TORONTO British and Canadian regulators have signed an agreement to make it easier for financial technology companies to expand in each other's markets, they said on Wednesday.
The agreement between the UK's Financial Conduct Authority and the Ontario Securities Commission is meant to help fintech startups navigate regulations. The OSC, Canada's largest and most influential securities regulator, and FCA will also share information on trends and regulatory issues involving financial services innovations.
Both regulators already have their own fintech initiatives in place to help startups meet compliance requirements and test products under their supervision.
Fintechs typically use technology to provide cheaper, more accessible and more efficient financial services such as payments, money transfers or trading. The global fintech sector has boomed in recent years, with startups securing billions of dollars in financing annually.
Complicated regulations can prove challenging for companies looking to innovate and grow quickly.
Canada, particular, has a fragmented regulatory environment. For example, fintechs may need separate approvals from each province to operate.
Central banks have also expressed concern that fintechs could threaten financial stability and raise security issues such as money laundering, terrorism financing and data protection, and therefore require greater oversight.
(Reporting by Solarina Ho; Editing by Lisa Von Ahn)