Financial Crime World

LEBANON’S FINTECH REGULATORY LANDSCAPE: A GUIDE TO THE ISSUANCE AND REGULATION OF ELECTRONIC AND DIGITAL MONEY

As the fintech industry continues to grow and evolve, understanding the regulatory landscape is crucial for market participants. In Lebanon, the issuance and regulation of electronic and digital money are governed by a complex web of laws and regulations.

Crowdfunding and Peer-to-Peer Lending

Crowdfunding is regulated under Capital Markets Authority (CMA) Decision 3/2013. To commence operations, licensed institutions must:

  • Obtain a prior licence from the CMA
  • Meet specific conditions before commencing operations
  • Cooperate with the CMA’s monitoring duties
  • Prepare periodical reports
  • Refrain from providing financial advice or receiving deposits

Peer-to-peer lending, on the other hand, is not explicitly regulated in Lebanon. Lending activities are governed by:

  • Code of Money and Credit (13513/1963)
  • Banque du Liban (BDL) regulations

Licensed banks, financial institutions, or specialized lending entities must undertake lending activities.

Online Lending and Other Forms of Alternative Finance

Online lending activities are not explicitly regulated in Lebanon. However, they must comply with laws and regulations governing lending in general. Licensed institutions carrying out online lending activities must:

  • Adhere to conditions set by the BDL
  • Meet transparency requirements
  • Comply with anti-money laundering/counter-terrorist financing (AML/CFT) legislation

Forex

Forex is a regulated activity governed by the Forex Profession Law. To operate, licensed institutions must:

  • Obtain a permit from the BDL
  • Meet nationality restrictions on shareholdings
  • Maintain a special register documenting every transaction exceeding a certain threshold set by the BDL

Trading

Trading in securities is a regulated activity under CMA Series 2000. Licensed institutions must be established in Lebanon as a bank, financial institution, or financial intermediation institution and meet specific requirements.

Investment and Asset Management (Private Management)

Investment and asset management activities are regulated under various laws and regulations, including:

  • Collective Investment Schemes Law
  • Capital Markets Law
  • Financial Intermediation Profession Law

Licensed institutions carrying out securities business activities must:

  • Refrain from disclosing inside information
  • Engage in manipulative or deceptive acts

Conclusion

Lebanon’s fintech regulatory landscape is complex and nuanced, with various laws and regulations governing the issuance and regulation of electronic and digital money. Understanding these regulations is crucial for market participants seeking to operate in Lebanon. This article provides a comprehensive overview of the key activities in the fintech space, their corresponding regulations, and the legal issues associated with each.