ASIC will have greater flexibility to make decisions about how exemptions operate under its regulatory sandbox framework.
The government has introduced a bill, Treasury Laws Amendment (2018 Measures No.2) Bill 2019, to enhance the sandbox regime, allowing more businesses to test a wider range of products and services – and for a longer time.
The change is intended to allow businesses to confirm their concept through initial market testing prior to seeking the appropriate licence from ASIC.
According to the explanatory memorandum accompanying the bill: “The enhanced regulatory sandbox recognises that innovation is not limited to new offerings unseen in the market, but may encompass improvements to specific elements of a product or service.”
ASIC has had a regulatory sandbox framework since 2016, allowing fintechs to test their products and services without having to obtain a financial services or credit licence.
“As the market changes and develops, it is important to have the flexibility to make changes to the types of eligible products and services to ensure the exemption operates appropriately,” the memorandum says.
Sandbox-themed initiatives are gaining prominent at ASIC, with the corporate regulator late last month emphasising that, alongside global peers, “it is listening to stakeholders, and welcomes feedback in order to ensure that [global regulators] continue to add value”.
ASIC is part of the Coordination Group for the year-old Global Financial Innovation Network, described late last month by ASIC as “a global dialogue with 35 Member Regulators and seven Observers from 21 jurisdictions. And it continues to grow.”
As part of the GFIN network ASIC is assessing two of eight applications for a “cross-border testing pilot”; one from Ascent RegTech and the second from Starling Trust.