In brief - Budget 2017 includes some good news for fintechs
In our April article entitled "Regulatory sandbox: room for fintechs to play
", we discussed how the changes to ASIC's regulatory sandbox framework would allow financial technology businesses (fintechs) to test the viability of their services without the usual barriers associated with providing financial services or engaging in credit activities. There have been some updates to this position as a result of the release of the Federal Government's 2017 Budget.
Government plans to expand scope of eligible businesses and extend licensing exemption timeframe
In the Federal Government's 2017 Budget announcement on 9 May 2017, the Federal Government committed to legislating to expand the scope of businesses which qualify for the regulatory sandbox and to extend the timeframe of the licensing exemption from 12 months to 24 months.
The Government has committed to expanding the scope of the regulatory sandbox such that it is applicable to more businesses to test a wider range of financial and credit services. This new scope of services is expected to include the provision of more holistic financial advice, issuing consumer credit, offering short-term deposit or payment products, and operating a crowd-sourced equity funding intermediary.
Consumer protections and disclosure requirements unchanged
The consumer protections and disclosure requirements currently in place will remain, including those in relation to responsible lending obligations, best interest duty, and the need for adequate compensation and dispute resolution arrangements.
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