UK & Hong Kong Watchdogs Ink FinTech Cooperation Pact
Hong Kong’s Securities and Futures Commission (SFC) has signed a cooperation agreement with the UK’s Financial Conduct Authority (FCA) to collaborate over FinTech innovation.
Under the terms of the agreement, Hong Kong’s securities regulator and the United Kingdom financial regulator will share information on financial technologies to foster development and innovation. Notably, the two regulators will also share referrals of firms seeking to enter reach other’s markets, paving the way for easier inroads into their respective markets with less cumbersome regulations.
London is commonly seen as the world’s go-to FinTech hub. Its reputation has been enhanced with a number of FinTech cooperation agreements between the FCA and regulators in other countries.
“Co-operation agreements are absolutely vital in fostering an environment of Fintech innovation on a global scale,” stated FCA strategy and competition director Christopher Woolard.
In December 2016, the FCA entered a FinTech agreement with the Hong Kong Monetary Authority (HKMA), Hong Kong’s primary financial regulator toward mutual development of the FinTech sector. The FCA had already entered similar agreements with Australia, South Korea, China and Singapore. This year, the FCA partnered regulators in Canada and Japan.
Following the agreement , SFC chief executive Ashley Alder stated in Hong Kong:
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.
Meanwhile, the FCA announced the first 24 companies to take part in ‘Project Innovate’, its regulatory sandbox, in late 2016. First launched in 2014 as a part of the FCA’s endeavor to encourage innovation in financial technologies, Woolard claimed the regulatory sandbox was the first of its kind anywhere in the world.
Since then, the likes of Singapore, Australia, Hong Kong and Japan have all established or making moves toward installing sandboxes for startups and corporations to experiment new innovative services without the burden of crippling regulation.
While Hong Kong regulators make progress with FinTech endeavors, a financial advisory body published a research report this month urging the Hong Kong government to recognize digital currencies and invest in blockchain technology.
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