Kenyan and Australian regulators come together for fintech
ASIC and the Capital Markets Authority of Kenya have co-signed an agreement to promote financial innovation.
Financial regulators from Kenya and Australia have agreed to support innovation in financial technology – fintech – in their respective markets. The Capital Markets Authority of Kenya (CMA) and the Australian Securities and Investments Commission (ASIC) signed the agreement in Hong Kong, where they were both attending a board meeting for the International Organisation of Securities Commissions.
The agreement sets up a framework that will allow the two regulatory bodies to cooperate and share information from their markets. ASIC chairman Greg Medcraft said he hoped the agreement would break down entry barriers in both countries.
"We are excited to be working more closely with CMA. It operates in a jurisdiction that has seen significant fintech innovation growth. Innovation in financial services isn’t confined by national borders."
The agreement comes after ASIC named digital disruption and financial innovation as two of its core challenges for the next four years in its corporate plan. The regulator has also established a regulatory sandbox to allow fintech companies to test products and services without a license. While Medcraft says ASIC is currently considering the results of that consultation, Paul Muthara, chief executive of CMA says it has taken steps to establish a regulatory sandbox of its own.
"We are committed to facilitating innovation in financial services, leveraging Kenya’s positioning in the region as an innovation centre. This however calls for us to assess lessons learned and to compare strategies to balance innovation and regulation with our peer regulators."
"The CMA has recently commenced efforts towards the establishment of a Regulatory Sandbox structure that is designed to encourage innovation in the capital markets. This strategy reflects the CMA's role in facilitating the introduction of new fintech products in the capital markets area."
Muthara says CMA wants to share best practices when addressing regulatory issues that surround innovation in financial services. The agreement is likely to be welcomed by the Australian fintech sector, with the surge in innovation necessitating increased support and cooperation from regulators.
"Since ASIC launched its Innovation Hub in 2015, we have seen a surge in requests by fintech startups seeking assistance about how to navigate the regulatory requirements," said Medcraft.
Both ASIC and the CMA have agreed to share information regarding emerging market trends and regulatory issues arising from the growth in innovation.