Marketplace lenders

To help complete your Innovation Hub application form, please check if these statements are relevant to your fintech business.

Am I a marketplace lender?

Marketplace lending generally describes an arrangement through which retail or wholesale investors invest money (seeking to earn a return), which is then lent to borrowers (consumers or businesses). These arrangements commonly involve the use of an online platform, such as a website, on which loan requests are made.

How is marketplace lending regulated?

The regulation of marketplace lending generally depends on how you structure your business and the types of investors and borrowers you offer your services to. Under Australia's financial services and credit laws, providers of marketplace lending products and related services will generally need:

1. to hold an Australian financial services (AFS) licence
2. an Australian credit licence if the loans made through the platform are consumer loans (e.g. loans to individuals for domestic, personal or household purposes).

In some circumstances you may also need to hold a financial market licence.

ASIC guidance for providers of marketplace lending products

Find out more about the regulation of marketplace lending in our tailored Information Sheet 213 Marketplace lending (peer-to-peer lending) products (INFO 213).

Fintech startups and scaleups looking to provide marketplace lending products are encouraged to use this information sheet to understand current regulatory requirements. It also describes ‘good-practice’ strategies that marketplace lenders may consider adopting.

Your general obligations if you need an AFS licence

If you need an AFS licence you need to demonstrate that you meet certain general requirements relating to your organisational capacity, education and training levels, risk-management systems and financial position. Please refer to Regulatory Guide 104 Regulatory Guide 104 Licensing: Meeting the general obligations, Regulatory Guide 105 Licensing: Organisational Competence, Regulatory Guide 166 Licensing: Financial Requirements and Regulatory Guide 259 Risk management systems of responsible entities for more information.

AFS licensees are also subject to ongoing conduct and disclosure obligations. For additional guidance see Information Sheet 213 Marketplace lending (peer-to-peer lending) products (INFO 213).

ASIC relief from the law

ASIC can grant relief from the law for individual businesses or products or for types of businesses or products. Our general approach to granting relief is set out in Regulatory Guide 51 Applications for relief.

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

Examples of relief ASIC has granted to marketplace lending providers

1. Relief from the withdrawal requirements (section 601GA(4) and Part 5C.6) to facilitate withdrawal of cash by members while the scheme is illiquid. This relief was granted in circumstances where each member had a separate portfolio that comprised a separate class of interest. For additional information see Report 420 Overview of decisions on relief applications (June to September 2014)
2. Relief from the requirement to seek registration of a separate managed investment scheme for each loan entered into through the lending platform
3. Relief from the requirement to treat the underlying assets of a provision fund operated in connection with the lending platform as scheme property of the scheme. For additional information, please see Report 435 Overview of decisions on relief applications (October 2014 to January 2015).