The framework will see the JFSA and ASIC share information and support the entry of fintech businesses into each other's markets, with ASIC flagging the Japanese economy as the third largest in the world for services -including financial services - accounting for approximately three quarters of GDP in the country.

Refer innovative fintech businesses

According to ASIC, the agreement will enable both parties to refer innovative fintech businesses to each other for advice and support via ASIC's Innovation Hub aimed at helping fintech businesses navigate Australia's regulatory framework without compromising investor and financial consumer trust and the JFSA's FinTech Support Desk.

A framework for sharing

It will also provide a framework for information sharing between the two regulators which is expected to enable the JFSA and ASIC to keep abreast of regulatory and relevant economic or commercial developments in each other's jurisdictions, and help to inform local approaches to regulation.

Actively involved in encouraging fintech

ASIC Commissioner John Price said the JFSA had been actively involved in encouraging fintech through a range of measures including the modification of the legal system to enable financial groups to invest in finance-related IT companies more easily. Mr Price also said the Japanese regulator had been working on the establishment of a legal framework for virtual currency and Open API which is expected to encourage the country's fintech startups to engage with financial businesses globally.

Latest agreement in Asia

Earlier this month ASIC signed an arrangement with the Hong Kong Securities and Futures Commission (SFC) to provide mutual support to fintech businesses from Australia and Hong Kong seeking to operate in each other's markets. Similar to the agreement signed with the JFSA, ASIC and SFC will refer fintech businesses to each other for advice and support via ASIC's Innovation Hub and its Hong Kong-based equivalent, SFC's Fintech Contact Point.