ASIC has announced that it has signed a cooperation agreement with the Financial Conduct Authority (FCA) of the United Kingdom to assist innovative Fintech companies in Australia and the UK that wish to enter the other’s market. This is an interesting progression, and a first of its nature in the Australian FinTech arena.
The cooperation agreement consists of a framework for cooperation between the Innovation Hubs of each regulator whereby each regulator can refer to the other an innovator business seeking to enter the market of the receiving authority. The referrals will need to include information that shows that the innovator business seeking to operate in the other jurisdiction meets, or would meet, the eligibility criteria of their home regulator’s Innovation Hub. Following referral, the receiving authority’s Innovation Hub will offer support to the innovator business.
ASIC announced in March 2015 that it would establish an Innovation Hub to assist innovative Fintech businesses in navigating ASIC’s regulatory system. Its Innovation Hub liaises with Fintech experts through ASIC’s Digital Finance Advisory Committee. This follows on from the FCA’s Project Innovate in October 2014, which had the aim of encouraging innovation in financial services by supporting “innovator businesses”.
In line with this current framework, the cooperation agreement sets out the nature of assistance that the innovator business will receive once referred and ahead of applying for authorisation to operate in a new market. This includes a dedicated team/contact to assist with understanding the regulatory framework in the market they wish to join. During the authorisation process, the innovator business will be given access to expert staff and, where appropriate, a specialised authorisation process. The innovator business will also receive assistance up to one year following authorisation “as and when circumstances require it”.
The cooperation agreement also provides an undertaking by each party to share information about innovations (where appropriate). This information includes emerging market trends and developments and regulatory issues relating to innovation in financial services.
The cooperation agreement is in line with each regulator’s strategy to encourage disruptive innovation by reducing the barriers for authorised firms looking to grow overseas and to assist non-UK innovators in entering the market. The regulators say that they hope the cooperation agreement will be the “first of many” paving the way for greater international cooperation in this area.
To view the agreement, please click here .
