LLAW6287 & JDOC6287

General Course Information

1.1 Course details

Course code: LLAW6287 / JDOC6287
Course name: FinTech Finance
Programme offered under: LLM Programme / JD Programme
Semester: First
Prerequisites / Co-requisites: No
Credit point value: 9 credit / 6 credits
Cap on student numbers: 40

1.2 Course description

The course will appraise the impact of financial and information technologies on banking and other financial services providers, as it closely follows the legal and regulatory developments in equity and debt finances in Hong Kong and globally leading FinTech hubs.

The course will focus on financial technology (FinTech) and regulatory technology (RegTech), used increasingly by financial institutions and their regulators to enhance regulatory compliance in and supervision of a sophisticated and fast-changing financial sector. A major part of the course syllabus will involve the systematic analysis of the emerging opportunities brought about by open banking for both traditional and challenger banks, virtual banks and their business model(s) and the Hong Kong Monetary Authority’s Open API Framework for the Hong Kong Banking Sector. To that end, the course will also highlight the challenges faced by banking institutions, including traditional banks and virtual banks, in complying with the Personal Data (Privacy) Ordinance, the key data protection law in Hong Kong. In this regard, the thematic focuses will be on (1) data protection law in the digital banking era, in general; and (2) data governance in the implementation of open banking, in particular.

Other special focuses of the course include equity and debt-based crowdfunding, denoting a tripartite relationship among the crowdfunding platform (CFP) operator, the fundraiser (i.e. the company that raises funds through the CFP) and the investors (crowdfunders). Behavioural economics postulates that not all investors are rational, including both unsophisticated individual investors and sophisticated institutional investors (such as mutual funds, pension funds and insurance companies). Regulation may thus be used to impose on the issuer (i.e. the company that raises funds by issuing securities) a duty to disclose information about its business plan and finance forecast with a view to curbing the lemon problem. Likewise, investors must prove their financial eligibility to be allowed to invest in equity crowdfunding. In general, the securities sector is characterised by consumer protection and an investor-disclosure system.

The course will shed light on the legal and regulatory requirements, along with supervisory and policy measures, towards FinTech alternative finance at both local and international levels. Requirements, measures and standards set by international regulatory bodies such as the Global Partnership for Financial Inclusion, the G20, the OECD, the Financial Stability Board and the Bank for International Settlements will be closely examined. Combining supervisory approaches—for instance, the principle-based approach and the cost-benefit approach—with academic approaches, the course will promote and enable technical, theoretical, comparative, and interdisciplinary studies for students who are interested in or preparing to enter a FinTech-related career. The course is also practical and industry focused, reflecting on and closely following industry reports such as KPMG’s annual banking and anti-money laundering reports, along with Deloitte’s RegTech and FinTech survey reports. Designed to enhance creativity, critical thinking and deep learning, the course will foster an intimate understanding of regulations and policies on FinTech, RegTech and SupTech. Topics and issues covered in this course are diverse and wide-ranging and will include financial inclusion and digital financial inclusion, the digital banking model (implemented by virtual banks, which are also known as digital banks), FinTech and RegTech (with subordinated themes such as Sandbox, Open Banking, Application Programming Interface and Wealth Management Technology), P2P Lending, Equity Crowdfunding, Payments and Payment Technology (including Central Bank Digital Currency and Stablecoins).

The course will first introduce FinTech innovations such as blockchain, artificial intelligence, robo adviser solution and big data, all of which are exemplary of information technology, followed by an exploration of the types of FinTech-enabled products and payment services such as crowdfunding and P2P lending, and ending with a forward-looking approach in tackling some critical and timely issues related to FinTech including, but not limited to, financial democratisation, improving access to financial system, sharing economy, data governance and control and privacy protection for consumers.

1.3 Course teachers

Name E-mail address Office Consultation
Course convenor Emily Lee eleelawhku.hk CCT 613 By email

Learning Outcomes

2.1 Course Learning Outcomes (CLOs) for this course

CLO 1 Critically examine the legal, economic and entrepreneurial implications of digital banks (including their licensing requirements and operation/business models), the open banking API framework, and the opportunities and risks of crowdfunding. Exploration of these concepts will help bridge the gap of understanding between the functional roles of FinTech and RegTech and their respective developments.

CLO 2 Describe and explain various FinTech-enabled financial services and payment methods, including (‘equity-based’) crowdfunding, (‘debt-based’) P2P lending, and third-party mobile and online payment platforms (e.g. Alipay and Paypal), all of which are exemplary innovations to the development of alternative investments and the evolution of private equity and venture capital.

CLO 3 Demonstrate an awareness of FinTech’s impact on the design of optimal regulation for financial innovation in capital raising and the pursuit of financial regulatory objectives, which include, but are not limited to, encouraging financial inclusion, safeguarding financial stability, preserving market integrity, maintaining consumer protection and promoting and ensuring fair market competition.

CLO 4 Apply interdisciplinary knowledge and cross-sector research skills; for example, applying economic behavioural theories in the economic analysis of law to critically examine (1) the risks associated with internet-based investments or business financing; (2) the legal aspects of artificial intelligence, particularly in view of the privacy protection law that governs the collection and storage of individual consumer’s personal data by financial services providers.

CLO 5 Understand, from a comparative law angle, the impact of FinTech on banking and securities laws in the post-2008 global financial crisis era in major FinTech countries and jurisdictions (e.g. the US, the UK, China, Singapore and Hong Kong) that are characterised by financial innovation, consumer protection and an investor-disclosure system.

2.2 LLM and JD Programme Learning Outcomes (PLOs)

Please refer to the following link:

LLM – https://course.law.hku.hk/llm-plo/

JD – https://course.law.hku.hk/jd-plo/

2.3 Programme Learning Outcomes to be achieved in this course

PLO A PLO B PLO C PLO D PLO E PLO F
CLO 1
CLO 2
CLO 3
CLO 4
CLO 5

Assessment(s)

3.1 Assessment Summary

Assessment task Due date Weighting Feedback method* Course learning outcomes
Class participation Presentation: 9 Oct, 5 & 12 Nov 2021 20% 1, 2, 3, 4, 5
Research paper 10 Dec 2021 80% 1, 2, 3, 4, 5
*Feedback method (to be determined by course teacher)
1 A general course report to be disseminated through Moodle
2 Individual feedback to be disseminated by email / through Moodle
3 Individual review meeting upon appointment
4 Group review meeting
5 In-class verbal feedback

3.2 Assessment Detail

To be advised by course convenor(s).

3.3 Grading Criteria

Please refer to the following link: https://www.law.hku.hk/_files/law_programme_grade_descriptors.pdf

Learning Activities

4.1 Learning Activity Plan

Seminar: 3 hours /week for 12 teaching weeks
Private study time: 9.5 hours / week for 12 teaching weeks

Remarks: the normative student study load per credit unit is 25 ± 5 hours (ie. 150 ± 30 hours for a 6-credit course), which includes all learning activities and experiences within and outside of classroom, and any assessment task and examinations and associated preparations.

4.2 Details of Learning Activities

To be advised by the convenor(s).

Learning Resources

5.1 Resources

Reading materials: Reading materials are posted on Moodle
Core reading list: TBA
Recommended reading list: TBA

5.2 Links

Please refer to the following link: http://www.law.hku.hk/course/learning-resources/