The Government has today released exposure draft legislation and regulations intended to create an enhanced regulatory sandbox to support innovation in financial services.
As announced in the 2017-18 Budget, the FinTech regulatory sandbox will allow a broad scope of activities to be tested without the need to meet all the existing licensing requirements of the Australian Securities and Investments Commission. The enhanced regulatory sandbox will help firms overcome the initial regulatory burden and costs of licensing that may otherwise hinder innovative offerings.
Under the Government’s proposed legislative framework, it is intended that firms will be able to test a wider range of new and innovative FinTech products and services, including:
- providing holistic financial advice in relation to superannuation, life insurance and domestic and international securities;
- issuing and facilitating consumer credit;
- issuing non-cash payment products; and
- providing a crowd-funding service.
The 24‑month testing timeframe aims to improve the ability for firms to evaluate the commercial viability of new concepts, promoting greater competition and delivering more choice for Australian consumers.
Firms will need to adhere to robust consumer protections and disclosure requirements including responsible lending obligations, best interests duty, and the need for adequate compensation and dispute resolution arrangements.
Source: The Commonwealth of Australia