H.R. 3690: Securing Innovation in Financial Regulation Act

The bill, known as the Securing Innovation in Financial Regulation Act, proposes to establish two key initiatives aimed at enhancing the regulation and understanding of financial technology. The main components of the bill include the creation of a Strategic Hub for Innovation and Financial Technology within the Securities and Exchange Commission (SEC) and the codification of LabCFTC within the Commodity Futures Trading Commission (CFTC).

Strategic Hub for Innovation and Financial Technology

This portion of the bill mandates the SEC to set up a new committee, referred to as FinHub, within 180 days of the bill's enactment. The purpose of this hub is to:

• Serve as a resource for the SEC on advancements in financial technology.
• Engage with market participants who are developing new financial technologies.
• Facilitate communication between the SEC and companies operating in emerging financial technology sectors regarding the SEC’s regulations and processes.

FinHub is expected to provide an annual summary to the SEC about its activities, which will be included in the SEC's annual report to Congress. These reports will not contain confidential information.

LabCFTC

The bill also seeks to formally establish LabCFTC as part of the CFTC. This initiative is designed to:

• Promote responsible innovation in financial technology and ensure fair competition for the public.
• Act as an information mechanism that informs the CFTC about new financial technology developments.
• Provide outreach to innovators in financial technology to discuss their advancements and regulatory concerns.

LabCFTC will have a director, appointed by the CFTC, who will report directly to the commission and oversee various functions. Additionally, LabCFTC will be responsible for advising the CFTC on rules concerning financial technologies, providing internal training on such technologies, and engaging with academic and professional entities to discuss relevant issues.

Similar to FinHub, LabCFTC is required to submit an annual report to the relevant congressional committees, including details about meetings held, issues discussed, and actions taken to improve CFTC services. Confidentiality requirements will also apply to the reports generated by LabCFTC.

Implementation Timeline

The bill stipulates that the CFTC must implement these amendments within 180 days after the bill becomes law, ensuring a prompt establishment of the organized structures for financial technology engagement.

Relevant Companies

• GS (Goldman Sachs Group, Inc.): As a major financial services firm, Goldman Sachs could be significantly affected by regulations emerging from the SEC's initiatives, especially in areas of fintech investment and advisory services.
• AMZN (Amazon.com, Inc.): With Amazon's involvement in payment services and fintech solutions, new regulations stemming from this bill may directly impact its financial technology strategies and operations.
• COIN (Coinbase Global, Inc.): As a cryptocurrency exchange and wallet platform, Coinbase may face direct implications from the SEC's guidance on financial technologies and innovations in the cryptocurrency space.
• V (Visa Inc.): Being a leading payment technology company, Visa's operations might be influenced by regulations concerning fintech advancements and competition in the payment processing sector.