3FOOD

Third Industrial Revolution Consulting Group
products and services whatever the market/sector they are targeting when it
involves comparable risks. All companies should benefit from the same
opportunities and flexibility to innovate.
o Regardless of the location (the global dimension should be considered): because
the DSM should have a global dimension, it is also important to eliminate or reduce
the regulatory divergence with other non-EU countries such as the United States,
Asian countries etc.
• For example, regarding accounting rules for intangible assets, there are
different treatments between the EU and US concerning capital
requirements/consumption for investment in software. In accordance with
the International Financial Reporting Standards (IFRS) software should be
accounted as intangible assets and, as such, deducted from the “core capital”
of banks, while according to US Generally accepted accounting principles
(GAAP) accounting standards, software is considered a tangible asset as
“plant, properties and equipment” and hence not deducted from core
capital. This creates a competitive distortion between EU and USA banks.
• On data protection and data value chain: an uneven international playing
field in the storage of data via cloud computing can be observed. EU players
face certain geo-localisation and data privacy restrictions whereas US players
do not and are able to use data stored on the cloud all over the world. There
are also restrictions to the development of new digital business models in
the cloud, with a worldwide architecture, based on the exploitation of data
All companies offering similar financial products and services involving comparable risks,
whatever the market/sector they are targeting, should be submitted to the same rules (e.g.
AML/KYC) or offered the same flexibility as their competitors (e.g. prudential and compliance).
The Digital Single Market should insure a level playing field in the application of such measures.
EU policymakers should assess the opportunity of developing in Europe a regulatory
framework for experimentation such as e.g. regulatory sandboxes that would be open to
all innovative players. Given the huge potential for transformation, policymakers should be
encouraged to investigate new ways of providing regulatory flexibility testing innovative
products, services, business models and delivery mechanisms without immediately
incurring all the normal regulatory consequences of pilot activities, while at the same time
providing sufficient safeguards to consumers. Eligibility criteria would need to be the same
for all, both incumbents and new players.
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