Australia and Japan establish framework for co-operation on FinTech innovation
The Japan Financial Services Agency (JFS') and Australian Securities and Investments Commission (ASIC) today announced the completion of a framework for co-operation to promote innovation in financial services in Japan and Australia.
This follows a recent similar agreement with the Hong Kong financial regulator in June 2017 and agreements signed during 2016 by ASIC with the Financial Conduct Authority from the United Kingdom, Monetary Authority of Singapore and the Ontario Securities Commission. In addition, ASIC has entered into information-sharing agreements with the Capital Markets Authority, Kenya and Otoritas Jasa Keuangan, Indonesia.
In addition, ASIC has informally met with numerous international FinTech businesses referred to us by industry or trade bodies, including delegations from the United Kingdom and the United States. The Co-operation Framework will enable the JFSA and ASIC to share information and support the entry of innovative FinTech businesses into each other's markets. JFSA and ASIC will be able to refer innovative FinTech businesses to each other for advice and support via ASIC's Innovation Hub and the JFSA's FinTech Support Desk. And they will be able to keep abreast of regulatory and relevant economic or commercial developments in each other's jurisdictions. This is expected to help to inform domestic regulatory approaches in the context of a rapidly changing global financial environment.
This Framework will help open up the important Japanese market for Australian FinTech companies. The Japanese economy is the third largest in the world, with services and financial services - account for around three quarters of GDP.
The JFSA has been actively involved in encouraging FinTech through a range of measures including the modification of the legal system to enable financial groups to invest in finance-related IT companies more easily and establishing a legal framework for virtual currency and Open API. This Framework will encourage Japanese FinTech start-ups to engage with innovative financial businesses globally.
A formal 'Exchange of Letters' ceremony between Australian Ambassador to Japan, the Hon Richard Court AC and State Minister of Cabinet Office, Takao Ochi, took place in Tokyo today to seal the Framework.
ASIC Commissioner John Price said, 'Japan has been a world leader in technology for a long time. As we move into a new era of financial regulation, we look forward to sharing experiences and insights with our colleagues at the JFSA.' Shunsuke Shirakawa, JFSA Vice Commissioner for International Affairs, said, “We are delighted to establish this Co-operation Framework with ASIC. ASIC is one of the leading FinTech regulators that actively promote FinTech by taking progressive actions including setup of the Innovation Hub. We believe that this Framework further strengthens our relationship and facilitates our co-operation in further developing our respective markets.”
ASIC launched its Innovation Hub in 2015 to help FinTech companies 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 and it helps ASIC to monitor and understand developments in the FinTech industry.
Several initiatives were announced in this year’s Australian budget for promoting FinTech innovation and growth, including include limitation on closely-held ownership in financial institutions, removal of restrictions on use of the word ‘bank’, eliminating double taxation of digital currency and introduction of an enhanced regulatory sandbox.
Access the co-operation framework here.