Parliament has passed new laws to create a ‘fintech regulatory sandbox’ allowing fintechs to test new products and services for 24 months without obtaining a financial services licence or credit licence from the Australian Securities and Investments Commission (ASIC).
The aim was to allow fintechs the opportunity to develop a minimum viable product to take to market and work out if it had value for consumers.
The Treasury Laws Amendment (2018 Measures No. 2) Bill 2019 would build on a regulatory sandbox launched by ASIC in 2016, which expanded the scope of what – and for how long – businesses can test.
This would allow firms to test specified financial services including financial advice, issuing of consumer credit contracts and facilitating crowd-sourced funding.
Senator Jane Hume, the Assistant Minister for Superannuation, Financial Services and Financial Technology, said this would enable greater competition in the financial system.
“A strong fintech ecosystem means a more competitive financial market landscape – one that is consumer-driven, efficient and among the world’s leaders,” Hume said.
“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.
“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.”
The bill also made minor technical amendments to the Early Stage Venture Capital Limited Partnership, Venture Capital Limited Partnership and Tax Incentives for Early Stage Investor regimes to ensure these provisions operating in accordance with policy intent.
