On 18 October 2017, the Australian Securities and Investments Commission (ASIC) and the Swiss Financial Markets Authority (FINMA) entered 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 to support financial services innovators in meeting legal requirements when operating in each country.
Investment is a key element of contemporary ties between Australia and Switzerland. Switzerland is Australia’s tenth-largest source of foreign investment, worth $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. On current estimates, there are more than two hundred 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.’
The Agreement enables ASIC to refer innovative businesses to FINMA, where they will receive the same level of support offered to local fintechs. ASIC will also accept referrals from FINMA, and provide support for these innovative businesses through our 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.
ASIC’s approach to innovation and fintech in Australia
ASIC is focused on the vital role that fintechs are playing in re-fashioning financial services and capital markets. In addition to developing guidance about how these new developments fit into our regulatory framework, 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 collaborates closely with other regulators to understand developments, and to help entrepreneurs expand their target markets into other jurisdictions.
To date, fintech referral and information-sharing agreements have been entered 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, Indonesia.
This week ASIC also met with The Financial Markets Authority of New Zealand to discuss trans-Tasman collaborative approach to fintech.