Clements says the course is a seminar with 16 students, mostly 3Ls.While other fintech classes in Canada focus on business and public policy, Clements’ is the only one that focuses on the law, he says.
“The unique side of it is its breadth and the fact that it is regulatory focussed,” he says.
As for assignments, Clements says students will write a paper on a current fintech regulatory issue and profile a fintech company from the perspective of a lawyer advising the company, he says.
“I’m intentionally making it very experiential,” he says.“…So they’re already in the mindset directly of advising on this type of matter.”
Clements began his career working in investment banking in Edmonton, after an economics degree from the University of Alberta.Then he went to law school, graduated and worked at Davies Ward Phillips & Vineberg LLP in Toronto, and then Blake Cassels & Graydon in Calgary.He’s still called in both Ontario and Alberta.After working at another couple mid-sized firms, he transitioned to academia, starting as an adjunct professor at the U of A.He became interested in fintech while teaching a course on entrepreneurial law related to start-up companies.
“It’s where my interest in fintech germinated,” he says.“The intersection of securities – which I did at the early stage in my career in big law – and then startups, which I gravitated to before I went back to academics.”
He took an LLM at Duke and then started his doctorate.
In 2019 he took a job at the Alberta Securities Commission as a senior policy advisor, mostly consulting on crypto-currency, particularly crypto-asset trading platforms.He then became a full professor at the U of C and still consults the Securities Commission.
In August, 2019, Clements published a paper with the U of C School of Public Policy Publications called “Regulating Fintech in Canada and the United States: Comparison, Challenges and Opportunities.” He says the class is heavily influenced by his research into the differences and similarities in fintech regulation between Canada and the U.S.
According to Clement’s paper, much of the difference is attributable to Canada having a principles-based financial regulatory structure, while the U.S.is generally rules-based.While in the U.S., fintech “has the potential for displacing banks and established financial institutions,” in Canada, the big banks are driving fintech due to high barriers-to-entry, and because the banks tend to gobble up start-up fintech firms, Clement’s paper states.
As a result, consumer-facing fintech companies are more prominent in the U.S.With Canadian banks adopting fintech, new risks such as cybersecurity and customer data vulnerability arise.
Fintech outside the infrastructure of established banks present different challenges: “increased moral hazard in peer-to-peer lending,” increased systemic risk as transactions hit hyper-speed and the potential for market crashes in certain sectors or asset classes as algorithmic advice forms herds of investors, the paper states.
As for decentralized fintech innovations, Bitcoin and other digital currencies and capital-raising processes, such as initial coin offerings, also present challenges to regulators, the paper states.
“[The class] is primarily going to be focused on the regulatory dynamics and then some of these larger questions about systemic risk and regulating the financial system as a system, instead of just agency-to-agency rules,” he says.Related stories Fintech in Canada: Will the disruptors be disrupted? Free newsletter The Canadian Legal Newswire is a FREE newsletter that keeps you up to date on news and analysis about the Canadian legal scene.A separate InHouse Edition is delivered every two weeks, providing targeted news and information of interest to in-house counsel.Please enter your email address below to subscribe.SIGN UP.
