Regulators collaborate on fintech

Confirmation of a “collaborative approach” to fintech between the Financial Markets Authority and its Australian counterpart, ASIC, is being described as good news for New Zealand financial service providers.

Friday, October 20th 2017, 6:00AM

The two regulators reaffirmed their commitment to collaboration and cooperation on the expanding opportunities in fintech and innovation.

They entered a memorandum of understanding in 2012.

Garth Stanish, FMA director of capital markets, said: “ASIC and the FMA have a strong relationship in all the areas we regulate. Our mutual commitment to innovation and fintech is no different. We’ll continue to share information and views on the regulatory issues arising from emerging technology and increasing innovation.”

The FMA said it wanted to facilitate responsible innovation, and ensure that the regulatory regime remained relevant and agile.

It established an Innovation Strategy Group (ISG) in early 2017 to monitor emerging trends in fintech and innovation.

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.

Jeremy Muir, a partner at law firm Minter Ellison Rudd Watts, said it was good to see formal recognition of the discussions between the regulators.

‘We know from dealing with the FMA continuously over the last year and more for fintech clients that their innovation group is open-minded and keen to facilitate new tech solutions.”

He said the two took different approaches – ASIC pushes new businesses through its hub while te FMA works closely with companies using its existing toolkit and powers.

He said the collaboration was not likely to extend to New Zealand deploying a “regulatory sandbox” method to encourage fintech innovation.

“I think FMA’s position is likely to be that we have enough flexibility under our new legislation that no formal sandbox is needed - although FMA can move on a broad basis too where it wants to such as the proposed class advice exemption.”

Tags: ASIC fintech FMA regulation technology