The national securities regulators of China and Australia have entered an agreement to share information to promote FinTech innovation in each other’s markets.
The Australian Securities and Investment Commission (ASIC) and China Securities Regulatory Commission (CSRC) have inked a FinTech cooperation agreement that will see the two authorities share and use information on emerging market trends and developments to promote innovation in financial technologies with each other’s markets.
“In the past few years, the rapid development of fintech has created ample opportunities to introduce new financial services, enhance financial inclusion and fulfill investors’ needs,” said CSRC chairman Shiyu Liu.
The alliance is noteworthy for a couple of reasons. China is Australia’s biggest two-way trading partner in goods and services in a market valued at $155.2 billion in 2016. Notably, China is also Australia’s single largest market for both exports and imports. The FinTech agreement builds upon established trade ties.
Secondly, as the ASIC is quick to point out, China is the world’s biggest market for FinTech investments and more pertinently, the adoption of financial technologies in wider society. The likes of Alipay and WeChat pay, two major retail payments platforms, have an estimated 1.1 billion users combined in their payments platforms. Investments in Chinese FinTech ventures exceeded $10 billion in 2016.
ASIC Chairman Greg Medcraft stated:
This Agreement represents an exciting opportunity for us to learn more about the Chinese fintech sector, which is renowned for its success and dynamism. We also look forward to sharing our insights and experiences on regtech with the CSRC.
The co-operation pact will also discuss regulatory issues concerning innovation in financial services to help the authorities develop regulatory approaches in a rapidly disrupted financial services industry.
Liu added:
The Agreement between CSRC and ASIC will provide an effective channel for timely exchange of information on fintech developments and regulatory issues, and enhance regulatory cooperation between the two authorities.
Despite coming together, the two securities regulators have taken markedly different regulatory approaches toward initial coin offering (ICO) fundraising, a radical new application of financial technology powered by cryptocurrencies. In September, the CSRC was among a number of Chinese authorities, led by China’s central bank, to impose a blanket ban on ICO funding after declaring it an ‘illegal practice’ of fundraising that “seriously disrupted the economic and financial order.”
In the same month, the ASIC published guidelines to help businesses and startups understand their obligations when offering ICOs by complying with relevant laws in Australia.
In marked contrast to its Chinese counterpart, the Australian corporate and securities regulator wrote:
ASIC recognises that ICOs have the potential to make an important contribution to the options available to businesses to raise funds and to investment options available to investors.