The Financial Conduct Authority (FCA), the securities regulator in the UK, has signed a cooperation agreement with the Ontario Securities Commission (OSC). The agreement is designed to provide support to innovative Fintech firms seeking entry into either market.
The Agreement allows the FCA and the OSC to refer to one another innovative businesses seeking to enter the other’s market. The regulators may provide support to innovative businesses to help reduce regulatory uncertainty and time to market. The cooperation Agreement follows the creation of the FCA’s Innovation Hub in 2014 and OSC LaunchPad by the OSC in October 2016. These initiatives are designed to help businesses with innovative ideas navigate the regulatory framework, support them through authorisation and facilitate their engagement with their respective regulator.
Christopher Woolard, Executive Director of Strategy and Competition at the FCA, called the Agreement a positive step towards promoting Fintech innovation in each market;
“It provides FinTech businesses in Ontario and the UK with ready access to the regulatory support they need and we look forward to welcoming firms referred to us by the OSC to assist them in understanding the UK market and its financial regulation,” stated Woolard.
Maureen Jensen, Chair and CEO of the OSC, said they have been hearing from many startups in the Fintech space since the OSC announced the LaunchPad.
“Since unveiling OSC LaunchPad last year, we are hearing from many emerging businesses that offer innovative services, products and applications of benefit to investors. Many of these businesses are also seeking to expand globally, and this agreement reflects our ongoing commitment to enhancing their regulatory experience.”
Once referred by the regulator, and ahead of applying for authorisation to operate in the new market, the business will have access to dedicated staff that will help them to understand the regulatory framework in the market they wish to join, and how it applies to them.
The FCA and OSC have also committed to share information on emerging trends and regulatory issues pertaining to innovation in financial services.
The FCA has inked multiple agreements with regulatory bodies around the world. The UK has been a leader in the Fintech innovation space and many industry followers point to the light touch regulatory approach, combined with a competition mandate, as vital catalysts to driving financial innovation.