Established mutual fund companies may want to revisit with regulators the long-standing rules they must live by if they want to compete more effectively with fintech start-ups, a panel has suggested.

Mark Salvarinas, manager, operations at World Financial Group, speaking at a meeting of operations professionals on Nov. 16, said fintech companies have an advantage over established firms because they start from scratch and don’t have to accommodate legacy databases and products or use the same regulations as the traditional industry.

“This is a call to action for us to start lobbying our regulators and say maybe it’s time – not to break rules – but to talk about those rules and see if they are up to date. Maybe it’s time to revisit these rules and start making a case and say …it’s not fair that some organizations, because they’re categorized as a tech firm don’t have to play by the same rules as the rest of the industry.”

Fintech companies have different rules

Fintech startups are covered under the CSA Regulatory Sandbox, an initiative to support fintech businesses that want to offer innovative products. It allows them to register and/or obtain exemptive relief from securities laws requirements under a faster process than through a standard application so they can test their products, services and applications throughout the Canadian market on a time-limited basis.