The Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC) will now alert each other about innovative businesses seeking to enter the other’s market, under the terms of a new agreement between the two regulators. The watchdogs have also agreed to share information on emerging market trends and their potential impact on regulation.

The agreement follows the establishment at both the FCA and the ASIC of Innovation Hubs, designed to help businesses with innovative ideas to engage directly with regulators and find a clear path through regulatory authorisation processes. The FCA Innovation Hub has supported over 200 businesses in this way, and led 18 through the FCA authorisation process since the hub was launched in 2014. The ASIC hub, launched in 2015, has worked with over 75 businesses and granted 10 licences.

To qualify for support under the new arrangement, businesses will need to meet eligibility criteria set by their home regulator’s Hub. Once referred by their regulator the business will be able to access dedicated support from its counterpart in the second country, to help them understand the regulatory environment there and to manage the authorisation process. Following authorisation, the business will continue to have access to a dedicated contact within the regulator for the next year.

“Innovation in financial services isn’t limited by national borders and so it’s important that we support overseas businesses that have new ideas that could benefit British consumers,” explained Christopher Woolard, director of strategy and competition at the FCA. “We also know that many British firms wish to use the UK as a springboard to launch their businesses or products internationally. That is why this agreement – the first of many, we hope – is important. With ASIC, we will reduce the barriers for authorised firms looking to grow to scale overseas and to assist non-UK innovators interested in entering the market we serve.”

Greg Medcraft, chairman at ASIC, noted that since the launch of the ASIC Innovation Hub, FinTech startups had presented innovative ideas related to subjects including robo-advice, crowdsourced equity, payments systems and blockchain-based business models. “It is very exciting to observe and clearly some business ideas will want to scale up internationally,” he said. “We believe this agreement with the FCA will help break down barriers to entry both here and in the UK.”

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