On Thursday, the Australian Securities and Investment Commission (ASIC) announced a licensing exemption that will allow eligible financial technology (also known as fintech) businesses to test certain specified services without holding an Australian financial services or credit license.
According to the ASIC, the fintech licensing exemption allows eligible businesses to test specified services for up to 12 months with up to 100 retail clients, provided they also meet certain consumer protection conditions and notify ASIC before they commence the business. While sharing details about the exemption, ASIC Commissioner John Price stated:
“ASIC’s ‘fintech licensing exemption’ is unique. No other major jurisdiction has implemented a class waiver which allows eligible businesses to notify the regulator and then commence testing without an individual application process.”
Price then explained:
“Fintech and start-up businesses now have more pathways than ever to begin testing the viability of innovative financial services and credit services consumers, before incurring many of the regulatory costs normally associated with running their business. ASIC’s fintech licensing exemption reflects our commitment to facilitating innovation in financial services. However, we are equally committed to ensuring that innovative products and services are regulated appropriately and promote good consumer outcomes.”
ASIC then noted businesses that are not eligible for the fintech licensing exemption can seek an individual exemption. Price added:
“Individual applications are an important part of Australia’s regulatory sandbox framework. For instance, this option is open to existing licensees who wish to test an innovative product or service and comply with a modified version of the law.”