Regulatory sandbox

Australia’s regulatory sandbox framework is comprised of three broad options for testing a new product or service without a licence. The information on this page is designed to help you determine whether your business may be able to rely on the fintech licensing exemption and how to go about advising us on this. It also provides examples of other relief that ASIC provides outside of this framework.

ASIC has released a world-first class waiver to allow eligible fintech businesses to test certain specified services for up to 12 months without an Australian financial services or credit licence.

Australia’s regulatory sandbox framework is comprised of three broad options for testing a new product or service without a licence. Those options are:

  • relying on existing statutory exemptions or flexibility in the law – such as by acting on behalf of an existing licensee;
  • relying on ASIC’s ‘fintech licensing exemption’ for the testing of certain specified products and services; and
  • for other services, relying on individual relief from ASIC.

More information about each of these options is available in RG 257.

Other relief from the law

In addition to the fintech licensing exemption, ASIC has existing relief powers in certain areas that you may wish to consider.

Specifically, ASIC has powers to:

  1. provide exemptions from the licensing requirements for products or services (or classes of products or services); and
  2. modify some of the laws we administer.

Our policy on granting relief is set out in RG 51, with the general requirements for application under RG 51.25-51.26.

Examples areas of relief provided from the requirement to hold a licence

  1. Services in relation to ‘low value’ non-cash payment products, where the maximum balance on any one product is $1,000 and the maximum aggregate balance on all facilities in the class is $10 million. See RG 185 and ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211
  2. Some services in relation to mortgage offset accounts. See Class Order [CO 03/1048] Mortgage offset accounts
  3. The provision of generic financial calculators. See Section D of Regulatory Guide 167 Licensing: Discretionary powers (RG 167) and ASIC Corporations (Generic Calculators) Instrument 2016/207
  4. The use of innovative forms of disclosure and, where providers are concerned that there are remaining regulatory barriers, we are open to granting individual relief to facilitate the use of these kinds of disclosure where they are consistent with ASIC’s Good Disclosure Principles. See Section B (RG 221.64-65) of Regulatory Guide 221: Facilitating digital financial services disclosures (RG 221)

In the case of most marketplace lending business models involving retail investors we have granted licenses to, we have provided relief from some requirements of the law.

See our tailored guidance for marketplace lenders.

To help determine the most appropriate option for your business contact the Innovation Hub team.

Eligibility for fintech licensing exemption

The fintech licensing exemption applies to specified products or services. The eligibility criteria are explained in this infographic, along with some of the main conditions that apply.

More information on eligibility and the conditions that apply is available in Sections C and D of RG 257.

If your business is eligible to rely on the exemption, you must notify ASIC before you begins to test. Once the notification process is complete, the business is legally entitled to rely on the relief for 12 months, so long as it follows the conditions that apply.

Notifying ASIC

If you are eligible for the fintech licensing exemption, you must send ASIC written notice that you intend to test under the exemption to innovationhub@asic.gov.au. You must also provide ASIC with some information about your business.

Once the notification process is complete, the business is legally entitled to rely on the relief for 12 months, so long as it follows the conditions that apply.

Other laws

The regulatory sandbox framework deals with laws under ASIC's administration. This means the 'fintech licensing exemption' does not provide exemptions from other laws. For example, depending on your business model you will need to check whether you need to comply with the anti-money laundering legislation administered by AUSTRAC or the tax agent services legislation administered by the Tax Practitioners Board.

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News

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ASIC broadens fintech cooperation with Canadian regulators

12 December 2017

ASIC has announced a Cooperation Agreement with Canadian regulators on fintech cooperation. This agreement expands the existing framework for information sharing and also allows the referral of innovative fintech businesses to and from Canada.

Read the media release

ASIC’s regulatory sandbox proposal to remain unchanged

12 December 2017

ASIC has today released a review of its regulatory sandbox, introduced in December 2016.

Read the consultation paper

ASIC closure over the festive season

6 December 2017

ASIC offices will be closed from 5.00pm on Friday 22 December 2017 to 8.00am on Tuesday 2 January 2018. During this time requests for informal assistance will not be processed. You can also expect that early in January responding to requests for assistance will take a little longer than usual.

We encourage businesses to have any informal assistance requests or notifications related to the fintech licensing exemption to be sent to the Innovation Hub by Tuesday 12 December 2017 in order to be considered before the shutdown period.

Dubai and Australia seal agreement on fintech cooperation

23 November 2017

The Dubai Financial Services Authority and ASIC have signed a Cooperation Agreement which provides a framework for cooperation to support and understand financial innovation in each jurisdiction.

Read the release

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ASIC Commissioner John Price joins the podcast to discuss recent law reform around crowd-sourced funding and ASIC's role in administering the new legislation.

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Last updated: 14/06/2017 09:07