Out-Law News | 09 Dec 2016 | 9:58 am | 1 min. read
Under the agreement, the UK's Financial Conduct Authority (FCA) and the Hong Kong Monetary Authority (HKMA) will "refer to each other innovator businesses that would like to operate in the other authority’s jurisdiction".
According to the agreement, upon a referral being received, the FCA or HKMA both intend to "assist the innovator businesses in understanding the regulatory regime" that they oversee and explain "how such regimes may be relevant" to those companies.
The agreement also confirms that the FCA and HKMA intend to "share information about innovations in financial services in their respective markets", such as on emerging trends and regulatory issues pertaining to innovation.
The FCA and HKMA may also pursue "joint innovation projects on the application of novel financial technologies", share expertise and knowledge, and facilitate staff secondments to one another, under the new cooperation agreement.
Hong Kong-based technology law expert Paul Haswell of Pinsent Masons, the law firm behind Out-Law.com, said: "Hong Kong is keen to establish itself as Asia’s fintech hub but without proper regulatory protections and a framework in place to protect the consumer it will be unable to stave off competition from Singapore. The HKMA is making the right moves in order to make fintech attractive and accountable in a market where there is plenty of volatility as well as opportunity."
Christopher Woolard, executive director of strategy and competition at the FCA, said: “Alongside promoting innovation in UK businesses, we also want to see the best firms from around the world coming to the UK. Both consumers and the wider UK economy benefit from this transfer of ideas and innovation. The agreement signed … with the HKMA is a good example of this type of international co-operation and we look forward to working to promote innovation and reduce barriers to entry for firms both here in the UK and in Hong Kong."
Shu-Pui Li, executive director of financial infrastructure at the HKMA, said: "We are delighted to sign the agreement with the FCA. Both Hong Kong and the UK are well positioned as global financial centres and premier locations for financial innovation. Many fintech firms and financial institutions in the two markets have already gained a solid local footing. Collaboration between the HKMA and the FCA will create significant synergy for the two markets by enabling fintech firms and financial institutions to extend their global reach and learn from their foreign counterparts. It will also help to enhance services delivered by financial institutions."