US, UK regulators join forces on regulating financial technology firms

US, UK regulators join forces on regulating financial technology firms
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Two top U.S. and British trading watchdogs have agreed to join forces on efforts to help financial technology companies navigate regulations.

The U.S. Commodity Futures Trading Commission (CFTC) and the United Kingdom's Financial Conduct Authority (FCA) on Monday released a cooperation agreement outlining how officials will share information, help businesses in one country operate in the other, and trade notes on best practices and changes in strategy. 

“We believe that by collaborating with the best-in-class FCA FinTech team, the CFTC can contribute to the growing awareness of the critical role of regulators in 21st century digital markets,” said CFTC Chairman J. Christopher Giancarlo.

Both agencies already run programs focused on new regulatory challenges posed by emerging financial technology: LabCFTC in the U.S. and FCA Innovate in the U.K. 

The new pact comes as regulators, lawmakers and banks around the world grapple with emerging online banking, lending and payment services.

"International borders shouldn’t act as a barrier to innovation and competition in financial services and that is why agreements like the one we have signed today with the CFTC, a forward looking and proactive regulator, are so important,” said FCA chief executive Andrew Bailey.

U.S. regulators and lawmakers have homed in on financial technology and the unique regulatory issues it poses. Policymakers have focused primarily on data protection and fraud prevention, fears fueled by the 2017 Equifax breach and a slew of attacks on retailers and websites.

Financial technology advocates say innovative companies face challenges clearing regulatory hurdles in each state due to a lack of cohesive federal policy. The Office of the Comptroller of the Currency, the top U.S. banking watchdog, is working on a charter that would allow approved financial technology companies to operate nationwide without state-by-state approval.