ASIC has released class waivers to allow eligible financial technology (fintech) businesses to test certain specified services without holding an Australian financial services or credit licence.
NIBA CEO Dallas Booth said “NIBA has previously advised ASIC that our strong belief is in a level regulatory playing field: regulatory requirements should apply to all financial advice in relation to general and life insurance productds, regardless of the nature of the business.
“It is pleasing to see the ‘fintech’ exemption will only apply in relation to a maximum of 100 clients, with a maximum insured value of $50,000 each for personal property or home contents cover only. The exemption will not be available for commercial insurance products, which is entirely appropriate.”
ASIC Commissioner John Price said, “ASIC’s ‘fintech licensing exemption’ is unique. No other major jurisdiction has implemented a class waiver which allows eligible businesses to notify the regulator and then commence testing without an individual application process.”
ASIC’s fintech licensing exemption allows eligible businesses to test specified services for up to 12 months with up to 100 retail clients, provided they also meet certain consumer protection conditions and notify ASIC before they commence the business.
‘ASIC’s fintech licensing exemption reflects our commitment to facilitating innovation in financial services. However, we are equally committed to ensuring that innovative products and services are regulated appropriately and promote good consumer outcomes,’ Mr Price said.
The fintech licensing exemption was initially proposed in Consultation Paper 260 Further measures to facilitate innovation in financial services (CP 260). ASIC has amended its proposal in light of the feedback received, including extending the testing period and expanding the products in relation to which services can be tested.
Businesses that are not eligible for the fintech licensing exemption are able to seek an individual exemption. ASIC’s policy on exemptions is available in Regulatory Guide 51 Applications for relief (RG 51).
‘Individual applications are an important part of Australia’s regulatory sandbox framework,’ Mr Price said. ‘For instance, this option is open to existing licensees who wish to test an innovative product or service and comply with a modified version of the law.’