The Australian Government has introduced a legislative framework for an “enhanced regulatory sandbox” to enable new Fintech products and services to be tested in Australia. The proposal is designed to extend the scope of activities beyond that of the regulatory sandbox launched by ASIC in December 2016.
The enhanced regulatory sandbox is intended to:
- further promote Australia’s FinTech capability by supporting start-ups and innovative businesses to develop, test and launch their innovative financial and credit services and products under certain conditions; and
- strike a better balance between encouraging competition and innovation that delivers choice for consumers and minimising risks to consumers or the integrity of the financial system.
Treasurer Scott Morrisoin said, “this is an exciting opportunity that will further cement Australia’s position as a leading Fintech hub in the Asia‑Pacific.
Under the Government’s proposeed framework, firms can test a wider range of Fintech products including:
- providing holistic financial advice in relation to superannuation, life insurance and domestic and international securities;
- issuing and facilitating consumer credit;
- issuing non-cash payment products; and
- providing a crowdfunding service.
This kicks off a consultation on the draft legislation. The Bill extends regulation-making powers to enable an exemption from obtaining an Australian Financial Services Licence (AFSL) and/or an Australian Credit Licence (ACL) under certain conditions for the purposes of testing financial and credit services and products.
Consultation on the draft legislation (and explanatory memorandum) is open until 3 November 2017, and on the draft regulations (and explanatory statement) until 1 December 2017.