ASIC talking to Singapore on fintech deal
The Australian Securities and Investments Commission is talking to the Monetary Authority of Singapore about an agreement to ensure that regulation does not hinder the progress of fintech start-ups looking to operate across the countries’ borders.
Fintech regulation has been a key agenda item at recent meetings of peak financial regulators across the globe and although the discussions between ASIC and MAS are at an early stage, it is understood both regulators are enthusiastic about seeing a deal come to fruition.
ASIC chairman Greg Medcraft will travel to the IMF spring meeting to talk fintech. Photo: Christopher Pearce
The agreement would be based on a similar co-operation agreement between ASIC and the UK Financial Conduct Authority, which was signed just before Easter and was the first of its kind internationally.
Under the ASIC/FCA agreement, each regulator will refer to the other fintech businesses seeking to enter the other’s market, and provide support to start-ups that have been referred to them by the other regulator. Information about fintech innovation will also be shared between countries. “The forward-looking nature and the specific scope of the co-operation agreement are unique aspects of the arrangement, which it is hoped will drive innovation and collaboration across national borders,” King & Wood Mallesons said in a note to clients.
Closer collaboration between Australia and the UK, and potentially Australia and Singapore, on fintech regulation comes as leading financial regulators scramble to assess the impact fintech could have on global markets and financial stability.
Fintech regulation was a key topic of discussion at the recent meetings of both the International Organisation of Securities Commissions (IOSCO) and the Financial Stability Board.
“Both have flagged fintech as a key priority warranting a co-ordinated multilateral response,” Greg Medcraft, ASIC chairman, told The Australian Financial Review’s Banking & Wealth Summit last Wednesday. “Though it is early days, the evolving thinking in both groups is in line with our approach domestically – that is working to harness the opportunities while mitigating the risks.”
World Bank and IMF meeting
This week, Mr Medcraft will travel to Washington DC for the spring meeting of the International Monetary Fund and World Bank, where he will present a session titled “Digital disruptions to the financial system”.
Mr Medcraft was invited to the meeting by the managing director of the IMF, Christine Lagarde, whom he met at the World Economic Forum meeting in Davos, Switzerland, in January, where fintech was also a big issue of discussion.
At the summit last week, Jesse McWaters, who ran the disruption in financial services sessions at Davos, said bank chief executives have become excited about how fintech partnerships “might enable them to offer new services to their clients, to cut costs, to be more efficient and innovative”.
Mr McWaters will release around July a comprehensive report into distributed ledger technology, or blockchain, which over the last two years “has gone from a relatively obscure technology to one that financial CEOs around the world broadly recognise has the potential to transform the structure of the industry,” he said.
At the meeting of the Financial Stability Board in Tokyo two weeks ago, central bankers discussed distributed ledger technology, including financial stability implications.
In its annual business plan released last week, the FCA said it is more focused this year on ensuring fintech companies and their and technology systems become more resilient to both cyber-attacks and traditional outages in order to enhance consumer protection.
Regulation of fintech in the UK is under the microscope after the London payment fintech Powa Technologies collapsed in February following its key investor calling in its loans after the company missed payroll after sales sagged. The company, which made mobile payments products, was based in London but had offices across the US, Europe and Asia.