A seed-stage fintech preparing to launch across the UK, the EU and the US needed to know how regulators in each market would view its product. Relace assessed both offerings, more than 70 screens plus every public-facing communication, and returned a complete map of the firm’s options in three business days.
Firm context
A seed-stage fintech designed an application that provides information to support equity, fixed income and commodities trades. This includes data and insights on companies and their securities, presented at the point of trading to both retail and professional customers.
The firm was preparing to fundraise to support a planned multi-market launch across the UK, the EU and the US. To inform their plans, the firm needed to understand how their activities would be viewed by regulators in each jurisdiction.
Working with Relace, the firm addressed this question and its implications in three business days. The assessment covered both the retail and the professional offering, and gave the firm a complete map of its licensing options, timelines, costs and the product implications associated with each possible approach.
Challenge: clarify regulatory status before a multi-market launch
For advisory solutions, defining the boundary between investment information, which is unregulated, and investment advice, which is regulated, is one of the fundamental questions. The extremes are clear: raw market data is information, and a recommendation to buy a named stock is advice. Much of the fintech market, however, sits between those two poles. Where a product sits is largely determined by design decisions that founders rarely think of as having regulatory implications, such as whether the application ranks or filters what it displays, whether two users see the same screen, or how directly a screen points towards execution.
For this firm, those granular product details matter, because they can carry differing implications across the UK, the EU and the US. Significant financial, resourcing and product decisions follow from the assessment if the product is to enter each market in a compliant manner. The firm also knew that investors would be looking for clarity in its answers to these questions, as geographic expansion would be core to any investment case.
Solution: assess the product, not its description
Regulatory status is ultimately determined by the nature of the product or service. A disclaimer does not change what a customer experiences or what they can do in an application. A thorough and accurate perimeter assessment must therefore be conducted against the product itself.
This is what Relace did. Relace reviewed every state of the application across both the retail and the professional offering, which amounted to more than 70 screens, and established what the user sees, what the screen directs the user towards, and what a reasonable user would take from it. The same assessment was applied to all public-facing materials: the website, the app store listing, the onboarding flow, in-application copy and sales collateral. Claims made about a service are themselves evidence of what that service is, and a communication made on a landing page can itself be a restricted act.
Relace then mapped the firm’s options in each market. This considered whether it was best to seek the relevant permission, to operate under an authorised firm’s licence, or to amend the product so that the requirement does not arise. Each route was set out with its cost, its required timeline, and the product development requirements and modifications it implied at the feature level.
Outcome: a clear set of options, in time to make adjustments
The full assessment was completed in three business days. This gave the firm time to consider its options, make the necessary adjustments to its plans, and enter fundraising conversations with greater clarity.
Conventional approaches rarely afford firms this opportunity. Assessments of similar scope can run from eight to twelve weeks, with the quality and depth of analysis varying across jurisdictions. Relace estimates that a budget of between £100,000 and £300,000 would be required to complete this work, based on average turnaround times and market rates. A three-day turnaround therefore represents a thirteen- to twenty-fold reduction in the time required.
The most important outcome is what that time enabled the firm to do. The assessment arrived while the product remained modifiable. A conventional timeline would have seen a substantial proportion of the mapped options closed off by the firm’s own development roadmap before delivery. Elapsed time removes options.
How Relace makes this possible
Much of perimeter analysis does not require novel judgement. The process requires establishing the nature of an activity, identifying the applicable regimes and assessing which obligations flow from them in the context of that activity. The volume of work required to execute these steps can be large, but the steps themselves are substantially similar across engagements.
Conventional approaches rebuild this process each time, to produce a static document.
Relace is built for this. Obligations map to a firm’s actual activities, every decision and document chains to the rule it addresses, and every rule links to its primary source. The routine component is not repeated, which frees up more time for the elements that genuinely require judgement.
The resulting assessment also does not expire. It becomes the record against which the application’s next screen, or its next public communication, is tested.