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18-083MR British and Australian regulators strengthen cooperation on fintech through Enhanced Cooperation Agreement
The United Kingdom’s Financial Conduct Authority ('FCA') and ASIC have signed an Enhanced Cooperation Agreement between their Innovation Hubs to extend their existing agreement of cooperation and coordination on fintech innovation. This agreement forms part of the broader Fintech Bridge signed by the UK Chancellor of the Exchequer and the Australian Treasurer.
In this enhanced agreement, the FCA and ASIC have agreed to explore ways to quicken the licensing process in terms of the authorisation of innovative businesses that are already authorised in the other jurisdiction. Where a business is a participant in either Authority's regulatory sandbox and would like to enter the other's, ASIC and the FCA will endeavour to facilitate that participation.
ASIC and the FCA will also look to co-host fintech and regtech events, conduct joint policy work, research and experimentation and explore secondment opportunites. They will work to raise topics or approaches of common interest at an international level to promote greater levels of international cooperation on financial innovation.
Signing the enhanced Agreement, ASIC Commissioner John Price said, 'ASIC and the FCA have developed an immensely beneficial relationship on fintech, including through our quarterly information sharing calls. We are delighted this extension will offer fintechs the opportunity to spread good ideas across borders. We will work together to raise topics and approaches of common interest at an international level.'
Christopher Woolard, FCA's Executive Director of Strategy and Competition, said,
'Today's enhanced agreement underscores the FCA's and ASIC's commitment to a deeper level of cooperation on Fintech. Cooperation between regulators is a vital part of helping innovative businesses across international jurisdictions to flourish and bring their products to market for the benefit of consumers. Back in 2016 when we signed the original agreement with ASIC, we stated that we hoped that it would be first of many to come. I am pleased to say that this has certainly been the case.'
Under this new agreement ASIC and the FCA will continue to refer innovative fintech businesses to each other for advice and support via their respective Innovation Hubs.
Building on cooperation agreements such as the one signed today with ASIC, the FCA also recently asked for views on the merits of creating a global sandbox. This could potentially allow firms to conduct tests in different jurisdictions at the same time and allow regulators to work together and identify and solve common cross-border regulatory problems. The FCA will consider all feedback received, discuss the concept with international regulators such as ASIC and expects to provide a further update in due course.
ASIC’s Innovation Hub
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, in addition to the Enhanced Cooperation Agreement with the FCA, fintech referral and information-sharing agreements have been entered with the Monetary Authority of Singapore, Canadian regulators, Hong Kong Securities and Futures Commission, the Japan Financial Services Agency, Malaysia Securities Commission, Switzerland’s Financial Markets Authority, Dubai Financial Services Authority and Abu Dhabi Global Market’s Financial Services Regulatory Authority. In addition, information-sharing agreements have been entered with the Capital Markets Authority (Kenya), the China Securities Regulatory Commission and Otoritas Jasa Keuangan, Indonesia.
Australia – UK Fintech Bridge
In order to strengthen cooperation, the UK and Australian Governments have decided to establish a UK-Australia Fintech Bridge, that includes building on the existing Cooperation Agreement between the FCA and ASIC.
This UK-Australia Fintech Bridge is signed by the UK Chancellor of the Exchequer and the Australian Treasurer. It establishes a framework for individual arrangements between relevant government and private sector parties from the UK and Australia to support further cooperation on fintech and regtech activities.
This Fintech Bridge sets out the framework for the ongoing cooperation between the UK and Australia on fintech issues, covering four inter‑related Pillars:
- Trade and investment
This Fintech Bridge will:
- enable closer and stronger collaboration on fintech between governments, financial regulators and the industry; and
- encourage fintech firms to use the facilities and assistance available in the other jurisdiction to explore new business opportunities and reduce barriers to entry.