The Dubai Financial Services Authority (‘DFSA’) and ASIC today signed a Cooperation Agreement which provides a framework for cooperation to support and understand financial innovation in each jurisdiction.
The DFSA regulates the Dubai International Financial Centre (‘DIFC’). Dubai has recently set up a number of initiatives aimed at encouraging fintech innovation, including the ‘FinTech Hive’ accelerator program, and the Dubai Future Accelerators, which involves an intensive nine-week programme pairing technology companies with government organisations to create transformational solutions.
The DFSA allows firms to apply for a restricted class of financial services licences. Successful applicants for the DFSA’s ‘Innovation Testing Licence’ are able to test new products, services and business models within a more flexible regulatory environment, for a limited time.
This Agreement will enable the DFSA and ASIC to refer innovative fintech businesses to each other for support provided through their respective fintech functions. It provides Australian fintech businesses wishing to operate in the DIFC with a simple pathway for engaging with DFSA, and vice versa.
The Agreement also provides a framework for information sharing between the two regulators. Recognising the importance of regulatory technology (‘regtech’), this Agreement specifically provides that ASIC and the DFSA intend to deepen their partnership by sharing information on regtech trials.
On signing the Agreement, ASIC Commissioner John Price said, ‘We are excited to partner with the DFSA to help encourage fintech innovation in Australia and Dubai. Regtech is becoming more and more important – this is a new frontier in our bilateral cooperation that will benefit both regulators and businesses.’
Ian Johnston, Chief Executive of the DFSA said: ‘Today’s agreement underscores our commitment to maintaining strong channels of communication with our regulatory peers and creates a regulatory framework that supports the latest developments in FinTech innovation. We have a long-standing productive relationship with our colleagues at ASIC, which we look forward to extending to this fast-developing industry.’
This is the ninth fintech referral agreement ASIC has entered into, following on from agreements with the United Kingdom, Singapore, Ontario, Hong Kong, Japan, Malaysia, Abu Dhabi and Switzerland.
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, Abu Dhabi Financial Services Regulatory Authority, and the Financial Market Supervisory Authority, Switzerland. In addition, information-sharing agreements have been entered with the Capital Markets Authority, Kenya, Otoritas Jasa Keuangan, Indonesia and the China Securities Regulatory Commission.