ASIC released a consultation paper seeking comments on the regulatory approach they should adopt for start-ups and proposed further measures to facilitate innovation in financial services, including a regulatory sandbox licensing exemption.
In the media release, ASIC Commissioner John Price said, “ASIC is committed to facilitating innovation in financial services, especially where it has the potential to improve consumer outcomes. We are looking forward to engaging with industry on the proposed measures.”
Building on ASIC’s experience through its Innovation Hub, ASIC has identified some barriers faced by new financial technology (fintech) businesses seeking to enter the financial services market. These barriers include speed to market and meeting the organisational competence requirements of a licensee.
In seeking to address these specific barriers to innovation in financial services, ASIC is proposing to:
- provide examples on how ASIC exercises its discretion under existing policy to assess the organisational competence of a licensee applicant;
- modify ASIC’s policy on organisational competence of a licensee to allow some limited-in-scale, heavily automated businesses to rely, in part, on compliance sign-off from a professional third party to meet their competence requirements; and
- implement a limited industry-wide licensing exemption to allow start-ups to test certain financial services for six months (the ‘regulatory sandbox’ exemption).
Mr Price said, “We believe the measures proposed in this consultation paper will help to lower barriers to entry faced by fintech start-ups by providing cost reductions and promoting efficiency in the provision of financial services whilst maintaining the fundamental principles of the regulatory and licensing framework.”
The closing date for submissions is Friday 22 July 2016.
NIBA is reviewing the Consultation Paper, and we will make a submission in due course, and would be happy to hear from any broker who has views about how ASIC regulation should apply to start-ups and people wanting to introduce new and different business models.
Please direct any questions or suggestions to NIBA CEO Dallas Booth.