The Federal Government is finalising regulations to make it easier for fintech businesses to trial new products in an enhanced regulatory sandbox, which will be available from 1 September, 2020.
Parliament had previously passed the law in February, to provide a boost to Australia’s fintech market by reducing barriers to entry and promoting competition.
The sandbox would allow fintech firms to test the viability of new products and services without holding licences.
It would have 24 months to test products with customers, before being required to obtain a financial services licence or a credit licence from the Australian Securities and Investments Commission (ASIC).
The sandbox broadened the range of financial services available to market testing, including services that advise on or distribute non-cash payment products, insurance, superannuation, simple managed investment schemes, listed securities and consumer credit contracts between $2,000 to $25,000.
Senator Jane Hume, Assistant Minister for Superannuation, Financial Services and Financial Technology, said robust consumer protections remained in place.
“Firms will be required to demonstrate that their proposed service is genuinely innovative and is likely to result in net consumer benefit,” Hume said.
“Product limits and caps on aggregate and individual exposures also apply. Firms will be required to have adequate professional indemnity insurance and be a member of the Australian Financial Complaints Authority [AFCA].”