FinTech Australia is calling out to the Australian FinTech community to contribute their thoughts and experiences to ASIC’s Regulatory Sandbox Consultation Paper 260.
We’ve identified several areas that need deeper exploration with the FinTech Community and associated industries as part of our submission to CP 260, such as:
- Expanding the types of Financial Services that Startups may test in the Sandbox;
- Minimising disruption of business once the 6 month Sandbox time has been completed, by ensuring processes are available to allow startups to continue trading should the relevant licence application still be under process;
- Agreeing a set of Sandbox specific Service Level Agreements for ASIC, and a streamlined licensing process that fits with the timeframes associated with the Sandbox, complemented by a set of Sandbox specific complaint and dispute resolution processes;
- Provisions for Founders to extend their Sandbox time if they fail to meet licensing requirements in the 6 months due to reasons outside their control, such as delays in engagement with ASIC or other affiliated Legal or Government bodies;
- How Startups may establish protective mechanisms for themselves, their Investors and Customers during the Sandbox period and beyond;
- Implementing a progressive training and qualification program for Sandbox participants to meet the Responsible Manager requirements themselves rather than incurring ongoing supervision and thus increased cost from 3rd parties;
- A more flexible assessment of Organisational Competency and requisite experience to allow for new technical capabilities (such as in the case of Robo Advice) and class licenses that don’t yet exist (such as in the case of Crowd-Funding); and
- The development of guidelines and standard assessment criteria for Sandbox sponsors to remove sponsor profit incentives and expand Sandbox access to a much wider set of the Community nationally.
We’ve just started to explore this in our Regulatory Sandbox Sub-Committee. If you would like to join this Sub-Committee, or would just like to share an idea or your experience, please put this in an email to email@example.com with the Subject “ASIC Regulatory Sandbox”. (You need to be a FinTech Australia Member to join the Sub-Committee, but you don’t have to be a member to share your experience with us – we’d love to hear from you anyway!)
We’re looking for examples of what licensing hurdles you’ve had to go through, including the time and cost of gaining your license, and dealing with ASIC or RMs (Please let us know if you don’t want us sharing your details as part of the final submission). We also welcome constructive ideas along the areas above on how this process might be improved.
We welcome the move by ASIC to take a more active role in fostering FinTech innovation. Close collaboration between ASIC and the FinTech industry is critical to both sides developing a richer understanding of how new, innovative FinTech Business models can be tested efficiently and successfully whilst still fulfilling all required legal and regulatory obligations.
Our desire to maintain this delicate balance recognises that one of Australia’s key strengths is its robust, world-leading standards for consumer and investor protection. This is an advantage we need to cultivate if we truly have ambitions to foster a thriving FinTech ecosystem that is a connective hub between the tightly regulated US and European markets, and the emerging Asian ones.
The challenges outlined in ASIC’s CP 260 clearly demonstrate ASIC is listening to the concerns the Industry raised in FinTech Australia’s initial Reform Priorities Paper, and subsequently through our representation on ASIC’s DFAC and the FinTech Advisory Group. However we feel that there is still much to work through if this Sandbox is to be successfully leveraged and prove to be a more efficient process for the FinTech community.
If you are a FinTech Startup, VC, Investor, Hub, Incubator or Accelerator and would like to become a Member, please see our Member page to learn more about Member Benefits and how to apply.