The UK’s Financial Conduct Authority (FCA) and the Hong Kong Monetary Authority (HKMA) have entered into a Co-operation Agreement (Agreement) to foster collaboration between the two regulatory authorities in promoting financial innovation.
According to the Agreement, the FCA and the HKMA will closely collaborate on a number of initiatives such as referrals of innovative firms, joint innovation projects, information exchange and experience sharing, to facilitate financial innovation in the United Kingdom and Hong Kong.
For the UK this represents the fifth co-operation agreement that the FCA has signed with international authorities after Australia, Singapore, South Korea, and China. The FCA has an overarching statutory objective as a regulator to make financial services markets work well and promoting competition through innovation forms a significant part of this. The Co-operation Agreement with the HKMA[1] will reduce the barriers for authorised firms looking to grow to scale overseas and assist non-UK innovators interested in entering the market the FCA oversees.
For Hong Kong, the Agreement is a key initiative of the Fintech Facilitation Office (FFO) of the HKMA. It presents significant opportunities for financial and fintech companies to enhance their services and extend their global footprint. The Agreement also shows the HKMA’s commitment to build a vibrant fintech ecosystem.
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 today 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."
Mr Shu-Pui Li, Executive Director (Financial Infrastructure) of 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.”
The Agreement was signed today at the London-Hong Kong Financial Services Forum in London, an annual forum facilitating discussion on financial cooperation and development between the UK and Hong Kong.
About the FCA
- On 1 April 2013, the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
- Find out more information about the FCA.
- Find out more about the FCA’s Project Innovate.
About the FFO
The FFO was established in March 2016 to facilitate the healthy development of the fintech ecosystem in Hong Kong and to promote Hong Kong as a fintech hub in Asia.
Among other things, the new office acts as:
- a platform for exchanging ideas of innovative fintech initiatives among key stakeholders and conducting outreaching activities
- an interface between market participants and regulators within the HKMA to help improve the industry’s understanding about the parts of the regulatory landscape which are relevant to them
- an initiator of industry research in potential application and risks of fintech solutions