Only five financial technology companies have actually made use of the Australian Securities and Investments Commission (ASIC) regulatory sandbox.
ASIC senior executive, Mark Adams has told the Senate Economics Legislation Committee that only five firms are actually using the sandbox, with the regulator telling many others that they could use other exemptions under the law.
Facing questioning about the impact of Government moves to inject more flexibility into the sandbox arrangements, Adams confirmed that there were other avenues open to many of the firms who had sought to use the sandbox arrangements.
“… we have now had five making use of the sandbox, and up until now we’ve had about 20 entities expressing interest in it,” he said. “In some of those instances, we’re actually able to say, ‘Well, you don’t need to rely on our sandbox; you can conduct that business already under existing exemptions under the law’”
Adams said that one of the virtues of the sandbox was that it encouraged people to inquire, which could prove helpful for them.
Asked whether ASIC was disappointed that just five firms were using the sandbox, ASIC commissioner, John Price said he was not surprised and, like Adams, pointed to the number of firms which had been pointed to “other exemptions, so they didn’t even need to use the sandbox”.
“We have a number of other exemptions that exist across our regulatory regime that people are able to avail themselves of,” he said. “But, importantly, and this is a very important point, our sandbox only applies to fin-tech start-ups. So, if you already have a licence, or a related body of yours has a licence, you’re not eligible for ASIC’s regulatory sandbox.”
Price said the thinking behind this approach was that if a firm was already in the licensing system it should be able to work its way through and get some of variation to its license.
