Under a new Co-operation Agreement[1] (Agreement), innovative FinTech businesses in Ontario and the United Kingdom will be able to seek support from their financial regulators as they seek to operate in the other’s market.
Signed this week, the Agreement allows the Financial Conduct Authority (FCA) and the Ontario Securities Commission (OSC) to refer to one another innovative businesses seeking to enter the other’s market. The regulators may provide support to innovative businesses to help reduce regulatory uncertainty and time to market.
The Agreement follows the creation of the FCA’s Innovation Hub in 2014 and OSC LaunchPad by the OSC in October 2016. These initiatives are designed to help businesses with innovative ideas navigate the regulatory framework, support them through authorisation and facilitate their engagement with their respective regulator.
Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said:
“Today’s Agreement with the OSC is a positive step towards promoting financial innovation in each of our respective markets. It provides FinTech businesses in Ontario and the UK 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 UK market and its financial regulation.”
Maureen Jensen, Chair and CEO of the OSC, said:
“Since unveiling OSC LaunchPad last year, we are hearing from many emerging businesses that offer innovative services, products and applications of benefit to investors. Many of these businesses are also seeking to expand globally, and this agreement reflects our ongoing commitment to enhancing their regulatory experience.”
Once referred by the regulator, and ahead of applying for authorisation 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 FCA and OSC have also committed to share information on emerging trends and regulatory issues pertaining to innovation in financial services.
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Background
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.
- In October 2014, the FCA launched its Innovation Hub[2] to encourage innovation in financial services by supporting innovator businesses with a range of services. The work of the FCA’s Innovation Hub is closely tied to the FCA’s objective of promoting effective competition in the interest of consumers.
- Find out more information about the FCA.
OSC
In October 2016, the OSC created OSC LaunchPad[4] to engage with FinTech businesses, provide the opportunity for support in navigating securities requirements and strive to keep regulation in step with digital innovation. This initiative supports innovation while fulfilling the OSC’s mandate to provide protection to investors and promote confidence in its markets.