An agreement has been reached between the financial regulators of the UK and Australia that will result in support for fintech companies trying to enter each other’s market. According to the agreement, UK’s Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC) will both assist the other country’s innovative businesses that want to expand into their country. The regulators have also agreed to provide ongoing support to the businesses to help them in their dealings with the corresponding regulator.
Both regulators have set up Innovation Hubs which will assist these fintech businesses in handling the regulatory and authorization processes.
So far the Innovation Hub at FCA has helped over 200 businesses and facilitated 18 businesses to gain regulatory approvals while the ASIC has assisted 75 start-ups, helping 10 of them to get their licenses. The fintech industry in UK is estimated to have annual revenues of approximately $12.5 billion while in Australia the industry has revenues of nearly $1.3 billion.
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According to Christopher Woolard, director of strategy and competition at the FCA many companies rely on the UK as a market to launch their international operations and said that this agreement would provide the support required by these companies to grow internationally.
Greg Medcraft the chairman of the ASIC stated that the ASIC was focused on fostering innovation that helped both consumers and investors. Both regulators have also agreed to exchange information on critical industry trends and their effect on regulation.
In a statement, Greg Medcraft said,
Since ASIC launched its Innovation Hub last year we have seen a surge in requests by fintech startups seeking assistance about how to navigate the regulatory requirements. In particular we have dealt with robo or digital advice, crowd sourced equity funding, payments, marketplace lending and blockchain business models. We believe this agreement with the FCA will help break down barriers to entry both here and in the UK
Fintech businesses seeking support would need to qualify for first by meeting the eligibility criteria put down by their countries’ regulator. Once the business qualifies and is referred to the other regulator, a dedicated contact person will be assigned to it, who will then assist the business in getting an understanding of the regulatory framework, process and procedures along with all other requirements relevant to the registration process.
As a part of the assistance program, the company will be provided among other things access to expert staff and information on applicable special processes. The contact person would be available to the company for a period of twelve months.
