Banking and finance lawyers discuss disruption

by NZ Lawyer22 Jul 2016

by Mark Abernethy

The disruption created by new digital platforms has the potential to hit banking and finance the hardest, and it will be the lawyers expected to clean up the uncertainty, says convenor of the 34th Banking & Financial Services Law Association (BFSLA) conference, Simon Jensen.

President of the BFLSA and a Buddle Findlay Partner, Jensen says the conference of 200 in-house and big firm finance lawyers from Australia and New Zealand will be looking at the Disruption Eruption when they meet in Queenstown.

“A lot of the disruption models in financial services take out the middlemen, and in some case they skirt around regulators and jurisdictions,” says Jensen. “In many cases its our profession being asked to provide certainty in what is an evolving business.”

Jensen says he expects many speakers to cover blockchain issues – the technology that underpins cybercurrency such as Bitcoin.

“Blockchain technology has the potential to automate many aspects of financial services, including payments systems, stock exchanges and trade finance,” says Jensen. “In one trade on a stock exchange, there could be more than a dozen parties to that transaction. So blockchain can take out the middlemen, but then other legal and regulatory issues come up.”

He says he expects the BFLSA conference to also cover fintechs and their disruptive nature.

“Many entrepreneurs in this space don’t really like lawyers or regulators,” says Jensen, “because they see their apps as breaking free of all that stuff.”

He says a lot of the fintechs will stay small but some could grow from being too small to care, to too big to fail.

“Uber is an example,” says Jensen. “It starts as an idea on a smart phone and then it’s huge.”

He says capital-raising is going to be an issue with disruptive fintechs; public capital raising is one of the most regulated activities in a modern society and fintechs driving crowdfunding and P2P finance on smart phones will have to find a proper niche with regulators before it grows too large. He says ‘open source’ will also be an issue, as will ‘smart contracts’ and the issue on every lawyer’s lips: what is New Law and what does it mean for this profession?

The conference hosts keynote presenter, Lord Justice Briggs, speaking on Legal uncertainty in the financial markets: how can the courts assist? Sir Michael Briggs was lead judge for the Lehman insolvency litigation in London between 2009 and 2013.