Powered by MOMENTUM MEDIA
subscribe to our newsletter

Fintech regulatory sandbox finalised

The government has announced that it has now finalised its “enhanced” regulatory sandbox, allowing fintechs to test the viability of new products without first holding the required licences.

While the legislation for the fintech regulatory sandbox was passed in February, its complementary regulatory papers have now both received royal assent, with the sandbox due to be available for the testing of new fintech products from 1 September 2020.

Since December 2016, the Australian Securities and Investments Commission (ASIC) has provided a “regulatory sandbox” framework for Australian fintechs, which allows financial products and services to be tested in Australia without obtaining an Australian Financial Services Licence (AFSL) and/or an Australian Credit Licence (ACL).

Under the legislation, held in the Treasury Laws Amendment (2018 Measures No. 2) Bill 2019, the government intends to reform and enhance the regulatory sandbox to better support innovation in the financial and credit product and services sector, as well as minimise risks to consumers of said products and services.

Through that legislation, the regulatory sandbox period was extended from 12 months to 24 months and ASIC was empowered to make decisions over when the licensing exemption starts and ceases to apply, in order to protect the interests of customers.

Advertisement
Advertisement

PROMOTED CONTENT


The complementary papers include both the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020 and the National Consumer Credit Protection (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.

According to senator Jane Hume, assistant minister for superannuation, financial services and financial technology: “The sandbox creates a safe environment for fintech firms to test the viability of new products and services without first holding licences that can be costly and time-consuming to obtain.”

“Innovative firms now have 24 months to test their products with customers in the sandbox before obtaining a financial services licence or a credit licence from ASIC.”

The enhanced sandbox will broaden the range of financial services available for market testing, including services which advise on, or distribute, non-cash payment products, insurance, superannuation, simple managed investment schemes, listed securities and consumer credit contracts between $2,000 and $25,000.

“Robust consumer protections remain in place. Firms will be required to demonstrate that their proposed service is genuinely innovative and is likely to result in net consumer benefit,” Senator Hume said.

“Product limits and caps on aggregate and individual exposures also apply. Firms will be required to have adequate professional indemnity insurance and be a member of the Australian Financial Complaints Authority.”

[Related: New law extends licence exemption for fintechs]

Fintech regulatory sandbox finalised
Fintech regulatory sandbox finalised
mortgagebusiness

Hannah Dowling

Hannah Dowling is a journalist for mortgage business, the leading source of news, opinion and strategy for professionals working in the mortgage industry.

Prior to joining the team at Mortgage Business, Hannah worked as a content producer for a podcast catering to property investors. She also spent 6 years working in the real estate sector at a local agency. 

Hannah graduated from Macquarie University with a Bachelor of Media and Journalism. 

You can email Hannah at: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

The number of first home buyers looking to enter the market has more than doubled since 2019, according to a Westpac survey. ...

The Australian economy is unlikely to see a “lasting drop” in potential growth due to the COVID-19 crisis and should see a sustainable r...

The member-owned bank has reduced rates on fixed rate and variable home loans in response to the RBA’s official cash rate cut announced on...

FROM THE WEB

Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.

JOIN NOW
podcast

LATEST PODCAST: Responsible Lending - what could lie ahead for lenders, brokers and borrowers?

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.