleading language; no coercion or tied-selling; express consent; and a robust complaints-handling system which prioritizes a fast and seamless process for the consumer.

See:  Digital IDs Help Open Banking Reach Its Fullest Potential

It is inherent in the Committee’s consultation materials that consumers will have meaningful protection; FCAC recommends that the sixth core consumer outcome be added to reinforce this foundational principle. This central focus on consumer issues is critical to enable adoption of open banking and also needs to be ongoing – consumer protection must be embedded in every stage of accreditation, implementation, and in the governance and maintenance of any open banking system. Consumers should continue to receive at least the same level of protection that they currently enjoy, including in terms of liability protection. For example, today consumers are not held liable for unauthorized transactions on their debit and credit cards, provided that they have taken reasonable care to protect their information. FCAC believes that similar protections should apply in the open banking framework.

FCAC recognizes that the time to act is now and acknowledges the positive role that open banking can play in the future Canadian economy. We agree that the risks of the status quo (i.e., screen scraping) will lead to adverse outcomes for consumers.

FCAC has already warned consumers of these risks through a consumer alert and will continue educating consumers on open banking as implementation moves forward. To that end, FCAC plans to publish additional consumer education web content on open banking and fintechs in early 2021.

Summary of Recommendations

FCAC’s consumer protection mandate is exercised in two principal ways: 1) we oversee regulated entities’ compliance with consumer protection provisions, and 2) we educate consumers to improve their knowledge, skills, and confidence in making financial decisions. As a result, FCAC is well-positioned to contribute to the design and implementation of an open banking framework. The following are the main recommendations and issues that FCAC believes would merit further consideration by the Committee.

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Consumer protection / market conduct standards and consumer recourse

  1. Incorporate legally binding consumer protection and financial inclusion requirements into the accreditation criteria from the outset (e.g., fair access to financial products and services; the requirement and verifiable ability to provide financial redress; policies and procedures related to effective complaint handling; express consent for data sharing and how consumer data will be used; and, communicating product and system disclosures in a manner that is clear, simple and not misleading). These requirements should trigger enforcement actions when non-compliance occurs.
  2. Invest in a national awareness and education campaign focused on open banking to ensure consistent and unbiased messaging to consumers that does not select winners and losers. This campaign should be jointly funded by the industry and government and be coordinated by a respected authority who will employ evidence-based practices. FCAC has the experience and mandate to contribute to and coordinate such a campaign.
  3. Apply stricter accreditation and implementation programs for firms seeking write access. Write access carries greater risks for consumers than read access and therefore should only be allowed when the framework is established and operating effectively.
  4. Apply a liability framework that ensures a single, seamless consumer experience, which does not put the onus on the consumer to navigate the attribution of liability, and provides fast redress / reimbursement for consumers.
  5. Designate a single external complaints body (ECB) for open banking activities and afford the ECB binding resolution authority.

See:  Global Risk Institute Report: Discussing Open Banking Regulation for Canada

Oversight

  1. Careful consideration must be given to the delineation of the role, scope and authority of both the accreditation body and the implementation entity.
    1. It may be appropriate for the accreditation body to be industry-led and responsible for technical standards, particularly in relation to accreditation criteria. It will be important to ensure that consumer issues are adequately represented within this body.
    2. The implementation entity should be a regulator or be under the oversight of a regulator or other appropriate government body. The implementation entity needs to be set up in a way that is transparent, prioritizes consumer interests and protection, and manages conflicts of interests.
  2. Appropriate government oversight of both bodies will be fundamental to consumer confidence, particularly if the accreditation or implementation entity is afforded the authority to establish and enforce rules.  Close monitoring will be required to ensure that the rules and their application do not advance business interests at the expense of consumer protection.

Data access

  1. Given that open banking-type activities are already present in Canada (e.g., screen-scraping), immediate direction is required during the interim period while a framework is developed. This direction should include expected commitments/roles for government and industry, guidance on interim liability allocation and access to redress, how consumer protection will be incorporated, and a sunset date for screen-scraping.
  2. The open banking framework should include barriers to prevent firms performing similar functions from operating without accreditation and under different rules (i.e., by continuing to use screen-scraping).
  3. Reciprocity should be driven by consumer consent; firms should not require reciprocal data access in order to provide a product or service.

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NCFA Jan 2018 resize - Review:  Financial Consumer Agency of Canada (FCAC) submission to Advisory Committee on Open Banking The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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United States: Virtual Currencies Regulatory Overview (and Comparative Guide)

Bull Blockchain Law LLP via Mondaq| Andrew Bull and Tyler Harttraft  | Feb 22, 2021

virtual currency regulation in the US - United States: Virtual Currencies Regulatory Overview (and Comparative Guide)

In broad terms, which legislative and regulatory provisions govern virtual currencies in your jurisdiction?

In the United States, federal and state regulations and laws govern virtual currencies. While the US Congress has proposed federal legislation over the last two years, Congress has yet to pass any form of legislation directly addressing virtual currencies. Instead, governmental agencies – such as the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network (FinCEN) – provide guidance through reports and administrative decisions.

See:  Lagarde Says Her ‘Hunch’ Is That ECB Will Adopt Digital Currency

Additionally, US federal courts continually create precedent by applying traditional authoritative statutes through judicial determinations regarding virtual currencies. Overall, a significant portion of the regulatory provisions governing virtual currencies in the United States are from:

  • guidance released by a governmental agency;
  • case-by-case administrative decisions by a governmental agency; and
  • federal and state court rulings.

Which legislative and regulatory provisions govern entities that provide services relating to virtual currencies? Must they be registered or licensed by a regulatory authority?

Companies that issue digital securities must either register with the SEC or find an exemption to the Securities Act of 1933. This typically involves filings with the SEC.

Companies conducting virtual currency transmission are considered a ‘money service business' under the Bank Secrecy Act, and therefore must register as a money service business with FinCEN. Depending on the specific business that the entity conducts, it may also need a money transmitter licence in the state in which it conducts business. For example, Coinbase, one of the largest cryptocurrency exchanges in the world, has money transmitter licences in every state.

See:  Fed Chair Jerome Powell Says Digital Dollar is a High Priority Project

Any company dealing in virtual currency futures in the United States must typically register with the CFTC as a futures commission merchant. This is governed by the Commodity Futures Act.

Which bodies are responsible for enforcing the applicable laws and regulations? What powers do they have?

The SEC, the CFTC, FinCEN and the Internal Revenue Service are all federal agencies that possess the administrative power to enforce regulations against entities operating under their respective authority. This authority stems from the federal acts that grant each agency the authority to regulate. In other words, if a company violates a regulation that falls under the authority of one of the governmental agencies, that agency can bring federal administrative proceedings against the entity.

Federal and state courts deal with judicial issues arising in the industry. Courts have the ability to made judicial rulings and set precedent, depending on the court.

The US Congress has yet to provide any legislation in the virtual currency industry.

State legislatures have passed legislation that addresses different aspects of the virtual currency industry.

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What is the regulators' general approach to virtual currencies?

The approach is mixed, for lack of a better term. It wholly depends on the governmental agency. For example, the SEC – considered the most active agency regarding virtual currencies – takes an ad hoc approach to issuing fines and punishing companies that violate the Securities Act. In contrast, the CFTC, which possesses similar powers to the SEC in the futures trading context, have not issued nearly as many administrative rulings.

Overall, the United States is considered a strict jurisdiction for conducting virtual currency business, due to the significant amount of regulations and various governmental agencies that each company must consider.

Has there been any notable enforcement action relating to virtual currencies?

Yes. The most recent – and certainly the highest-profile – case to date involves enforcement actions against San-Francisco-based Ripple Labs Inc, the company behind XRP. In December 2020 the SEC filed a complaint alleging that Ripple – along with Brad Garlinghouse and Chris Larsen, both Ripple executives – had raised $1.3 billion in capital for Ripple by selling over 14.6 billion XRP tokens through an unregistered security offering. This case is ongoing.

See:  Canadian researchers develop CBDC digital currency proposal for Bank of Canada

In 2019 the SEC determined that Block.one had violated the registration provisions of the federal securities laws and required the company to pay a $24 million civil monetary penalty. Block.one consented to the order without admitting or denying its findings.

Overall, the SEC has charged around $175 million in total fines to date, while the CFTC has levied about $23 million in fines and other charges.

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NCFA Jan 2018 resize - United States: Virtual Currencies Regulatory Overview (and Comparative Guide) The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Gemini launches education platform Cryptopedia

Gemini | Feb 18 2021

Cryptopedia - Gemini launches education platform Cryptopedia

We are thrilled to announce the launch of Cryptopedia, a free resource that provides open-access, high-quality crypto education to the world.

Our mission at Gemini is to empower the individual through crypto and we believe that journey begins with understanding. We know that the lack of comprehensive education around crypto is one of the main barriers to entry and adoption for consumers — which is where Cryptopedia can help.

See:  Toronto-based DeFi fintech, Ledn, closes 3rd seed round $3.4 million CAD to scale its Bitcoin-backed lending platform

Cryptopedia caters to all levels of knowledge and interest — from the crypto-curious to the crypto-native. You can get started with the fundamentals of Bitcoin, take a deep dive into the hottest projects in DeFi, explore how trading and investing concepts apply to cryptocurrency, or learn about cybersecurity best practices to keep your crypto safe.

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NCFA Jan 2018 resize - Gemini launches education platform Cryptopedia The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Economic performance associated with digitalization in Canada over the past two decades

Stats Canada | Huju Liu | Feb 24, 2021

labour productivity covid recovery stats can - Economic performance associated with digitalization in Canada over the past two decades

Introduction

While Canada has embraced digital technologies rapidly and broadly over the past two decades, there is no doubt that the adoption of digital technologies has been amplified and accelerated as a result of the COVID-19 crisis. A massive number of people have transitioned to remote work. Consumers have had to turn to online platforms to purchase merchandise. Business have had to use online platforms to sell their products and services and serve their customers facing mobility constraints. Wide digital adoption has leaped forward several years in a matter of weeks during the COVID-19 crisis (Baig et al. 2020), and these changes are likely here to stay even after the pandemic (UNCTAD 2020; Bloom 2020).

Economic performance associated with digitalization

The digitally intensive sector experienced higher growth in labour productivity over the past two decades than the non-digitally intensive sector (Chart 1)

From 2002 to 2019, labour productivity grew 22.1% cumulatively in the digitally intensive sector, compared to 6.3% in the non-digitally intensive sector. During the first decade up to 2009, labour productivity grew modestly in the digitally intensive sector, by about 6%, while it basically remained flat in the non-digitally intensive sector. While labour productivity had a larger decline due to the 2008 crisis in the digitally intensive sector, the rebound afterward was also stronger in the same sector. Since 2009, labour productivity growth accelerated in the digitally intensive sector, with an annual growth rate of 1.4% compared to 0.7% in the non-digitally intensive sector.

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The digitally intensive sector has also been more resilient during the COVID-19 crisis than the non-digitally intensive sector (Chart 2). While the COVID-19 pandemic has had negative impacts on both sectors, the impact on the non-digitally intensive sector has been more severe than that on the digitally intensive sector.

For the months of March to May 2020, employment declined on a year-over-year basis by 12.9%, 30.2% and 25.6%, respectively, in the non-digitally intensive sector, compared to 1.1%, 11.3% and 9.7%, respectively, for the digitally intensive sector.

Similar patterns have been found for the gross domestic product (GDP) growth. GDP declined on a year-over-year basis by 18.1% and 13.8% in April and May, respectively, in the non-digitally intensive sector, compared to 11.8% and 10.3% in the digitally intensive sector.

Both sectors have rebounded since June 2020. By September, employment in the digitally intensive sector returned to its 2019 level while the GDP was only slightly lower. However, the employment in the non-digitally intensive sector was still 7.8% below its level of the same month in 2019 and GDP was 5.3% lower.

Conclusion

Over the past two decades, digitalization in Canada appears to have benefited Canadian industries. While the evidence may not suggest a causal relationship, it does suggest digitalization is associated with a higher labour productivity growth. During the COVID-19 pandemic, the industries that have adopted digitalization more intensively experienced a much smaller negative impact and were more resilient, which likely is a result of the flexibility and adaptability brought by digitalization (e.g., digital infrastructure or platforms already in place, higher telework capacity [Deng, Morissette and Messacar 2020]).

See:

The COVID-19 crisis is likely to have a long-lasting effect on the way we work and do business, and digitalization is likely to become even more important during the recovery and for future growth. It is important to ensure a wider and more even adoption and diffusion of digital technologies among businesses by improving managerial quality, workers’ ICT skills and the quality of worker-to-job matches (Andrews et al. 2018).

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NCFA Jan 2018 resize - Economic performance associated with digitalization in Canada over the past two decades The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Canadian researchers develop CBDC digital currency proposal for Bank of Canada

York University | Feb 16, 2021

Poonam puri york university CBDC proposal - Canadian researchers develop CBDC digital currency proposal for Bank of CanadaA proposal submitted to the Bank of Canada by a team of academic researchers from Osgoode Hall Law School and the University of Toronto (U of T) on what a central bank digital currency framework could look like in Canada has been selected as one of three proposals to be developed by the bank into a full report.

The bank is undertaking research to potentially launch a digital currency alongside the country’s banknotes, and invited universities to play a role in this innovation by entering the Model X Design Challenge.

The challenge was meant to encourage the development of “foundational ideas” for a central bank digital currency business model and system architecture (known as “Model X”), according to the bank. While no decision has been taken to issue a central bank digital currency, the Bank of Canada notes “it is working to design and develop one, along with a business model, as a contingency.”

A central bank digital currency is a digital unit of payment, comparable to digital coins such as Bitcoin, but that is issued and backed by a central bank as opposed to a private network. It has similar characteristics to cash, but instead of keeping it in a physical wallet you keep it in an online wallet that you can access using your cell phone or another electronic device. Its digital features make it a good alternative to traditional payment methods, such as credit or debit card payments.

In addition to the U of T/YorkU submission from Osgoode Professor Poonam Puri and University of Toronto Professors Andreas Veneris and Fan Long (Department of Electrical and Computer Engineering, and Department of Computer Science) and Andreas Park (U of T Mississauga’s Department of Management and the Rotman School of Management); the Bank also selected submissions from teams at McGill University and the University of Calgary.

See:  The Good, the Bad and the Ugly of Central Bank Digital Coins (CBDCs)

Each team was awarded a project fee to put toward the research competition, and the work of the team had to be a business school and computer science department collaboration.

The U of T/YorkU contingent worked on their overall model and recommendations as a team, but the technical components of their analysis were led by Veneris, Long and Park, with Puri focusing primarily on the legal, governance and policy implications of their design recommendation.

“We are recommending the implementation of a brand new currency/payment system, which obviously raises a number of novel legal issues and policy choices," said Puri, who is an expert in corporate governance, corporate law and securities law.

Puri said their legal analysis focused on four main issues.

  1. First, whether the Bank of Canada has the authority to issue a new digital currency, or if any amendments are required to its governing legislation (the Bank of Canada Act) to permit it to do so.

2. Second, consideration of the ideal regulatory framework to regulate participants in the new digital payments network.

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3. Third, how payment intermediaries would fit within anti-money laundering and counter terrorist financing (AML/CFT) laws.

“Canada has made a conscious effort in recent years to update its AML/CFT regulations and we wanted to make sure that our recommendation fits within the AML/CFT regulatory landscape to ensure that any central bank digital currency can’t be used as a vehicle for illegal activities.”

4. The fourth consideration was privacy.

“We prioritized privacy in order to ensure that any central bank digital currency closely resembles the privacy benefits that currently accompany traditional cash payments,” Puri said.

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NCFA Jan 2018 resize - Canadian researchers develop CBDC digital currency proposal for Bank of Canada The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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GameStop Testimony: When Short Sellers, Social Media, and Retail Investors Collide

Cato Institute | Jennifer J. Schulp | Feb 18, 2021

retail investors want to participate - GameStop Testimony:  When Short Sellers, Social Media, and Retail Investors Collide

By no means should the GameStop phenomenon result in changes that restrict retail investors’ access to the markets.

Before the Committee on Financial Services, U.S. House of Representatives

Introduction

Chairwoman Waters, Ranking Member McHenry, and distinguished members of the Committee on Financial Services, my name is Jennifer Schulp, and I am the Director of Financial Regulation Studies at the Cato Institute’s Center for Monetary and Financial Alternatives.

See:  Retail investors are becoming more than shareholders

I thank you for the opportunity to take part in today’s hearing entitled, “Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide.”

Watch the testimony C-span here:

Retail Investing

Before addressing the GameStop phenomenon specifically, I’d like to address the participation of retail, or individual, investors in our public equities markets.

Retail participation has ebbed and flowed over the years, but the recent trend toward increased retail participation accelerated sharply during the pandemic. Approximately one-fifth of market trading volume is now attributable to retail orders, which is a substantial increase over 2019.1

Most commentators point to the increasing availability of zero-commission trading as drawing in more individual investors. In late 2019, many large brokerages began offering zerocommission trading, following the lead of Robinhood Financial, which introduced commissionfree trading in 2015. But several other factors also likely attracted retail investors, including the widespread availability of fractional-share trading,2 the ability to open accounts with low balances, and the ease of app-based trading platforms. Even limited entertainment options during the pandemic probably played a role in increased retail interest in investing.

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Retail participation in our equities markets is important and beneficial. Retail investors are widely understood as providing liquidity in markets. The fact that retail investors behave differently from institutional ones, and sometimes behave differently from each other—far from being a bad thing—can be particularly valuable in times of market stress. Where institutional liquidity dries up, for example, retail trading can help to lower bid-ask spreads and dampen the price impact of trades.3 In fact, retail investors may have been a market-stabilizing force during the March 2020 coronavirus-induced market crash by staying the course with their investments and buying when stock prices dipped.4

Investing in the stock market also provides an important path to wealth for individual investors.

With average annual returns for the S&P 500 during the past 60 years of approximately 8%,5 long-term investors generally benefit by being invested in the market.

There is already a strong degree of retail participation in the U.S. stock market; when measured in 2018, approximately 38% of total U.S. equities were held directly by households.6 However, only 15% of U.S. households directly hold stock.7 In other words, ownership of equities is concentrated in the hands of the comparatively few and comparatively wealthy.8

Even if you include pooled investment funds, which is how the vast majority of households indirectly hold stocks as a part of their retirement assets, ownership is still skewed towards the wealthy. In 2019, about 53% of all households had stock market investments, but only 31% of families in the bottom half of the income distribution were invested.9

Stock ownership is also highly correlated with race, education, and age.10 For example, in 2019, approximately 19% of white households directly held stock, compared to approximately 7% of Black households and 4% of Hispanic households.11 Those with a college degree are about twice as likely to directly hold stock than those who just had some college education, and more than three times more likely than those with only a high school diploma.12 And the older a person is, the more likely he or she is to own stock.13 These patterns equally apply to ownership of indirectly held stock.

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The retail investors making up this new surge, though, are different. Data released by brokerage firms identifies a high number of new clients who are first-time investors and who are younger than the average investor.

This is confirmed by recent research by the FINRA Investor Education Foundation and NORC at the University of Chicago (“FINRA/NORC Study”), which found that investors who opened a taxable investment account for the first time in 2020 were younger, had lower incomes, and were more racially diverse than those who had previously opened such accounts.15 These new investors also held lower account balances, with about a third holding account balances less than $500. Indeed, the ability to invest with a small amount of money was a commonly cited reason for opening an account for the first time in 2020.

This may portend, as one of the researchers noted, “a shift towards more equitable investment participation.”

GameStop Phenomenon

Some things seem clear. Importantly, the temporary volatility in GameStop and others did not present a systemic risk to the functioning of our markets.

As the Treasury Department recognized, following a meeting with officials from the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission, the Federal Reserve, and the Federal Reserve Bank of New York, the market’s “core infrastructure was resilient during high volatility and heavy trading volume.”21

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This is not surprising. Despite the huge trading volume and rapid increase in value, the GameStop phenomenon affected a very small part of the market. GameStop’s market capitalization, even at its peak, was around $24 billion in an approximately $50 trillion market.22

And short interests, which may have been targeted by some traders, represent a small, and recently shrinking, portion of equity market value.23

Stock prices move in and out of alignment all the time, and markets are no strangers to bubbles.

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NCFA Jan 2018 resize - GameStop Testimony:  When Short Sellers, Social Media, and Retail Investors Collide The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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Penrose Report: Power to the People: Stronger Consumer Choice and Competition

UK Government | Feb 16, 2021

power to the people John Penrose report on competition and consumer choice - Penrose Report:  Power to the People:  Stronger Consumer Choice and Competition

An independent report by John Penrose MP on ways to improve consumer protection and promote competition.

Digitisation is transforming almost everything for the better, by making things cheaper, faster and more convenient. But there are downsides to these otherwise wonderful changes, caused by firms with enormous new network and digital data monopolies, which hurt customers in several ways.

See:  U.S. and States Say Facebook Illegally Crushed Competition

Most of our existing consumer-protection rules already work well enough and don’t need to be changed. But there are three important gaps where post-Brexit Britain’s legal framework still allows consumers to be ripped off, and where our protections need to be stronger:

  • Loyalty penalties and price discrimination, where people are charged different prices forthe same things.
  • Rip-offs hidden in the small print of long and complicated contracts that no-one has timeto read.
  • ‘Nudging’ people the wrong way (called ‘sludge’)."

See: 

Building on the government’s existing competition policy direction, as the UK looks to forge new relationships with the EU and other international partners, how can the UK’s competition regime best:

  1. Play a central role in meeting the challenges of the post COVID-19 economy and in driving the recovery?
  2. Contribute to the government’s aim of levelling up across all nations and regions of the UK?
  3. Increase consumer trust, including by meeting the 2019 Manifesto commitment to tackle consumer rip offs and bad business practices, and by ensuring the competition regime operates in a way which is strong, swift, flexible and proportionate?
  4. Support UK disruptors taking risks on new ideas and challenging incumbents?
  5. Make best use of data, technology and digital skills which are vital to the modern economy?"

Download the Power to the People Penrose report (70 page PDF) --> here

 


NCFA Jan 2018 resize - Penrose Report:  Power to the People:  Stronger Consumer Choice and Competition The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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CONGRATULATIONS TO THE 2020 FINTECH DRAFT PITCHING AND DEMO COMPANY WINNERS!



FFCON20 Pitching and Demo Winners - Penrose Report:  Power to the People:  Stronger Consumer Choice and Competition



NCFA COVID 19 letter to government to support Fintechs and SMEs - Penrose Report:  Power to the People:  Stronger Consumer Choice and Competition

NCFA Newsletter subscribe600 - Penrose Report:  Power to the People:  Stronger Consumer Choice and Competition