Fintech firms easy ASIC targets
Fintech businesses could hinder their ability to apply for an Australian Financial Services Licence (ASFL) or Australian Credit Licence (ACL) if they do not realise early on that they offer financial advice products, The Fold Legal said.
The financial services law firm said that some fintech businesses could become early targets for the Australian Securities and Investments Commission (ASIC) if they unknowingly provide financial services.
"We are concerned that some of these wonderful, innovative companies starting out may be setting themselves up with a target on their backs," The Fold managing director, Claire Wivell Plater, said.
"They need to be either building their business in a way that doesn't provide a financial service, putting boundaries in place to ensure they are not crossing over into providing financial service or biting the bullet and actually getting a licence."
Wivell Plater said that fintech businesses need to be careful that their information or analysis does not turn into financial advice products.
"If, for example, a website contains a recommendation about or even just compares financial products, that's likely to be a financial service," she said.
Wivell Plater added that ASIC is always on the look-out for businesses that are providing credit or financial services without an AFSL.
She said credit service review site could be providing financial or credit services and if they monetise their sites they will need a licence.
"If you're providing a financial or credit service without a licence, then go to ASIC and apply."
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