March 9, 2021
7 minutes of reading
Comments expressed by Businessmen the contributors are their own.
Significant policy changes and post-Brexit reform of London’s listing regime are set to spark a ‘digital big bang’ in the UK in an effort to boost the burgeoning fintech industry in the country – according to a recent review commissioned by the government.
The report, published in February 2021, highlights that Brexit regulatory uncertainty and growing global competition could undermine the UK’s position as a leader in fintech world unless action is taken.
The assessment was carried out by former Worldpay director Ron Kalifa and is one of the government mandated numbers to help solidify the UK’s position in the world of finance and technology.
When everything stood still, The United Kingdom is a European leader on the number of companies operating in the fintech sector and fintech efforts are just beginning. However, the complications arising from Brexit could lead to Britain and countries like Germany and France losing their status as one of the world’s favorite destinations to set up fintech efforts.
Both the finance and technology sectors are under greater pressure from rivals since the UK withdrew from the European Union in early 2021, but may Brexi may provide a little more freedom to transform the country into an even more compelling prospect to sustain and build on the support of the burgeoning fintech industry.
With Global fintech revenue is expected reaching more than $ 300 billion by 2022, there are plenty of reasons behind the UK prioritizing its fintech industry as an important area to retain businesses and strive to attract young companies. young. Let’s take a closer look at how the UK leverages the burgeoning fintech market after Brexit.
Passport for Fintech.
The UK government will use a visa program targeting fintech professionals in an effort to fill any emerging gaps in the industry’s workforce as a result of Brexit’s inability to continue. access to an important EU skill base.
The move has been welcomed by the fintech industry, in which many players have been concerned about reaching out to skilled workers before the end. Brexit process.
According to one Sunday Telegraph Reported, Prime Minister Rishi Sunak will soon announce plans to help the UK fintech sector retain the talent it needs to continue to become a world leader in the industry.
It is hoped that the fintech visa program will help the UK position itself as a thriving site for fintech unicorns to thrive. After leaving the EU, the UK lost the automatic rights of professionals across Europe working in the country. At the same time, many highly skilled European workers have left the UK due uncertain climate and negative motivated by Brexit.
With the global competition for fintech talent in the industry, cities like London face new competition from European destinations such as Berlin, Barcelona and Amsterdam – which are becoming increasingly popular among fintech specialists have the right to work across the EU.
This exodus is exactly what the UK is seeking to prevent, and the danger posed by the situation has been underscored by Ricky Knox“Tech visas are a great thing and necessary if we want to maintain a competitive technology and fintech sector,” said the chief executive at fintech bank, Tandem. “More than half of our developers come from outside the UK and some have left due to Brexit.”
Room for storing cryptocurrencies.
Another aspect of the review has called for the UK to revise its approach to crypto asset regulation as a means of welcoming more fintech businesses in the future.
Recent restrictions by UK regulators regarding a ban on the sale of cryptocurrency derivatives and an anti-money laundering registry have created a somewhat hostile environment for fintech businesses. blockchain itself or decentralized finance set up camp in London.
The review indicates that other markets are driving the development of crypto-specific frameworks, like the Market propositions in the EU’s crypto assets. It also stated that the UK needed to act quickly to reconsider its positions on these issues before competitors began to overtake the tech hub.
“A regime dedicated to crypto assets should adopt a neutral approach to functionality and technology, consistent with the principles of the existing regulatory framework, as well as the concept of“ co-risk, same rules “, at the same time adjusted to suit risks arising from activities related to crypto assets,” the report stated clearly. “It must also be flexible enough to deal with future challenges – such as how Decentralized Finance (DeFi) should be regulated.”
In addition, the review also recommends that the UK continue to participate Global financial innovation network – a working group of country regulators – and a future leader in cryptocurrency policy and regulation.
One particular area that could benefit the UK is decentralized finance, better known as DeFi. In a market that has grown from under $ 1 billion to around $ 40 billion in less than a year, the fintech around DeFi applications are built on cryptocurrency Blockchain could be the key to ensuring sustainable growth as technology continues to change the financial landscape.
The rise of IPO.
The government has also identified public listing as an important way to help create better financial stability. Prime Minister Boris Johnson is said to have met CEO from Deliveroo, Revolut and other technology companies to persuade them to list on the London Stock Exchange.
Again, recent reports propose to reduce the share of shares in the hands of public investors to avoid dilution. early supporters fintech startups – as well as a ‘gold stock’ stock structure or a dual categorical structure that could allow founders to retain greater control over their company and remain safe from the acquisition of the enemy.
This call to reform the list in London may have come at the ideal time, as companies like Deliveroo, Wise and Darktrace are all rumored to launch in 2021. Elsewhere, other companies as Revolut, OakNorth and Checkout.com have found themselves. mid-time of IPO speculation as the valuations of finance and technology firms have increased following the Covid-19 pandemic.
This move could attract a significant level of investor interest in London. Although many IPOs today focus on institutional investors, there are companies that can allow individuals to participate in initial public offerings that otherwise would otherwise be inaccessible. . Freedom Holding Corp. (FRHC), a company listed on NasDaq, has a platform called Freedom24, which Individual may apply to participate in the IPOs of their choice – albeit at a financial threshold of at least $ 2,000.
There are more traditional organizations like Fidelity also provide Public participation – however, is only at a much higher threshold of between $ 100,000 and $ 500,000 in household wealth.
Another traditional platform is TD Ameritrade, owned by the giant Charles Schwab Group (SCHW), which allows participation in IPOs for selected account holder. However, this threshold is quite high. To be eligible for an IPO, your account must be worth at least $ 250,000 or you must have completed 30 transactions in the past 3 months.
True value of these IPO listed in London can be found in the UK’s plans to build its appeal as a post-Brexit fintech paradise. With a continuing buzz around financial technology and more relevant regulations, 2021 is seen as a pivotal year in the fight to keep talent off these shores to lure the EU.