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Malaysia and Australia seal agreement on fintech cooperation

Malaysia and Australia seal agreement on fintech cooperation article image

The Malaysia Securities Commission ('SC') and ASIC have signed a Co-operation Agreement to support and promote financial innovation in each economy.

The agreement is similar to the cooperation agreements ASIC has entered into with Hong Kong and Japan in recent weeks. It will enable the SC and ASIC to refer innovative fintech businesses to each other for advice and support via ASIC's Innovation Hub and its Malaysia equivalent, the SC's 'alliance of FINtech community' ('aFINity').

Malaysia is a vibrant fintech destination.

In 2015, Malaysia became the first Asia Pacific nation to regulate for equity crowdfunding. High levels of digital adoption and internet penetration in Malaysia make it an attractive market.

This agreement expands ASIC's fintech cooperation network in Asia.

Investment in fintech in Australia has been growing exponentially over the past few years, with total investment in 2016 reaching $8.6 billion, up from $0.5 billion in 2013.

Opportunity for growth

The federal government has identified the fintech sector as a key opportunity for growth.

According to a recent report by Ernst & Young Australia ranks fifth in the world for fintech adoption, with one in three digital consumers using fintech technologies.

The Malaysia agreement provides a framework for information sharing between the country’s two regulators, enabling ASIC to keep updated on regulatory and economic developments in Malaysia that can inform Australia’s own regulatory approach.

The Innovation Hub and aFINity offer assistance to innovative fintech businesses to understand the regulatory regimes in each of their jurisdictions. This Agreement means Australian fintech businesses wanting to operate in Malaysia will now have a simple pathway for engaging with the SC, and vice versa.

Need to manage digital risks

Signing the agreement, ASIC Chairman Greg Medcraft said: “International cooperation on fintech is essential. This agreement will help local businesses grow beyond our borders, and improve our understanding of fintech in the region.”

SC Chairman Ranjit Ajit Singh said: “Even as we continue to enable new forms of innovation in capital markets, we must not lose sight of the need to manage digital risks, by taking a strategic approach to risk management, recruiting digital talent and improving IT architectures. This collaboration between SC and ASIC in the realm of digital finance will further strengthen the co-operative arrangements between Malaysia and Australia in capital market development and regulation”.

This is the sixth fintech referral agreement ASIC has entered into, following on from agreements with the United Kingdom, Singapore, Ontario, Hong Kong and Japan.

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