FinTech: Australian Legislators Pass Law to Enhance ASIC’s Fintech Regulatory Sandbox

February 12, 2020 | FinTech, News, Regulations

The amendments passed on Monday extend the scope and timeframe fintechs can spend on the existing ‘sandbox.’

Australia’s ‘Treasury Laws Amendment (2018 Measures No. 2) Bill 2019‘ allows more businesses such as fintechs to test a wider range of new financial and credit products and services without a license from ASIC for up to 24 months. (MONEY|MANAGEMENT)

The bill will substantially enhance the existing regulatory sandbox available to Aussie fintechs. Australia introduced that sandbox in 2016.

It was viewed as unduly restrictive because it was only available to startups working on specific products or services. It also allowed unregulated testing for only up to 12 months.

Just seven fintechs were said to have utilized it.

“As a mature, diverse and internationally connected ecosystem, Australia is an attractive destination for fintech investment globally. The Morrison Government is seizing this valuable opportunity to grow the sector even further,” said Senator Jane Hume, the Assistant Minister for Superannuation, Financial Services, and Financial Technology. “The Morrison Government’s regulatory sandbox will encourage more Australian fintechs to test new products without the red tape that traditionally comes with entering the market.”

Sandbox: Concept testing for fintechs

The explanatory memorandum for the Bill says that the amended and enhanced sandbox will allow businesses (such as fintechs) to market-test the concepts for their services or products prior to seeking to license from ASIC.

The sandbox will allow testing for consumer targeting, delivery channels, marketing, pricing and robustness of the technology.

Moreover, it will also allow businesses to more fully grasp the licensing implications. The enhanced sandbox will, therefore, reduce the effort required in the actual licensing procedure ultimately.

“It will provide a safe environment to help fintechs create a minimum viable product to take to market – to work out if their products and services are robust and have value for consumers,” said Senator Hume.

Checks and balances

“Have we learned nothing? A regulatory sandbox, providing a more flexible environment for entrepreneurs to develop sophisticated financial products. Do you know what that spells to me? One word: risk. These kinds of initiatives will be like burley to sharks,” said Senator Whish-Wilson.

The sandbox will, however, safeguard the risk to consumers from unlicensed testing.

“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,” added Hume.

Related Story:  Australian Watchdog Orders Audit of Paypal for Lapses in Money Transfers

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.

Alt Insights

January 29, 2020

Venture Capital: The Kobe in “Bryant Stibel & Co”

Venture Capital: The Kobe in “Bryant Stibel & Co”

Latest Alternative Investment News
ESG: Graham Clapp Says ESG-Focus is Creating a New Bubble
February 27, 2020     ESG and Sustainability, News

RWC Partners fund manager Graham Clapp warned that sustainable investing trends are poised to form a possible bubble in the markets. He compared it to the tech boom of the 1990s….
Hedge Fund: Whitney Tilson Pumps Berkshire Hathaway as Top Retirement Stock
February 27, 2020     Hedge Funds, News

Former hedge fund manager Whitney Tilson has called Berkshire Hathaway (NYSE: BRK.A) the to retirement stock. Tilson, who now writes for Empire Financial Research, issued a note this week praising…
Liquid Alternatives: Invesco Launches New Sterling Corporate Bond ETF With ESG

Invesco, the fund manager with $1.23 trillion in assets under management as of December 31, 2019, has launched in Europe a new, first-of-its-kind, sterling-denominated, corporate bond ETF with an ESG…
Digital Assets: The SIX Swiss Exchange Buys A Stake in Crypto Trading Platform Omniex
February 27, 2020     Digital Assets, News

SIX Swiss Exchange announced it had struck a partnership agreement last week with San Francisco-based Omniex. The financial terms of the agreement, which also includes the acquisition of a stake…

Scroll to Top