The Australian Securities and Investments Commission (ASIC) has signed an agreement with the Ontario Securities Commission (OSC) in Canada that will allow fintech companies greater support when looking to enter and operate in the other’s market. Financial activity in each Canadian province is governed by its own regulatory body.
ASIC stated that under the terms of the agreement, each regulator may provide support to a company before, during, and after the authorisation process in order to help reduce regulatory uncertainty and time to market.
In order to qualify for this support, a business will need to meet the eligibility criteria of its home regulator; it will will then be referred and be given access to a dedicated team that will help them understand the new regulatory market and how it applies to them ahead of applying for authorisation to operate in the new market.
The two regulators will also share information on emerging trends in their respective markets and the potential impact they may have on regulation.
John Price, ASIC Commissioner, said that the agreement comes as the organisation has seen a surge in requests by fintech startups looking for assistance about how to navigate the regulatory requirements since the launch of its own Innovation Hub last year.
“These have covered a wide range of issues, as you would expect of such a young and exciting sector, but include robo or digital advice, crowd-sourced equity funding, payments, marketplace lending and blockchain business models. Some of these business concepts are already looking to expand internationally, and these agreements with like-minded regulators will be a significant factor in paving the way,” Price said.
For the OSC, the agreement comes a month after the launch of its OSC LaunchPad, a team dedicated to working with fintech startups to help them navigate the regulatory framework and reduce time to market.
Maureen Jensen, chair and CEO of the OSC, said, “Today’s agreement, another first for a Canadian securities regulator, reflects our commitment to improving the regulatory experience for emerging businesses that are offering innovative services, products and applications of benefit to investors.”
According to data from Information Venture Partners and MaRS, Toronto, the biggest city in the province of Ontario, is Canada’s biggest financial services market, employing over 350,000 people. On this scale it ranks as the third biggest financial services market across North America and ninth globally.
In terms of fintech startups, a number of Canadian companies were listed in this year’s Fintech 100 report from H2 Ventures and KPMG, with Toronto company League, offering an alternative to traditional health insurance, coming in at 36 on the list of Leading 50 global fintechs.
On the list of 50 companies to watch were Toronto’s Overbond, working in the bond issuance market and WealthSimple, an automated investment tool. Vancouver’s Grow, which provides established banks with digital banking solutions and Montreal-based NorthSideInc, which has created a virtual assistant to help users keep on top of their finances also made the list.
The agreement with OSC follows a similar deal signed with the UK’s Financial Services Authority (FSA) earlier this year to help fintech startups more easily expand into the other market.
ASIC also last month signed a Cooperation Agreement with the Capital Markets Authority of Kenya (CMA), setting up a framework for cooperation between the two regulators.
Greg Medcraft, chair of ASIC, said of the Agreement, “[The CMA] operates in a jurisdiction that has seen significant fintech innovation growth. Innovation in financial services isn’t confined by national borders. We hope this agreement will help to break down barriers to entry both here and in Kenya.”
Image: Toronto. Source: CallisonRTKL.