In a world-first agreement, on 23 March 2016, the UK’s Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC) signed a co-operation agreement which provides a framework for co-operation and referrals between the “Innovation Hub” of each regulator. The framework centres on a referral mechanism under which each regulator will refer to the other innovative businesses seeking to enter the other’s market, and will provide support to businesses which have been referred to them by the other regulator. The forward-looking nature and the specific scope of the co-operation agreement are unique aspects of the arrangement, which it is hoped will drive innovation and collaboration across national borders.

Authors: David Calligan Tim Dolan

Hubs and Sandboxes

The FCA launched “Project Innovate” in October 2014, with the objective of encouraging innovation in financial services in the interests of consumers. This is closely linked to the FCA’s competition-related work as it seeks to assist both new and established businesses to introduce innovative financial products and services to the market. It is also designed to help the FCA in its role, by identifying where there may be gaps in the regulatory framework, or where that framework may need to be adapted to reflect changes in the market.

Support is provided through the FCA's dedicated “Innovation Hub”, which helps businesses understand how the regulatory framework applies to them, supports them through the authorisation process and provides them with dedicated contacts at the regulator. The FCA states that its Hub has supported over 200 businesses to date, 18 of which have now become authorised.