Canada Regulators: Open Data Is Crucial To Innovation
The paper is a product of the November “RegHackTO,” which was the first hackathon to be hosted by a Canadian securities regulator, as its name suggests. Over 120 people participated in the gathering, including high school students, programmers, affiliates of major financial firms, entrepreneurs, and lawyers. The objective of the event was to gain a better understanding of how technological innovations can strengthen and better modernize the OSC and Canadian fintech services sector.
Based on the results of the hackathon, the OSC was able to conclude that due to the high percentage of solutions that utilized Distributed Ledger Technology (DLT), “the technology is powerful and has the potential to increase efficiencies and transparency in capital markets.” According to Marueen Jensen, Chair and CEO of the OSC, the regulatory group is receptive to the idea of incorporating DLT into the financial sector.
“There is great potential for fintech to address real regulatory challenges, and RegHackTO gave us an unprecedented opportunity to witness this firsthand,” said Jensen. “But to support novel products, services and applications of benefit to investors, our regulatory approach needs to evolve. We must be open to new and sometimes uncharted ways of doing business.”
Moreover, OSC regulators believe that the ability to openly access data can benefit the greater good of both consumers and regulators. Making core information cooperatively available can essentially eliminate the need for duplicative forms and processes.
Based on the results of the Hackathon, the OSC will consider new ways to take a more flexible approach to DLT, which may include using DLT alongside other progressive technologies (artificial intelligence (AI), machine learning, and data analytics), consideration of ways to utilize technology like DLT in regulatory framework, and support for open access to data that increases fair competition.
In addition, the OSC is interested in the development of centralized KYC (know your customer) information collection and verification, and has taken an interest in collaborating with domestic and international regulators to support fintech development.