Government greenlights regulatory sandbox
Fintechs will now be able to test new products and services for 24 months without the need of an ASIC licence, under new laws recently passed by parliament.
“By removing barriers to entry for new fintechs, the regulatory sandbox will enable greater competition in the financial system, which is critical in ensuring that both consumers and businesses get value for money from the financial products and services they use,” the Minister for Financial Technology Jane Hume said.
To ensure unlicensed testing does not pose a risk to consumers, a range of strong consumer protections will be in place, including limits on the products and services that can be tested and limits on the financial exposures of retail clients.
The Treasury Laws Amendment (2018 Measures No. 2) Bill 2019 builds significantly on a regulatory sandbox launched by ASIC in 2016, expanding the scope of what can be tested and how long businesses can test.
The improvements will enable firms to test specified financial services including financial advice, the issuing of consumer credit contracts and facilitating crowd-sourced funding.
The Bill also makes a number of minor, technical amendments to the early stage Venture Capital Limited Partnership, Venture Capital Limited Partnership and Tax Incentives for Early Stage Investor regimes to ensure that these provisions operate in accordance with their original policy intent.
“A strong fintech ecosystem means a more competitive financial market landscape – one that is consumer-driven, efficient and among the world’s leaders,” Hume said.