The Financial Conduct Authority (FCA), a U.K. regulatory body, has entered into a co-operation agreement with the Securities and Futures Commission (SFC), its equivalent in Hong Kong, in order to foster greater collaboration in support of global financial technology (fintech) innovation.
The deal will make it easier for fintech firms to enter one another’s respective markets. The FCA and SFC will co-operate on information sharing and referrals involving fintechs so that firms that have been approved in the UK can set up business more easily in Hong Kong and vice versa.
A similar agreement was signed with the Hong Kong Monetary Authority (HKMA) in December 2016, its de facto central bank. This latest deal strengthens the co-operation between the U.K. and its former colony, and is intended to keep track of the breadth and speed of development in the growing fintech sector. Technology companies are increasingly looking to enter financial services (FS) to displace incumbents or collaborate with them in order to offer new services.
Commenting on the SFC deal in a statement, Christopher Woolard, executive director of strategy and competition at the FCA, said: “Co-operation agreements are absolutely vital in fostering an environment of fintech innovation on a global scale. In the last few months alone we’ve signed agreements with colleagues in China, Japan, Canada and the Hong Kong Monetary Authority.”
“Working with other regulators internationally, we want to build a common understanding of the principles of good innovation and we look forward to working closely with the SFC.”
In the same statement, Ashley Alder, the SFC’s CEO, said: “This agreement will help both regulators stay abreast of innovation in financial services while providing innovative fintech firms seeking to develop and grow their businesses internationally with enhanced channels for communicating with regulators.”
The agreement follows the creation of the FCA’s Innovation Hub in 2014 and the SFC’s Fintech Contact Point in 2016. These initiatives were pioneering in their day, offering regulatory support to fintech innovation that seeks to disrupt the existing means of doing business in the financial services sector.