The Australian government passed the Treasury Laws Amendment (2018 Measures No. 2) Bill 2019 on February 10, 2020. The bill has been introduced in order to extend the overall scope and time period Fintech firms may spend on the country’s current framework.
Updating the existing regulatory guidelines will allow local Fintech companies to test their products over a two-year period without needing a financial services or credit license. Australian consumers will be offered protection from the potential risk of unlicensed (or unauthorized) testing procedures.
This includes several strong consumer protections, which will be put in place to ensure consumer safety. For instance, the protections will limit or place restrictions on certain products and services and the financial exposures of retail consumers.
The updated guidelines will be welcoming local business owners who were previously not able to gain access to the sandbox. This will reportedly include businesses that were issuing consumer credit contracts, handling crowdsourced funding and those focused on offering financial advice.
The bill was first introduced back in 2016, and at that time, the Australian Securities and Investment Commission’s (ASIC) sandbox was supported by the nation’s government because they believed that it would pave the way for Fintech innovation. But later, strict regulatory guidelines were introduced, which led to very few Fintech firms being able participate in the sandbox program.
According to a statement issued by the Treasury, assistant minister Jane Hume noted that a strong Fintech ecosystem means “a more competitive financial market landscape – one that is consumer-driven, efficient and among the world’s leaders.”
The Australian government’s sandbox program aims to support more local Fintech firms in testing out new products “without the red tape that traditionally comes with entering the market. As a mature, diverse and internationally connected ecosystem, Australia is an attractive destination for fintech investment globally.”
Australia’s competition regulator recently finalized the guidelines which apply to the nation’s Consumer Data Right regulations, setting up the scene for adopting Open Banking in the country.
The update will mandate the nation’s “Big Four” banks to share product data with each other. It will also introduce legislative force to the consumer data-sharing guidelines which will become effective from July of this year.