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 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.
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.
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, 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.”