The Australian Securities and Investment Commission (ASIC) has signed an agreement with the China Securities Regulatory Commission (CSRC) to share information that will enable the regulators to maintain visibility over regulatory and relevant economic or commercial developments that occur in each other's markets.
Similar to the agreements ASIC has entered into with Hong Kong, Indonesia, Japan, Kenya, Malaysia, Ontario, Singapore, Switzerland, the United Kingdom, and the UAE, the Information Sharing Co-operation Agreement allows the CSRC and ASIC to stay informed of fintech activity in each other's jurisdictions, and help to inform domestic regulatory approaches in a rapidly evolving global financial environment.
The Chinese and Australian financial regulators will also be able to share information on regulatory technology trials.
According to ASIC, China is Australia's largest two-way trading partner in goods and services, and is a "world leader" in fintech investment, development, and adoption, especially in customer-facing areas such as payments and lending.
Investment in Chinese fintech companies is estimated to have reached $10 billion in 2016, and digital payments transacted in China made up almost half the total global volume the same year, ASIC claimed in an announcement.
Along with the "ample opportunities" brought forth by advancements in fintech, CSRC chairman Shiyu Liu said there are also challenges that financial market regulators have to face.
"Understanding new developments and their impact in overseas markets helps us to remain proactive and forward-looking in our domestic approach," added ASIC Chairman Greg Medcraft.
Earlier this year, the Asia Securities Industry and Financial Markets Association (ASIFMA), which represents banks and asset managers, released a research paper stating that rivalry and differing regulatory standards within various jurisdictions are hindering the advancement of fintech in Asia.
While governments in various APAC nations have launched initiatives to create a better environment for fintech businesses to grow -- for example, ASIC's regulatory sandbox policy, which is set to be legalised by the Australian government -- the fintech industry as a whole is yet to reach a balance between encouraging fintech innovation and ensuring customer protection, according to the paper released by the Hong Kong-based financial lobby group.
"In drafting the principles, we recognised that regulators need to maintain a delicate balance between encouraging fintech innovation and growth on the one hand, and ensuring system and customer protection on the other," Hannah Cassidy, a partner at law firm Herbert Smith Freehills, which contributed to the ASIFMA research paper, said in a statement.
"Without that balance, cybersecurity fears could overwhelm fintech growth, particularly when high-profile attacks have already affected even the most critical and well-protected financial system."
ASIFMA advised regional regulators to coordinate better and adopt a consistent set of best practices to foster innovation and boost competitiveness in the region.
"Throughout Asia, there is development at different paces and without much formal cooperation among the markets, so there's an important and growing need for consistent regulatory standards across all market participants -- including incumbents and startups -- and increased coordination locally, regionally, and internationally," ASIFMA CEO Mark Austen said in a statement.
The draft legislation and regulations states that eligible Australian fintech businesses will be able to test their products and services with up to 100 customers for a maximum period of 24 months.
The tax incentives introduced last year excluded companies that have finance activities as their predominant activities, making the legislation restrictive.
The mandatory data breach notifications laws coming into effect in Australia next year will be followed by other laws to ensure everyone in the digital ecosystem are playing their role in keeping Australia "cyber secure".