Australian and UK governments have signed an enhanced cooperation agreement (the “Enhanced Agreement”) on FinTech innovation. Under the new Enhanced Agreement the Australian Securities & Investment Commission (“ASIC”) and the Financial Conduct Authority (“FCA”) will continue to refer innovative FinTech businesses to each other for advice and support via their respective Innovation Hubs. The Innovation Hubs are dedicated ‘avenues’ for regulatory assistance offered by both authorities. This Enhanced Agreement forms part of the broader fintech bridge signed by the UK Chancellor of the Exchequer and the Australian Treasurer and is the second cross-jurisdictional cooperation agreement for the FCA this year.
The Enhanced Agreement allows regulators to refer, to each other, Innovative Businesses that are financial businesses that have been offered support from an authority through its Innovation Hub, who want to enter the other’s market through their Innovation Hubs. Referrals will show that the Innovative Business seeking to operate in the other jurisdiction, meets the eligibility criteria of their home regulator’s Innovation Hub. Following referral, the receiving authority’s Innovation Hub will offer dedicated support to the Innovative Business, helping them understand the new regulatory environment and manage the authorisation process. After authorisation, the business will have access to the Innovation Hubs for a further year. The regulators will also be exploring ways to enable faster processing of authorisation for those businesses who are already authorised in the other jurisdiction.
In addition, the authorities have also agreed to share information on innovation in their respective markets. This includes information on emerging market trends and developments, and any regulatory issues relating to innovation, particularly in the financial services industry. Where possible they have agreed to conduct joint policy work to reach shared approaches and positions in key areas, to consider co-hosting FinTech and regulatory technology events and work together to raise topics or approaches of common interest at an international level to promote greater levels of international cooperation on financial innovation.
Building on cooperation agreements like this Enhanced Agreement, the FCA have also recently asked for views on the merits of creating a global regulatory sandbox, that could potentially allow firms to conduct tests in different jurisdictions simultaneously and allow regulators to work together. For more information on the global regulatory sandbox, please read our previous article here.
This Enhanced Agreement is great news for authorised firms looking to grow overseas as it actively seeks to reduce regulatory barriers to entry that can often be a heavy burden for start-up firms.
To view the press release by the FCA please click here.
To view the Enhanced Agreement please click here.
For more information on how business can enter into the market, Cleveland & Co external in-house counsel, your specialist outsourced legal team are here to help.