The Australian Securities and Investments Commission (ASIC) yesterday released a review of its regulatory sandbox, proposing to retain class waivers known as the fintech licensing exemption.
ASIC’s current fintech licensing exemption would allow eligible businesses to test specified services for up to 12 months with up to 100 retail clients. To do so, they must meet certain consumer protection conditions and notify ASIC before they commence the business.
The waivers would allow eligible fintech businesses to test certain services without holding the Australian financial services or credit licences that would usually be required. In the twelve the exemptions have been in place, only a few companies have already utilised this arrangement, or appear to be planning to do so.
Of the four businesses to already use the exemption, one business did so to test its financial services and one to test acting as an intermediary and to provide credit assistance. Two are currently testing advisory and dealing services in deposit products.
ASIC commissioner, John Price believed that the exemption gave fintech businesses the opportunity to test their ideas without needing a licence.
“Even in cases where interested fintechs have discovered that they were not able to make use of the fintech licensing exemption, we have found that its introduction has encouraged businesses to come forward and consider their other options that result from the flexibility in ASIC’s existing regime,” he said.
The ASIC review coincided with consideration by the Federal Treasury of feedback to its exposure draft legislation and regulations that relate to the Government’s enhanced sandbox proposal.
The Government’s draft proposal would extend the scope of ASIC’s licencing exemption into a number of areas. These would include the testing period, caps, limits and the number of times a business could utilise the sandbox.