The Treasurer has released a policy statement “Backing Australia’s Fintech” which outlines the Government’s approach to facilitating innovation in financial services including its regulatory response to fintech.
A key element of that policy is the co-ordination of the regulators’ approach to technology providers for the financial services sector including start-ups.
The policy makes specific reference to:
- changes in primary banking accounts, payments, capital markets, investment management and insurance;
- new approaches like crowdfunding, peer‑to‑peer lenders, mobile payments, digital currencies such as Bitcoin, and robo‑advisers; and
- innovative delivery platforms and new services made possible by increased availability of data.
The Government’s regulatory response focusses on the following areas:
- Comprehensive credit reporting and data
- Financial robo-advice
- Insurance
- Crowdfunding
- Blockchain technology and digital currencies
- Payments systems
- Regulatory sandbox
- Venture capital.
The concept of a “regulatory sandbox” is a “safe harbour” in which businesses can test their product or model before obtaining the relevant licences.
The Government has been working with ASIC on the development of a ‘regulatory sandbox’ for Australian FinTech.
The Government notes that ASIC currently has, and uses, a number of sandbox‑like powers to reduce regulatory burdens on businesses, by granting waivers (or relief) from the law to facilitate business.
With respect to “digital currencies” the Government announced that:
- it is committed to addressing the ‘double taxation’ of digital currencies and will work with the industry on legislative options to reform the law relating to GST as it is applied to digital currencies;
- it is considering the application of AML/CTF laws to digital currencies as part of the current statutory review of the AML/CTF Act due to be released in 2016.
peer-to-peer lending
Robo-advice
