ASIC to offer fintech startups a sandbox to play in first

ASIC has offered an update on its Innovation Hub, which has been running for about a year. The Hub helps fintech start-ups get through the regulatory maze intact, by offering guidance and support measures. 

In June, a consultation paper will be issued on a regulatory sandbox licensing exemption, plus some other measures, as discussed. 

Feedback is being sought on proposals to provide us with greater clarity and guidance on assessing whether new businesses have the legs they'll need to be granted an ASIC licence, and discussions of how flexible these skills and experience can be. There is the possibility for businesses to have an early testing and trial licence - a regulatory sandbox exemption - to allow a business to cut its teeth in the real market, without a full commitmentment by both regulators and the company. 

The regulatory sandbox exemption

Features are to include:

  • Six months for testing certain financial services that are conducted without a licence
  • Restrictions on service offerings in the testing phase, including products those services relate to
  • Sophisticated investors can participate, with some retail clients (up to 100), with separate monetary exposure for those clients
  • Consumer protections, like external dispute resolution services and compensation requirements
  • Modified conduct and disclosure obligations

The Innovation Hub

The Australian Securities and Investments Commission (ASIC) has set up the Innovation Hub, which is a physical place for co-working space for startups in the financial tech industry. 

The Innovation Hub