On September 26, 2018, Japan’s Financial Services Agency (JFSA) and Dubai’s Financial Services Authority (DFSA) entered into a FinTech cooperation agreement, recognizing the global nature of innovation in financial services and agreeing to share information about FinTech developments. This framework also establishes a regulatory referral system for FinTech companies from Japan and Dubai wishing to enter the other’s market, with a view to reducing barriers to entry and encouraging innovation in both countries.
The JFSA has previously entered into similar arrangements with the UK’s Financial Conduct Authority (in March 2017), the Monetary Authority of Singapore (in March 2017), the Australian Securities and Investments Commission (in June 2017), Abu Dhabi Global Market’s Financial Services Regulatory Authority (in September 2017) and the Swiss Financial Market Supervisory Authority (in April 2018).
Like many countries, Japan sees G2G cooperation through these FinTech ‘bridges’ as an important contributor to the stable development of the FinTech market at home and abroad. Although Japan has not established its own regulatory sandbox for FinTech start-ups, these cooperation agreements enable the JFSA to learn from the experiences of other financial regulators, thereby facilitating the adoption of consistent regulatory approaches across jurisdictions based on shared experiences.
Existing and new participants in Japan’s financial services industry are actively engaging with (and investing in) innovation projects and consortiums globally, including those focusing on the development and commercialization of blockchain based infrastructure, products and services. G2G frameworks such as the JFSA-DFSA cooperation agreement encourage greater cross-border collaboration and we expect the JFSA to continue to pursue opportunities to enter into similar arrangements with other countries.