UK, Japan financial regulators announce Exchange of Letters for fintech cooperation

UK’s Financial Conduct Authority (FCA) and Financial Services Agency of Japan (JFSA) announced that they have exchanged letters on a Co-operation Framework to support innovative fintech companies in both the countries.

The announcement soon follows the Cooperation Agreement between the regulators of Singapore and Dubai – Monetary Authority of Singapore (MAS) and Abu Dhabi Global Market (ADGM) in a move to foster the fintech entrepreneurship and support innovation in financial services in both the countries.

The Exchange of Letters between both the financial regulators will offer a regulatory referral system for Innovator Businesses from Japan and the UK seeking to enter the other’s market. For Japan, the letter from the JFSA to the FCA will promote Japanese fintech startups to engage with innovative financial businesses globally and will also attract UK fintech companies to the Japanese market in order to contribute and stimulate the economy.

“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. The 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,” Shunsuke Shirakawa, the Vice Commissioner for International Affairs at the JFSA, stated.

The Exchange of Letters will also encourage both regulators to share information about financial services innovation in their respective markets, reduce barriers to entry in a new jurisdiction and further promote innovation in both countries.

For the UK, promoting competition through innovation forms a significant part. The letter from the FCA to the JFSA will offer priceless information and knowledge to UK firms hoping to enter the Japanese market.

“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,” Christopher Woolard, Executive Director of Strategy and Competition at the FCA, stated.