The Financial Services Agency of Japan (JFSA) and the UK’s Financial Conduct Authority (FCA) have exchanged letters on a Co-operation Framework to support innovative FinTech companies.
This Exchange of Letters between the JFSA and the FCA will provide a regulatory referral system for Innovator Businesses from Japan and the UK seeking to enter the other’s market. The authority that receives an Innovator Business referral will provide support to the Innovator Businesses by reducing regulatory uncertainty and time to market. In addition, the Exchange of Letters will encourage the regulators to share information about financial services innovation in their respective markets, reduce barriers to entry in a new jurisdiction and further encourage innovation in both countries.
For Japan, this Exchange of Letters will encourage Japanese startup companies to engage with innovative financial businesses globally and will attract UK companies to the Japanese market and contribute to stimulating the economy.
For the UK, 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 Exchange of Letters will provide invaluable knowledge to UK firms hoping to enter the Japanese market and assist non-UK innovators interested in entering the market the FCA oversees.
Shunsuke Shirakawa, the Vice Commissioner for International Affairs at the JFSA, said:
“We are delighted to establish this Co-operation Framework with the FCA. This is our first case in creating a pro-FinTech Co-operation Framework with any other countries. UK is one of the world-leading FinTech countries, generating £6.6 billion in revenue. We believe that this Exchange of Letters strengthens the relationship between the JFSA and the FCA and promotes innovation in our respective markets.”
Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said:
“We are committed to encouraging innovation that has the potential to be of benefit to consumers using financial services here in the UK. Today’s Exchange of Letters with the JFSA will help break down barriers to entry both in Japan and in the UK for firms with interesting new business services and products."
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.
- In October 2014, the FCA launched its Innovation Hub[3] 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[4].