The Ontario Securities Commission (OSC) and the U.K.'s Financial Conduct Authority (FCA) signed deal this week that will see regulators refer innovative financial technology (fintech) firms to one another in a bid to ease their entry into their respective markets.
Under the terms of the arrangement, fintech firms based in Ontario will be able to call on the OSC for support in expanding to the U.K. and vice versa.
"Once referred by the regulator, and ahead of applying for authorization to operate in the new market, the business will have access to dedicated staff that will help them to understand the regulatory framework in the market they wish to join, and how it applies to them," the regulators note in a statement.
The arrangement is intended to help fintech firms get to market faster by reducing the regulatory uncertainty that may face a firm looking to enter a new market. It follows on the heels of a similar arrangement between the OSC and Australian regulators that was struck last year.
Both the OSC and the FCA have been particularly focused on fintech for the past couple of years. The OSC unveiled a dedicated fintech unit, OSC LaunchPad, this past autumn, which followed a similar initiative from the FCA, Innovation Hub. These efforts aim to help fintechs navigate the regulatory framework and allow them to test new ideas in a limited environment, often referred to as a regulatory sandbox.
"Since unveiling OSC LaunchPad last year, we are hearing from many emerging businesses that offer innovative services, products and applications of benefit to investors," says Maureen Jensen, chairwoman and CEO of the OSC, in a statement. "Many of these businesses are also seeking to expand globally, and this agreement reflects our ongoing commitment to enhancing their regulatory experience."
"[The] agreement with the OSC is a positive step toward promoting financial innovation in each of our respective markets," adds Christopher Woolard, executive director of strategy and competition with the FCA, in a statement. "It provides fintech businesses in Ontario and the U.K. with ready access to the regulatory support they need and we look forward to welcoming firms referred to us by the OSC to assist them in understanding the U.K. market and its financial regulation."
As part of the deal, the OSC and the FCA also committed to share information with one another on emerging trends and regulatory issues in the fintech space.
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