The Hong Kong Securities and Futures Commission ('the SFC') and ASIC today signed a Co-operation Agreement which provides a framework for cooperation to support and understand financial innovation in each economy.
This Cooperation Agreement builds on the already close ties between ASIC and the SFC, as well as the Australia-Hong Kong trade and investment relationship more broadly. Hong Kong is already Australia's seventh most important destination for services exports, valued at AUD$2.4 billion last year, and sixth largest source of services imports, valued at AUD$3 billion.
The agreement will enable the SFC and ASIC to refer innovative fintech businesses to each other for advice and support via ASIC's Innovation Hub and its Hong Kong equivalent, the SFC's Fintech Contact Point. This means Australian fintech businesses wishing to operate in Hong Kong will now have a simple pathway for engaging with the SFC, and vice versa.
The Innovation Hub and Fintech Contact Point offer assistance to innovative fintech businesses to understand the regulatory regimes in each of their jurisdictions.
Signing the Agreement, ASIC Commissioner Cathie Armour said, ‘Financial services are a major contributor to Hong Kong's US$316 billion economy. The Cooperation Agreement is a significant boost for Australia's burgeoning fintech sector and will ease entry into this important market for innovative Australian businesses.'
The agreement also provides a framework for information sharing between the two regulators. This will enable ASIC to keep abreast of regulatory and relevant economic or commercial developments in Hong Kong and to use this to inform Australia's regulatory approach.
This is the fourth fintech referral agreement ASIC has entered into, following on from agreements with the United Kingdom, Singapore and Ontario. This agreement with Hong Kong expands our network of fintech cooperation to a critical financial hub in our region.
ASIC is focused on the vital role that fintechs are playing in re-fashioning financial services and capital markets. In addition to developing guidance about how these new developments fit into our regulatory framework, in 2015, ASIC launched its Innovation Hub to help fintechs navigate the regulatory framework without compromising investor and financial consumer trust and confidence.
The Innovation Hub provides the opportunity for entrepreneurs to understand how regulation might impact on them. It is also helping ASIC to monitor and understand fintech developments. ASIC collaborates closely with other regulators to understand developments, and to help entrepreneurs expand their target markets into other jurisdictions.
To date, fintech referral and information-sharing agreements have been entered with the Monetary Authority of Singapore, the United Kingdom’s Financial Conduct Authority and Ontario Securities Commission. In addition, information-sharing agreements have been entered with the Capital Markets Authority, Kenya and Otoritas Jasa Keuangan, Indonesia.
For more on the work of ASIC’s Innovation Hub including our current regtech report visit the Innovation Hub website.