The Dubai Financial Services Authority ('DFSA') and the Australian Securities and Investments Commission (‘ASIC’) have signed a Cooperation Agreement, highlighting a mutual desire to promote innovation in both financial services and regulatory compliance in their respective markets.
ASIC and the DFSA have a long-standing relationship and this Agreement, similar to other agreements recently signed by ASIC, emphasises their commitment to maintain strong communication and to create a regulatory framework that supports the latest developments in Fintech innovation.
The Agreement, signed on 23 November 2017, provides a framework to support and understand financial innovation in each jurisdiction. Now there is a simple pathway for Australian businesses to engage with the DFSA, and vice versa. The regulators are able to refer innovative fintech businesses to each other for support provided through their respective fintech functions - ASIC’s Innovation Hub and the DFSA’s Dubai International Financial Centre (‘DIFC’).
The DIFC has recently set up a number of initiatives aimed at encouraging fintech innovation. The 'FinTech Hive' accelerator program links technology companies with government organisations to create transformational solutions. In addition, its Innovation Testing Licence, a restricted financial services licence, allows Fintech firms to develop and test concepts, while ensuring financial stability and protecting consumers.
In recognising the importance of regulatory technology ('regtech'), ASIC and the DFSA intend to develop their partnership by sharing information on regtech trials. Regtech is becoming increasingly important and cooperation on this front will benefit both regulators and businesses.
Fintech is a fast-developing industry and ASIC is focused on the vital role that fintechs are playing in re-fashioning financial services and capital markets. International opportunities for Australian fintech businesses are ever increasing as ASIC continues to create fintech referral and information-sharing agreements with international regulators.