Tuesday, February 20,
2018 07.22AM / FCA / Image Source PYMNTS.com
The Financial Conduct Authority (FCA)
and the US
Commodity Futures Trading Commission (CFTC) have today signed an arrangement
that commits the regulators to collaborating and supporting innovative firms
through each other’s financial technology (FinTech) initiatives – LabCFTC(link is external)and FCA Innovate.
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 FCA’s Project Innovate is the
gold standard for thoughtful regulatory engagement with emerging technological
innovation," said CFTC Chairman Giancarlo.
Therefore, I am delighted to join
Andrew Bailey in this arrangement to demonstrate our cross-Atlantic commitment
to facilitating market-enhancing innovation and sharing best practices in
FinTech engagement. 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.
Our LabCFTC FinTech effort grew out of a bipartisan commitment to innovation,
and I thank my fellow CFTC Commissioners Brian Quintenz and Russ Behnam for
their continued leadership on these issues.”
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.
The Fintech Arrangement follows the
creation of FCA Innovate in October 2014 and LabCFTC in May 2017. Among other
activities, these initiatives were set up to help businesses with innovative
ideas 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
The FinTech Arrangement supports both
regulators’ efforts to facilitate responsible FinTech innovation and ensure
international collaboration on emerging regulatory best practices.
2. On 1 April
2013, the FCA became responsible for the conduct supervision of
all regulated financial firms and the prudential supervision of those not
supervised by the Prudential Regulation Authority (PRA).
3. The FCA has an
overarching strategic objective of ensuring the relevant markets function
well. To support this it has three operational objectives: to secure an
appropriate degree of protection for consumers; to protect and enhance the
integrity of the UK financial system; and to promote effective competition
in the interests of consumers.
4. In October
2014, the FCA launched its Innovation
Hub to encourage innovation in financial services by supporting
innovator businesses with a range of services. The work of the FCA’s
Innovation Hub is closely tied to the FCA’s objective of promoting
effective competition in the interest of consumers.
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