The Australian Securities and Investments Commission (ASIC) is talking to the Monetary Authority of Singapore (MAS) about an agreement to ensure that regulation does not hinder the progress of start-ups looking to operate in both countries.
Fintech regulation is a key priority of top financial regulators across the globe. Discussions between ASIC and MAS are at an early stage, however it is believed that the regulators are enthusiastic about striking a deal. The deal is likely to mirror the deal struck between the UK’s Financial Conduct Authority (FCA) and ASIC in March.
In June 2015, Ravi Menon, head of MAS, was the first to suggest “innovation in a sandbox” as an approach for innovation in financial services. However MAS has not yet implemented its sandbox and has been surpassed by the FCA which is launching its sandbox this spring and will start accepting testing proposals for its regulatory sandbox from 9 May.
MAS’ concept of the sandbox has been one with minimal regulator involvement, which is a point of difference with its counterparts, the FCA and ASIC. MAS suggested that financial institutions themselves should “adopt a sandbox” approach to launch their innovative products or services within controlled boundaries.
The MAS concept is one where MAS does not appear to control the sandboxes at all but essentially frees the financial institutions (incumbents or challengers) to experiment. Financial institutions and other market participants would establish sandboxes as needed for specific institutions and other market participants would establish sandboxes as needed for specific use cases and ecosystems.
It remains to be seen if MAS changes its approach and if other regulators will follow the FCA’s approach after it becomes the first financial regulator to implement its sandbox.
Sophie is the director of both Sophie Grace Legal Pty Ltd and Sophie Grace Pty Ltd. Sophie has worked with some of Australia’s largest financial services organisations in compliance, legal and operational roles. She has also worked with small businesses to provide tailored solutions with a strong understanding of business practicalities as well as obligations to regulators.