As previously mentioned, fintechs in Australia have recently received a gift from ASIC in the form of an exciting and world-first "regulatory sandbox" initiative. These regulatory exemptions give Australian fintechs the opportunity to enter the market and test their products where they were previously held back by restrictive red-tape.
Under ASIC's recently released regulatory exemptions, eligible fintechs will be able to test certain products on the market for up to 12 months without requiring an Australian Financial Services Licence (AFSL) or an Australian Credit Licence (ACL).
This is exciting news for many fintechs that have found it difficult to really develop their businesses due to the high costs of obtaining these financial licenses.
To be eligible for this licensing relief, your fintech must:
• have no more than 100 retail clients;
• plan to test for no more than 12 months;
• have total customer exposure of no more than AU$5 million;
• have adequate compensation arrangements (such as professional indemnity insurance);
• have dispute resolution processes in place;
• meet disclosure and conduct requirements; and
• comply with the relevant responsible lending obligations.
If your fintech meets the applicable criteria (including product eligibility requirements), then you are entitled to rely on ASIC's licensing exemptions for a 12-month period; giving you the opportunity to test out your fintech in the marketplace.
We already work with a few fintechs and have many years advising in the financial services sector in Australia, so get in touch with us and let us partner with your fintech.
The team at Motus Legal