The legislation proposes to expand the regulatory sandbox to allow fintech firms “to test a wider range of new and innovative fintech products and services”.
Announcing the proposed legislation, Treasurer Scott Morrison said the new sandbox would "help firms overcome the initial regulatory burden and costs of licensing that may otherwise hinder innovative offerings".
ASIC has been operating its regulatory sandbox since 15 December 2016. However, only a limited range of services have been permitted under the Concept Validation Licensing Exemption environment.
The new proposals will allow firms to test more products and services, including:
- providing holistic financial advice in relation to superannuation, life insurance and domestic and international securities;
- issuing and facilitating consumer credit;
- issuing non-cash payment products; and
- providing a crowd-funding service.
There will be a longer, 24-month testing timeframe during which firms will be able to evaluate the commercial viability of new concepts, Mr Morrison said.
"Firms will need to adhere to robust consumer protections and disclosure requirements including responsible lending obligations, best interests duty, and the need for adequate compensation and dispute resolution arrangements," Mr Morrison said.
Consultation on the draft legislation (and explanatory memorandum) is open until 3 November 2017, and on the draft regulations (and explanatory statement) until 1 December 2017.
