Australia and Singapore in fintech marriage

AUSTRALIA and Singapore are working towards a Closer Strategic Partnership (CSP) modelled on Australia’s Closer Economic Relations (CER) agreement with New Zealand . . . 

SINGAPORE — Australia and Singapore have inked what is known as the Innovation Functions Co-operation Agreement, to pave the way for fintech firms to do business in both countries.

The financial regulators – the Monetary
Authority of Singapore (MAS) and the Australian Securities and Investments Commission (ASIC) — have pledged to work closely to help foster fintech start-ups.

Sopnendu Mohanty, Chief Fintech Officer with MAS, says the agreement will create
opportunities for fintech businesses from both Singapore and Australia to grow and expand into each other’s markets.

ASIC Chairman, Greg Medcraft, said fintech start-ups have been asking about regulatory
requirements in Australia since ASIC set up an innovation hub last year.

“This agreement with the MAS will help break down barriers to entry both here and in Singapore,” he said. MAS and ASIC signed the agreement in Singapore in June.

Since ASIC launched its Innovation Hub, it has seen a surge in requests by fintech start-ups seeking assistance in how to navigate the regulatory requirements.

“In particular we have dealt with robo or digital advice, crowd-sourced equity funding, payments, marketplace lending and blockchain business models,” he said.

Clearly some business ideas would want to scale up internationally, he added.

MAS said the agreement will enable innovative fintech companies in Singapore and Australia to establish initial discussions in each other’s market faster and to receive advice on required licences, thus helping reduce regulatory uncertainty and time to market.

Singapore has a vibrant fintech ecosystem, reinforced by sound infrastructure and a growing talent pool. The City-State sees itself as a gateway to other markets in Asia.

MAS says it is also looking forward to partnering ASIC in joint innovation projects on the application of key technologies such as digital and mobile payments, blockchain and distributed ledgers, big data, and Application Programming Interfaces (APIs). 

ASIC and MAS have also committed to
exploring joint innovation projects together, and to share information on emerging market trends and their impact on regulation.  

Medcraft said: “We recognised that innovation in financial services isn’t confined by
national borders. ASIC is committed to encouraging innovation that has the potential to benefit financial consumers and investors.”

In March, ASIC signed what it described as a new world-first agreement to support innovative fintech companies in Australia and the United Kingdom.

Under this agreement, the UK’s Financial Conduct Authority (FCA) and ASIC will refer to one another innovative businesses seeking to enter the other’s market. The British and Australian regulators have agreed to provide support to innovative businesses before, during and after authorisation to help reduce regulatory uncertainty and time to market.

Similarly, under the Singapore-Australia agreement, fintech companies seeking to qualify for support offered by the agreement will need to meet the eligibility criteria of their home regulator.

Once referred by the regulator, and ahead of applying for a licence to operate in the new market, a dedicated team or contact person will help them understand the regulatory framework in the market they wish to join, and how it applies to them.

The latest agreement between Singapore and Australia falls under a broader agreement
between the two countries to upgrade their
relationship. Canberra is seeking to broaden the scope of co-operation with Singapore as it works towards a Closer Strategic Partnership (CSP). The model is Australia’s Closer Economic Relations (CER) agreement with New
Zealand.