The Australian Securities and Investment Commission is to take a page out of the FCA's fintech playbook with the creation of a regulatory sandbox for unlicensed firms to run early stage tests and trials of their services.
Much like its UK counterpart, Asic set up an Innovation Hub in April 2015 to help businesses with innovative ideas navigate financial regulation, support them through the authorisation process and engage with the regulator.
In the year since its inception, Asic has worked with over 80 entities, of which 14 have now been granted a new licence to operate a financial services or credit business.
Commissioner John Price says: "Asic will continue to prioritise assistance to fintech start-ups to promote market efficiencies and benefits for consumers and investors. We will build on our first year’s Innovation Hub experience with a variety of initiatives."
To this end, he says Asic will issue a public consultation paper in June on a proposed regulatory sandbox licensing exemption and other measures.
It is proposed that the sandbox will provide a six-month window for testing of certain financial services with up to a maximum of 100 retail clients. The sandbox will provide for participation by sophisticated investors and incorporate consumer protection measures, such as membership of an external dispute resolution scheme and adequate compensation arrangements that should apply.
Says Price: “Asic anticipates that the proposed regulatory sandbox exemption may bring better financial services to market quicker while being mindful of consumer protection concerns.”