Australia’s chief corporate regulator ASIC has secured a cooperation agreement with the Swiss Financial Markets Authority (FINMA) which seeks to boost fintech innovation and support start-ups’ regulatory compliance across both markets.
Under the agreement, ASIC and FINMA will exchange fintech-relevant information on regulatory and policy issues within each market, including innovation in financial services as well as market trends and developments.
The reciprocal agreement will provide a support network for Swiss and Australian fintechs to ensure compliance with regulatory and legal requirements in each country.
ASIC Chairman Greg Medcraft, who signed the agreement in Madrid last week, said the deal will “[open] up another key financial centre for Australian fintech expansion,” and expand ASIC’s innovation cooperation network within continental Europe.
The agreement will also allow ASIC and FINMA to refer “innovative businesses” to each other, with a commitment to provide the same level of support offered to local fintechs.
Despite its reputation as one of the world’s preeminent financial service centres, Switzerland’s start-up industry remained – until recently – relatively muted. Intensified government investment and a loosening of regulatory restrictions in recent years has borne fruit for Switzerland’s emerging fintech industry.
On current estimates, more than 200 fintech start-ups now operate in Switzerland, specialising in areas such as wealth management, comparative consulting, crypto finance, data management, payment services and lending.
In August this year, Switzerland eased a number of regulatory rules governing fintechs, creating a specially designated ‘fintech licence’ for local financial services start-ups. The licence extends a range of benefits to Swiss start-ups, including a provision to allow fintechs to accept client deposits up to CHF1 million (AU$1.3 million) without triggering a banking licence requirement, and up to CHF100 million in total for each client.
Switzerland’s two largest banks, Credit Suisse and UBS, were also principal financial backers of the Kickstart start-up hub, touted as “Europe’s largest multi-corporate and equity-free accelerator program”.
According to ASIC, investment is a key element of contemporary ties between Australia and Switzerland. The Central European state, among the world’s preeminent banking centres, is Australia’s tenth-largest source of foreign investment, worth an estimated $50.2 billion at the end of 2015.