July 3, 2020

Volume X, Number 185

July 02, 2020

Subscribe to Latest Legal News and Analysis

July 01, 2020

Subscribe to Latest Legal News and Analysis

June 30, 2020

Subscribe to Latest Legal News and Analysis

ASIC Fintech Sandbox Here to Stay

The Australian Securities & Investments Commission (ASICreleased a consultation paper on 12 December 2017 seeking feedback on its fintech licensing exemption, also known as the regulatory sandbox.  Following comment, ASIC will review whether the exemption is operating as intended, and consider whether it should be broadened or changed in any other way.

The licensing exemption allows eligible businesses to provide certain financial products and services for up to 12 months without a valid Australian Financial Services or credit licence.  Contrary to the strategy of the UK Financial Conduct Authority, ASIC does not take an active approach in selecting applicants and negotiating individual terms for each entity using the exemption.

Although only 4 businesses have used the fintech licensing exemption since its inception 12 months ago, ASIC considers that the existence of the exemption has encouraged fintechs to approach ASIC for assistance where they might not have otherwise.

As mentioned in our previous blog, the Australian Government has committed to enhancing the regulatory sandbox to allow more businesses to test a wider range of financial products and services, with an extended 24 month testing timeframe.  As such, ASIC considers that it would be inappropriate to amend the existing exemption until that legislation is passed.

The consultation period ends on 27 February 2018.

Edwin Tan also contributed to this post.

Copyright 2020 K & L GatesNational Law Review, Volume VII, Number 354


About this Author

Jim Bulling, KL Gates, financial services lawyer, funds management attorney

Mr. Bulling's practise focuses on banking and financial services and he acts for a range of entities in the financial services and funds management industry. His clients include Australian and international investment managers, banks, trustees of superannuation funds, wholesale and retail investment trusts, funds management companies and financial planning groups.

His main areas of focus include banking and financial product disclosure issues, financial services compliance issues, financial product distribution issues and superannuation and...

Michelle Chasser, KL Gates, financial services compliance lawyer, disclosure obligations attorney

Ms. Chasser is a corporate and regulatory lawyer with a focus on the superannuation and financial services industries. Ms. Chasser advises clients on a range of issues including compliance with Australian regulatory and licensing requirements, financial services compliance issues and disclosure obligations.

Ms. Chasser's clients include superannuation fund trustees, banks, wholesale and retail fund managers, as well as financial service providers.