The Government has introduced the Treasury Laws Amendment (2018 Measures No. 2) Bill 2019 into Parliament to extend the fintech sandbox application. Background.

The sandbox lets new and innovative FinTech products and services to be tested in Australia without obtaining a licence from ASIC.

If the Bill is passed it will amend the Corporations Act 2001 and National Consumer Credit Protection Act 2009 to expand ASIC’s regulation-making powers to provide for exemptions from the Australian Financial Services Licence and Australian Credit Licence requirements for the purposes of testing financial and credit products and services under certain conditions.

The enhanced regulatory sandbox recognises that innovation is not limited to new offerings previously unseen in the market, but may encompass improvements to specific elements of a product or service, drawing on practices from other industries, or combining elements together in new ways to deliver benefits for consumers.

The enhanced regulatory sandbox is intended to allow businesses to confirm their concept through initial market testing prior to seeking the appropriate licence from ASIC. It will let businesses test matters such as the interest of the intended consumer segment, delivery approach, clarity of marketing and communications, pricing structures or the reliability of the technology. Testing in the enhanced regulatory sandbox is expected to assist businesses to ascertain the requirements for licensing and reduce the burden for the business in subsequently seeking a licence from ASIC.

If an entity fails to meet any of the prescribed conditions, ASIC may cancel the entity’s exemption or apply to the court for an order requiring the entity to comply in a particular way.