On 18 October 2017, the Australian Securities and
Investments Commission (ASIC) and the Swiss Financial Markets Authority (FINMA)
into a new agreement to cooperate on innovation in the financial sector.
The agreement aims to encourage innovation in financial
services in Switzerland and Australia, and in line with similar agreements on
FinTech innovation, financial services innovators will be supported in meeting
legal requirements when operating in each country.
The Agreement enables ASIC to refer innovative businesses to
FINMA, where they will receive the same level of support offered to local
FinTech companies. ASIC will also accept referrals from FINMA, and
provide support for these innovative businesses through its Innovation Hub.
This includes dedicated contacts in each regulator and support prior to and
during the authorisation process.
Under the Agreement, ASIC and FINMA will exchange
information on regulatory and policy issues on issues relevant to FinTech,
including innovation in financial services and market trends and developments.
The press release highlights that investment is a key
element of contemporary ties between Australia and Switzerland. Switzerland is
Australia’s tenth-largest source of foreign investment, worth AU$50.2 billion
at the end of 2015. Swiss cities Zürich and Geneva have a long history as
financial centres, and the FinTech industry in Switzerland has recently gained
a lot of momentum on the back of government initiatives to encourage growth in
this sector. There are more than two hundred estimated FinTech startups in
Switzerland, specialising in areas like wealth management, comparative consulting,
crypto finance, data management, payment services and lending.
Signing the agreement in Madrid last week, ASIC Chairman
Greg Medcraft said, “This expands our innovation cooperation network into
continental Europe, and with Switzerland, opens up another key financial centre
for Australian FinTech expansion.”
“This agreement cements an already strong relationship with
FINMA, and we look forward to ongoing collaboration in the fast-paced fintech
environment in both countries.”
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.
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. On October 24, the Australian
Government released exposure draft
legislation and regulations to create an enhanced regulatory sandbox, with an
expanded 24-month testing timeframe and a wider range of eligible products and
ASIC has been
collaborating closely with regulators in other jurisdictions to understand
developments, and to help entrepreneurs expand their target markets into other
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. Recently, ASIC
and the Financial Markets Authority (FMA) of New Zealand re-affirmed
their commitment to collaboration and cooperation on the expanding opportunities
in FinTech and innovation.
In addition, information-sharing agreements have
been entered with the Capital
Markets Authority, Kenya and Otoritas
Jasa Keuangan (Financial Services Authority of Indonesia), Indonesia.