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Regulators in United Kingdom and Japan Enter Into Co-Operation Framework

The Financial Services Agency of Japan (JFSA) and the UK’s Financial Conduct Authority (FCA) have entered into a Co-operation Framework to support innovative FinTech companies in their respective markets. For the full text of the agreement by way of an exchange of letters, see Letter from the JFSA to the FCA and Letter from the FCA to the JFSA.

This Co-operation Framework will provide a regulatory referral system for innovative financial businesses that have been offered support by the JFSA or the FCA through their respective FinTech innovation functions, or would qualify for such support (an Innovator Business). The FCA launched Project Innovate in October 2014 which is led by the FCA’s Innovation Hub. The JFSA established its FinTech Support Desk in December 2015 as a one-stop contact point for FinTech businesses.

The authority that receives an Innovator Business referral will provide support to the Innovator Businesses by reducing regulatory uncertainty and time to market. In addition, the Exchange of Letters is designed to encourage the regulators to share information about financial services innovation in their respective markets, reduce barriers to entry in each other’s jurisdictions and further encourage innovation in both countries.

For Japan, this Exchange of Letters aims to encourage Japanese start-up companies to engage with innovative financial businesses globally, to attract UK FinTech companies to the Japanese market and to contribute to stimulating the economy.

For the UK, the FCA has a statutory objective as a regulator to make financial services markets function well. Competition through innovation forms a significant part of this. The Exchange of Letters is intended to provide knowledge to UK firms hoping to enter the Japanese market and to assist Japanese innovators interested in entering the UK market.

Copyright 2020 K & L GatesNational Law Review, Volume VII, Number 79


About this Author

Jonathan Lawrence, KL Gates Law Firm, Restructuring and Insolvency Attorney

Jonathan Lawrence has been a finance partner in the London office since 2005.

Alongside his general banking and finance work, he concentrates his practice on restructuring & insolvency matters -- Legal 500 UK 2016 Corporate restructuring and insolvency “K&L Gates LLP … maintains a ‘quality team’ that includes ‘impressive’ team head Jonathan Lawrence”.

Mr. Lawrence also plays a leadership role in the firm’s global Islamic Finance practice -- Legal 500 UK 2016 Islamic Finance “K&L Gates LLP is...