THE Securities Commission Malaysia (SC) on August 24 signed a financial technology cooperation agreement with Indonesia’s Otoritas Jasa Keuangan (OJK) to establish a collaborative framework to develop the fintech ecosystem in both markets.

OJK Indonesia is an Indonesian government agency that regulates and supervises the financial services sector, which includes banking, capital markets and non-bank financial industries sectors.

The agreement between SC and OJK aims to facilitate information sharing on emerging trends and regulatory developments in fintech, provide joint innovation project opportunities and facilitate referrals of fintech businesses seeking to operate in each other’s jurisdiction.

“The signing of this MoU marks an important milestone for both the SC and OJK,” says SC chairman Syed Zaid Albar, who signed the agreement with OJK vice-chairman Ir Nurhaida at the Virtual Innovation Day organized by OJK. “We now share the intention to promote innovation in our respective capital markets. Through greater collaboration, both Malaysia and Indonesia can develop and scale up our fintech industries in support of the Asean Economic Community.”

Given its emerging middle class and high internet penetration rates, SC says the Asean region has the potential to become a thriving centre for innovative businesses and services.

Since 2017, SC had established six fintech agreements with global regulators such as the Hong Kong Securities and Futures Commission, the Monetary Authority of Singapore and the Australian Securities and Investments Commission, among others.

As part of its digital agenda, SC had introduced various fintech initiatives since 2015, such as being the first jurisdiction in the Asia-Pacific to regulate equity crowdfunding. This was followed by regulatory framework for peer-to-peer financing, digital investment management services, digital asset exchanges and others.

In May this year, it introduced the framework for online distribution of capital market products through e-Services platforms like e-wallet or e-payment service providers.