The Turnbull Government today welcomes the announcement by the Australian Securities and Investments Commission (ASIC) that its FinTech regulatory sandbox is open for business. The regulatory sandbox will enable eligible FinTech businesses to test innovative financial services without facing the costs of regulatory licensing and will reduce the time to get their services to market.
This is the first stage in the Government’s regulatory sandbox agenda. The Government is continuing to look at options to create a second stage legislative sandbox that provides further exemptions for start-up issuers of financial products and services.
The Turnbull Government is committed to ensuring Australia is a globally competitive marketplace, with a fully functioning financial market, that can attract and retain FinTech investment. A technologically advanced financial services sector plays a critical role in allowing businesses and individuals to raise capital and invest.
From today, all eligible businesses will be able to test a range of financial or credit services with up to 100 retail clients and unlimited wholesale clients for up to twelve months without the need to apply for an Australian Financial Services Licence or Australian Credit Licence and without seeking approval from ASIC.
This will assist businesses in developing and refining their offerings prior to licensing – further encouraging innovation in our financial services industry.
Businesses testing services within the regulatory sandbox will be required to maintain key consumer protections, including dispute resolution and compensation arrangements to ensure consumers are adequately safeguarded.
While businesses only need to notify ASIC before they commence their testing, the Government would encourage them to engage confidentially with ASIC’s Innovation Hub as they progress their testing to ensure they are well prepared to proceed with their licence application following the testing phase.
The creation of a regulatory sandbox builds on the existing efforts of the Turnbull Government and the financial regulators to support the growth of the FinTech industry; including tax concessions to encourage investments in early-stage start-ups, the recent introduction of legislation into the Parliament for a crowd-sourced equity funding regime as well as the creation of ASIC’s Innovation Hub and Australian Transaction Reports and Analysis Centre’s (AUSTRAC) dedicated contact point for innovative businesses.
The Treasurer thanked members of the Government’s FinTech Advisory Group for their insights on the development of ASIC’s regulatory sandbox and noted the Government will continue to work with the FinTech industry to develop an environment where Australia’s Fintech can be internationally competitive.
Further information on the ASIC regulatory sandbox can be found on the ASIC website.