DFSA and SFC sign FinTech Cooperation Agreement

Under the agreement, both authorities will share information on developments and innovations in FinTech in their respective markets.

The Dubai Financial Services Authority (DFSA) and the Securities and Futures Commission (SFC) in Hong Kong entered into an agreement to establish a framework of cooperation on financial technology (FinTech) innovation. The agreement will further strengthen the efforts of both authorities to develop an innovations-friendly ecosystem in their respective markets.

The signing took place between Ian Johnston, chief executive of the DFSA, and Ashley Alder, chief executive of the SFC, in Hong Kong.

Under the agreement, both authorities will share information on developments and innovations in FinTech in their respective markets. The agreement also intends to encourage both regulators to refer innovative firms to one another’s markets and to provide them with regulatory guidance.

Johnston said, “Providing a regime that fosters innovation in the Dubai International Financial Centre (DIFC), is a strategic priority for us. This agreement with Hong Kong’s SFC deepens cooperation between our two markets and will build a common understanding of the principles of good innovation.”

“This agreement underscores the SFC’s efforts to strengthen regulatory collaboration and promote innovation in financial services. We look forward to working closely with the DFSA to support FinTech development in both our markets,” said Alder.

The agreement extends the existing relationship between the SFC and the DFSA with a joint commitment to maintain the highest standards of cooperation. Both regulators are signatories to the IOSCO Multi-lateral Memorandum of Understanding (MMoU). They also entered into a bi-lateral MoU in 2008.

The agreement marks the latest step in the DFSA’s roadmap to build a framework that supports innovation in the DIFC. It follows the introduction of regulations formalising a tailored regime for loan and investment crowdfunding platforms on August 1, the first in the GCC. On May 24, the DFSA launched its Innovation Testing Licence (ITL), a special class of financial services licence that allows FinTech firms to develop and test innovative FinTech concepts from the DIFC.

For its part, the SFC established the FinTech Contact Point (FTCP) in March 2016 to enhance communication with businesses involved in the development and application of FinTech and regulatory technology in Hong Kong. The FTCP also facilitates an understanding of the SFC’s current regulatory regime while enabling it to stay informed of the development of the local industry.