15 March, 2017
Banks, insurers and other financial businesses experimenting with financial technology (fintech) stand to benefit from a new collaboration between the UK's Financial Conduct Authority (FCA) and the Financial Services Agency of Japan (JFSA), an expert has said.
On Thursday, the FCA and JFSA agreed a mutual referral system which will see the regulators provide assistance to fintech businesses that wish to expand UK operations into Japan, or vice versa.
The collaboration, which was confirmed by an exchange of letters, will also facilitate information sharing between the regulators on emerging market trends and regulatory issues pertaining to fintech, as well as information concerning referrals.
Last month, the FCA put in place a similar agreement with the Ontario Securities Commission (OSC) in Canada. The FCA also has cooperation agreements in place with the Hong Kong Monetary Authority (HKMA) as well as regulators in Australia, Singapore, South Korea, and China.
"It is easy to be critical and ask for more from the regulators but through these arrangements the regulator is breaking new ground," said fintech expert Luke Scanlon of Pinsent Masons, the law firm behind Out-Law.com. "It is certainly not the norm, either in finech or financial services more generall. Businesses within a number of sectors are crying out for it from an international perspective."
"Fundamentally this has to be the right thing to do from the FCA, especially in the context of a post-Brexit environment. It is the best way UK businesses can engage in non-EEA jurisdictions. It is good to see they are thinking beyond the usual suspects of Hong Kong and Singapore, and looking to other significant growing G7 economies to what can be done," he said.
Fintech regulatory cooperation agreements that do not involve the FCA have also emerged. Earlier this week, the Monetary Authority of Singapore (MAS) and Abu Dhabi Global Market (ADGM) agreed to cooperate on developments and initiatives that nurture fintech, entrepreneurship and support innovation in financial services in both countries.
For further information, please contact:
Ian Laing, Partner, Pinsent Masons
ian.laing@pinsentmasons.com
