ASIC releases details of the fintech regulatory sandbox
The "fintech licensing exemption" will allow fintech companies to test services for up to 12 months without a licence.
The Australian Securities and Investments Commission (ASIC) has released details of its "world-first" regulatory sandbox. Designed for the fintech industry, the framework allows fintech companies to provide services without a licence for up to 12 months for a maximum of 100 retail clients.
ASIC commissioner John Price said the introduction of the framework was an important step to help the regulator foster innovation.
"Fintech and startup 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."
Fintech companies need to meet certain conditions such as disclosure and conduct requirements to be eligible. There are also limitations related to the products that can be offered. Those looking to take advantage of the framework will also need to notify ASIC before they commence the business.
While the requirements exclude some businesses, an ineligible business can apply for an individual exception.
"Individual applications are an important part of Australia’s regulatory sandbox framework," Price said. "For instance, this option is open to existing licencees who wish to test an innovative product or service and comply with a modified version of the law."
According to Price, the framework developed by ASIC 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 also said that ASIC is committed to ensuring innovative products and services are regulated properly and promote good consumer choices. Businesses looking to take advantage of the scheme can review the terms on ASIC's website, and also use the following infographic as a guide.