November 4, 2016 by Canadian Underwriter
The Ontario Securities Commission (OSC) and the Australian Securities and Investments Commission (ASIC) have signed a new agreement under which fintech companies in Australia and Ontario “will be able to draw on support from the combined resources of their financial regulators as they seek to operate in the others’ market.”
Under the agreement, signed in Toronto this week, ASIC and OSC will refer to one another those businesses seeking to enter the others’ market, OSC explained in a press release issued earlier this week. “The regulators may provide support to innovative businesses before, during and after authorization to help reduce regulatory uncertainty and time to market,” the release said.
The agreement follows the creation of the Innovation Hub at ASIC in April 2015 and the OSC LaunchPad in October 2016. These initiatives were established to help businesses with innovative ideas navigate financial/securities regulation, support them through the authorization process and ease their engagement with the regulator.
To qualify for the support offered by the agreement, businesses need to meet the eligibility criteria of their home regulator. Once referred by the regulator, and ahead of applying for authorization 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.
ASIC and OSC have also committed to share information on emerging trends in each other’s markets and the potential impact on regulation.
Maureen Jensen, chair and CEO of the OSC, said in the release that OSC Launchpad, unveiled on Oct. 24, “is the first dedicated team by a securities regulator in Canada to help fintech businesses navigate securities law requirements and accelerate time-to-market. 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,” Jensen said.
John Price, ASIC Commissioner, said that since the Innovation Hub was launched last year, the regulator has seen a surge in requests by fintech startups seeking assistance about how to navigate the regulatory requirements. “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,” Price explained. “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.”