The Australian Securities and Investments Commission (ASIC) today released class waivers which will allow eligible fintech businesses to test certain specified services without the need to hold an Australian Financial Services (ASF) or credit licence.
So far, ASIC’s fintech licencing exemption is unique as no other major jurisdiction has implemented such a class waiver, allowing eligible businesses to notify the regulator and then commence testing without the requirement for an individual application process.
The exemption reflects ASIC’s commitment to facilitating innovation in financial services.
ASIC also released a corresponding regulatory guide entitled “Testing fintech products and services without holding an AFS or credit licence (RG 257)” which contains information about Australia’s ‘regulatory sandbox’ framework.
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ASIC Commissioner John Price commented: “Fintech and start-up businesses now have more pathways than ever to begin testing the viability of innovative financial services and credit services consumers, before incurring many of the regulatory costs normally associated with running their business.”
Fintech Licencing Exemption
ASIC’s fintech licencing 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 their business.
The exemption was initially proposed to facilitate innovation in financial services. ASIC 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 which are not eligible for the fintech licencing exemption may seek an individual exemption. “Individual applications are an important part of Australia’s regulatory sandbox framework,” continued Price. “For instance, this option is open to existing licencees who wish to test an innovative product or service and comply with a modified version of the law,” he added.
Information about the services covered by the fintech licencing exemption can be found on ASIC’s website.