The Australian Securities and Investment Commission (ASIC) has signed an agreement with the Ontario Securities Commission (OSC) this week to provide mutual support to fintech businesses in Australia and Ontario, Canada as they seek to expand into each other's markets.
The regulators will provide support to fintech businesses before, during, and after authorisation to help reduce regulatory uncertainty and speed up time to market, according to an announcement made on Wednesday.
Under the agreement, the regulators will refer "innovative" fintech businesses across each other's markets. This means, for instance, if an Australian fintech startup meets the eligibility criteria and wants to operate in Ontario, Canada, then the agreement ensures that the startup has access to dedicated staff to help them understand and learn how best to operate within the regulatory framework in Canada.
The agreement between ASIC and OSC follows the launch of OSC's LaunchPad in October which was also created improve the regulatory experience for emerging fintech businesses in Canada.
Maureen Jensen, Chair and CEO of the OSC, said the LaunchPad is "the first dedicated team by a securities regulator in Canada" to help fintech companies navigate financial and securities law requirements and reduce time-to-market.
ASIC launched its Innovation Hub with tailored content for fintech businesses in March 2015. It has since received many requests from fintech startups for assistance with regulatory issues, according to ASIC.
"These have covered a wide range of issues, as you would expect of such a young and exciting sector, but include robo or digital advice, crowd-sourced equity funding, payments, marketplace lending, and blockchain business models," said ASIC Commissioner John Price.
"Some of these business concepts are already looking to expand internationally, and these agreements with like-minded regulators will be a significant factor in paving the way."
ASIC and OSC have also committed to share information on emerging trends in each other's markets and the potential impact on regulation.
The Australian regulator has also recently consulted local parties including the Australian government on the establishment of its own regulatory sandbox that proposes an environment to allow startups to test concepts without a licence.
With responses currently under consideration, the sandbox is expected to enable startups to manage the regulatory risks, providing the probable project outcomes are favourable to Australia.
Earlier this year, the federal government published its vision of the future of fintech in Australia, with the underlying message being that financial technology is transforming the nation's financial system.
At the time, Treasurer Scott Morrison said he wanted to see fintech in Australia become the focus of creative thinking and business activity, and that fintech was going to change how business interacts with consumers.
"Australia already has a sophisticated, competitive, and profitable financial sector underpinned by a strong regulatory system," he said.
"As financial services become more globalised and technological disruption more relevant, we need to keep pace with innovation in banking and finance to stay competitive."
It was reported in April that ASIC was also working on a deal with the Monetary Authority of Singapore (MAS) that would see fintech startups in both countries work together to allow cross-border business.
Singapore has been working on its own sandbox initiative that the MAS expects will allow local firms to experiment with new fintech products under less stringent regulatory requirements.