UK and US regulators collaborate on FinTech innovation

The Financial Conduct Authority (FCA) has signed a collaborative arrangement to support FinTech innovation with the US Commodity Futures Trading Commission (CFTC).

Under the arrangement, the regulators said they will collaborate and support innovative firms through each other’s financial technology (FinTech) initiatives, LabCFTC and FCA Innovate.

The Cooperation Arrangement on Financial Technology Innovation (FinTech Arrangement) focuses on information-sharing regarding FinTech market trends and developments. It also facilitates referrals of FinTech companies interested in entering the others’ market, and sharing information and insight derived from each authority’s relevant sandbox, proof of concept, or innovation competitions.

Andrew Bailey, chief executive of the FCA, commented: “International borders shouldn’t act as a barrier to innovation and competition in financial services and that is why agreements like the one we have signed today with the CFTC, a forward looking and proactive regulator, are so important. As our first agreement of this kind with a US regulator, we look forward to working with LabCFTC in assisting firms, both here in the UK and in the US, who want to scale and expand internationally in our respective markets. As part of the Arrangement, the FCA and the CFTC will be hosting a joint event in London to demonstrate how firms can engage with both regulators.”

The FinTech Arrangement follows the creation of FCA Innovate in October 2014 and LabCFTC in May 2017. These initiatives aim to help businesses navigate the regulatory landscape and engage with the regulator. To date, the FCA’s Innovation Hub has supported over 500 businesses and the authorization of 43 businesses. LabCFTC has engaged with over 150 entities since its launch last year, published its first primer on the topic of virtual currencies, and soon will seek public feedback on a planned 2018 innovation competition.

CFTC chairman Christopher Giancarlo added: “The FCA’s Project Innovate is the gold standard for thoughtful regulatory engagement with emerging technological innovation.
“This is the first FinTech innovation arrangement for the CFTC with a non-US counterpart. We believe that by collaborating with the best-in-class FCA FinTech team, the CFTC can contribute to the growing awareness of the critical role of regulators in 21st century digital markets.”

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