Australian and New Zealand financial regulators reaffirm collaboration on FinTech opportunities and innovation
The Financial Markets Authority (FMA) of New Zealand and the Australian Securities and Investments Commission (ASIC) have re-affirmed their commitment to collaboration and cooperation on the expanding opportunities in FinTech and innovation.
The FMA and ASIC entered a wide-ranging Memorandum of Understanding (MoU) in 2012. On October 19, senior executives from both regulators discussed the opportunities and challenges of balancing the desire to foster innovation and growth in the emerging FinTech industry, while protecting consumers and managing risks. Regulators will assist innovative businesses hoping to make ventures into each other’s markets by providing referrals for advice and support.
Garth Stanish, FMA Director of Capital Markets, said, “ASIC and the FMA have a strong relationship in all the areas we regulate. Our mutual commitment to innovation and FinTech is no different. We’ll continue to share information and views on the regulatory issues arising from emerging technology and increasing innovation.”
“We’re pleased to further develop our relationship with the FMA and demonstrate our collaborative approach in this space. Across the Tasman we’ll continue to cooperate with the FMA and refer new businesses where they have an appetite to work in both jurisdictions,” said John Price, ASIC Commissioner.
FMA’s approach to innovation and FinTech in New Zealand
The FMA’s efforts to facilitate responsible FinTech innovation in New Zealand are supported by the Financial Markets Conduct Act 2013, as one of its purposes is ‘to promote innovation and flexibility in financial markets’.
The FMA established an Innovation Strategy Group (ISG) in early 2017 to monitor emerging trends in FinTech and innovation. The ISG also ensures a consistent, coordinated FMA approach to engaging with market participants and across government.
Earlier this week the FMA announced its decision to allow personalised robo-advice services in New Zealand. Providers will need to apply to use an FMA exemption from early 2018. The FMA’s Annual Corporate Plan also sets out its areas of focus and key activities under the theme of regulating for rapid technological innovation.
ASIC’s approach to innovation and FinTech in Australia
ASIC has been working on developing guidance about how FinTech developments fit into the Australian regulatory framework (such as guidance for entities using or planning to use blockchain technology). In 2015, ASIC launched its Innovation Hub to help FinTechs 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. It is also helping ASIC to monitor and understand FinTech developments.
ASIC introduced a FinTech regulatory sandbox in December 2016. It allows eligible businesses to test certain financial and credit services for up to 12 months without needing to apply for a licence.
ASIC has been collaborating closely with regulators in other jurisidictions to understand developments, and to help entrepreneurs expand their target markets into other jurisdictions.
To date, ASIC has entered into FinTech referral and information-sharing agreements with the Monetary Authority of Singapore, the United Kingdom’s Financial Conduct Authority, Ontario Securities Commission, Hong Kong Securities and Futures Commission, the Japan Financial Services Agency, Malaysia Securities Commission and Abu Dhabi Global Market Financial Services Regulatory Authority. In addition, information-sharing agreements have been entered with the Capital Markets Authority, Kenya and Otoritas Jasa Keuangan (Financial Services Authority of Indonesia), Indonesia.