FinTech startups around the country may be allowed to operate under more relaxed regulations with the publication of new draft laws by the Australian government.
The new “enhanced regulatory sandbox” will ease licensing requirements for FinTech startups, making it possible to test a wide range of products and services without needing to meet all the licensing requirements of the Australian Securities and Trades Commission. This gives FinTech firms the opportunity to test services for 24 months, as long as they adhere to consumer protections and disclosure requirements.
With the new regulatory framework, FinTech firms can test and work on:
– Issuing and facilitating consumer credit;
– Issuing non-cash payment products;
– Issuing financial advice relevant to superannuation, life insurance, and domestic and international securities; and
– Providing a crowd-funding service.
Australian Federal Treasurer Scott Morrison calls the new draft legislation a “game changer for competition in the financial services sector… [that] will help firms overcome the initial regulatory burden and costs of licensing that may otherwise hinder innovative offerings”.
Consultations on the draft regulations are open until December 1, 2017, when the final draft will be submitted.