The Financial Services Agency of Japan and the UK’s Financial Conduct Authority have exchanged letters of co-operation to support each other's innovative financial IT companies.

This exchange of letters - an unusual method for such deals - between the two regulatory giants promises the setting-up of a regulatory referral system for innovative businesses from Japan and the UK that want to enter each other’s market. When either authority receives an "innovator business referral" it will support the businesses in question by reducing "regulatory uncertainty" and time to market. In addition, the letters will encourage the regulators to share information about financial service innovations in their respective markets, to reduce barriers to entry in a new jurisdiction and to redouble their efforts to encourage innovation in both countries.

For Japan, this exchange of letters will encourage Japanese start-up companies to co-operate with innovative financial businesses all over the world and will attract British companies to Japan's shores. For the UK, the FCA has an overarching statutory objective as a regulator to make the financial sector work well and promote competition through innovation.

A Japanese official noted at the signing ceremony that the UK was one of the world-leading fintech countries, generating £6.6 billion in revenue.