New Submission: Regulating Digital Asset Platforms
FinTech Australia has made a submission to Treasury in response to their consultation on a Proposals Paper for Regulating digital asset platforms.
The Proposals Paper sets out a new regulatory framework to regulate digital asset platforms within Australia’s existing financial services laws. This process follows a consultation back in February on 'token mapping' and focuses on regulating and licensing intermediaries.
It proposes expanding the financial services laws to these platforms by creating a new financial product called a 'digital asset facility' for holding digital assets or assets backing digital assets. Providing financial services in relation to a 'digital asset facility' (including 'platform providers') would require an AFS license, with general AFSL obligations applying. The Paper also considers other minimum standards and requirements for custody and reporting. This process will inform legislation, to be consulted on and introduced next year.
Our submission provided feedback and recommendations on:
The scope of activities captured and targeting of regulation
based on risk Applicable financial services licensing authorisations
Targeted compliance obligations for financialised functions
Improving the low value exemption to foster innovation
More workable financial (NTA) obligations which better reflect the risks of Digital Asset Facilities
Custody requirements which can be readily implemented
Grandfathering of payments licensing authorisations
The importance of early ASIC and AFCA guidance
Providing clarity on how design an distribution obligations and target market determinations will apply
More practical and tailored disclosure requirements to minimise compliance burdens and support retail client understanding
Restructuring the proposed transitional arrangements to provide a phased transition period and sufficient time to comply/for ASIC to deal with applications and variations
