FINANCIAL TECHNOLOGY (fintech) players are hoping for legislation tailor-fit for the industry to address its issues.
Industry group FintechAlliance.ph said rules and requirements for traditional financial institutions are usually imposed on fintech firms “when jurisdiction lines are blurred.”
“Since policy preferences could be embedded in fintech through less onerous means, the reflexive application of old regulations to new tech is inefficient and self-defeating,” it said in an electronic copy of Unchartered Beyond, a manual about the industry released on its website.
FintechAlliance.ph said policy makers should adopt a calibrated “light touch” approach or the delineation of a “regulatory sandbox” for fintech.
“In the absence of a distinct legal regime for fintech, regulators may fall back on the norms applied to financial institutions. But issues of fit and consistency arise when taxonomies embodied in old laws are applied to new technologies,” it said.
FintechAlliance.ph said the industry is battling against overlapping jurisdictions, concepts not covered by existing classifications and some policy conflicts.
“Vigilance and prudence can be balanced with innovation at ratios that still champion public welfare,” it said.
In June, the group released a position paper on House Bill No. 6765 or the proposed Digital Economy Taxation Act which looks to slap a 12% value-added tax on digital advertising, internet-based subscriptions and transactions made on e-commerce platforms.
The group said the proposed levies will serve as a barrier to substantial capital investments in an environment when digital services take a while to be profitable. — LWTN