The Financial Conduct Authority (FCA) has exchanged ‘letters of co-operation’ with its Japanese counterpart to support innovative fintech companies.
The co-operation framework with the Financial Services Agency of Japan (JFSA) will provide a regulatory referral system for innovative businesses from Japan and the UK seeking to enter each other’s market. If a business referral is made by one of the authorities, the other will provide support to the business by reducing regulatory uncertainty and time to market.
In addition, the FCA said the exchange of letters will encourage the regulators to share information about financial services innovation in their respective markets, to reduce barriers to entry in a new jurisdiction and further encourage innovation in both countries.
It is hoped the co-operation will encourage Japanese start-up companies to engage with innovative financial businesses globally and will attract UK companies to the Japanese market.
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.”
Shunsuke Shirakawa, 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 country. The UK is one of the world-leading fintech countries, generating £6.6bn 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.”