Implications of Germany’s Draft Electronic Securities Regulation for RegTech and SupTech
ZWIRN Working Paper-ZWP/2020/3
31 Pages Posted: 1 Dec 2020 Last revised: 27 Sep 2021
Date Written: September 14, 2020
This paper documents implications of Germany’s draft regulation on electronic securities for RegTech and SupTech. Regulation of electronic securities or a dematerialized system should not only serve the development of the private sector, FinTech and RegTech for regulatory compliance but also serve the public sector, namely support RegTech for regulators and SupTech for financial supervisors. Electronic securities have the potential to increase operational efficiency and accuracy both in compliance and supervision, namely, corporate governance, audit, and surveillance by deploying RegTech and SupTech systems. Digital transformation in the financial sector should include considerations in line with the digital finance requirements, such as closing the technology gap between the private and public sectors and managing asymmetric technology risks. Germany’s draft regulation is a strong signal for digital transformation in Germany; however, it does not foresee a fully dematerialized system, a prerequisite for well-designed RegTech and SupTech systems.
Keywords: Asymmetric Technology, BaFin, Blockchain, Crypto Securities, Cyber Risk, Dematerialization, Digitalization, Digital Transformation, DLT, Electronic Markets, Electronic Securities, FinTech, Germany, Green Blockchain, RegTech, Regulatory Risk, SupTech, Sustainable Finance.
JEL Classification: G23, G28, G30, G38, K22, O31, O32, O38
Suggested Citation: Suggested Citation