Alberta’s UCP government says finance technology companies need temporary relief from privacy and investment laws to give the province an edge in attracting business.
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Bill 13: Alberta proposes ‘regulatory sandbox’ for innovative financial technology firms
Edmonton Journal | | Mar 30, 2022
Alberta’s UCP government says finance technology companies need temporary relief from privacy and investment laws to give the province an edge in attracting business.
Finance Minister Travis Toews introduced Bill 13, the Financial Innovation Act, Wednesday, which if passed, will create a “regulatory sandbox” for financial services and financial technology, or fintech, companies.
Regulatory sandboxes are designed to make it simpler for companies to test new products and services that current security regulations were not designed to deal with, with a small set of customers.
See: BIS Report: Inside the Regulatory Sandbox: Effects on Fintech Funding
At a news conference earlier Wednesday, Toews said the government hasn’t received any specific proposals yet, but there is strong interest from businesses, including in the cryptocurrency, or decentralized digital currency, sector.
“These are going to be products that simply would not be otherwise offered without some type of exemptive relief,” said Toews, adding that relief will be limited to two years, with government oversight and consumer protection safeguards in place.
The province’s information and privacy commissioner will need to provide approval on a case-by-case basis, companies will need to get the express permission of customers before using specific personal information, and there would be fines for those who break the terms and conditions — up to $100,000 for the first offence, or up to $200,000 after that.
See: Alberta, The untold history of innovation from Canada’s badlands – Part 3
Koleya Karringten, executive director of the Canadian Blockchain Consortium, said at the government news conference:
“[bill 13] is a gamechanger [as] the current regulatory framework, it wasn’t created with cryptocurrency and additional service providers in mind. This legislation creates valuable space for development and market testing without the lengthy delays while Alberta laws catch up to our blockchain innovation.”
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RdnewsNOW | Mar 30, 2022
New legislation announced to spur innovation in finance sector
Officials say this proposed legislation signals that Alberta is willing to work with innovators and businesses that are developing cutting-edge products and technologies. The sandbox would be the first of its kind in Canada, say government officials, meaning financial services and fintech companies will have a strong incentive to move to Alberta. It’s anticipated to also benefit Albertans by opening the door to a wider variety of products and services, which could lead to more competition and lower costs for consumers.
See: Alberta Securities Commission adopts small business finder’s exemption | Proposes Corporate Opportunity Waivers
“Ensuring Alberta’s financial system is modern, competitive and stable is essential to strengthening and growing our economy,” stated Kate Hill, Chief Risk & Compliance Officer, Alberta Central. “Alberta credit unions support the government’s financial services regulatory sandbox and the significant potential it brings for innovation in our province’s financial services sector.”
If the Financial Innovation Act passes, each company participating in the sandbox will have to meet the following criteria:
- Physical presence requirement – Applicants would be required to maintain a physical presence in Alberta. For example, they will need to have an office in Alberta or staff living in Alberta.
- Financial services requirement – The sandbox would only be for companies that offer financial products or services.
- Innovation requirement – Applicants would have to adequately explain why each eligible product or service should be considered new and original, or at least how it is a new adaptation or material improvement of another product or service. Applicants would not receive exemptions for products or services that are already offered in Alberta by other companies.
- Business plan requirement – Applicants must provide a sound and viable business plan, including details for testing their financial product or service and plans to exit the regulatory sandbox.
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