Australian Government to end double taxation on digital currency
Treasurer Scott Morrison has introduced legislation into the Australian Parliament to remove the double taxation of digital currency.
Australian Securities and Investments Commission announces the commencement date for its crowd-sourced funding regime
By Jim Bulling, Daniel Knight and Felix Charlesworth
The Australian Securities and Investments Commission (ASIC) has announced that will begin accepting applications under its new crowd sourced funding (CSF) regime from 29 September 2017 onwards. From this date, applications can be submitted via the existing ASIC ‘eLicensing’ portal.
In preparation for the commencement of the CSF regime, ASIC has released an information sheet outlining:
- the expected application process and timeframe; and
- its approach of assessing applicants.
During the period between 29 September 2017 and 27 October 2017, ASIC will assess applications lodged on similar dates in ‘batches.’ Successful applications from each batch will progress broadly at the same time. Incomplete or inadequate applications lodged during this period may be refused or placed in later application batches. Applications which are lodged from 27 October 2017 onwards will be considered individually as soon as possible.
Federal Government extends AML/CTF regulation to capture digital currency exchanges
By Michelle Chasser and Felix Charlesworth
On Thursday 17 August 2017, the Minister for Justice tabled the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2017 (Bill).
The Bill will extend the Australian AML regime to cover digital currency exchange providers. Currently the AML regime applies only to ‘e-currencies’ which are backed by physical things such as bullion or precious metals while digital currencies backed by a cryptographic algorithm such as Bitcoin are excluded. The Bill repeals the definition of ‘e-currency’ and replaces it with the broader term ‘digital currency’ which is defined as a digital representation of value that:
- functions as a medium of exchange;
- is not issued by the authority of a government body;
- is interchangeable with money; and
- is generally available to members of the public.
APRA proposes reforms to the ADI Licencing Regime
By Jim Bulling and Felix Charlesworth
On 15 August 2017, the Australian Prudential Regulating Authority (APRA) published a discussion paper entitled ‘Licensing: A phased approach to authorising new entrants to the banking industry‘. The Discussion Paper proposes changes to APRA’s licensing framework with the introduction of a new restricted ADI licences regime.
This phased approach enables entrants who require time to build resources and capabilities, such as fintech start-ups, to conduct banking related business by reducing conventional barriers to entry such as the requirement to hold at least $50 million in start-up capital.
Crowdfunding Regulation Part 2: Guidance For CSF Intermediaries
By Jim Bulling, Michelle Chasser and Daniel Knight
The Australian Securities and Investments Commission (ASIC) has published Consultation Paper 289 Crowd-sourced funding: Guide for intermediaries. CP 289 includes a draft Regulatory Guide outlining ASIC’s proposed guidance for crowd-sourced funding platform operators (CSF intermediaries) who can apply to ASIC for a licence from 29 September 2017, including an explanation of the new Corporations Amendment (Crowd-sourced Funding) Regulations 2017.
Crowdfunding Regulation Part 1: Guidance For Public Companies
By Jim Bulling, Michelle Chasser and Daniel Knight
While the Australian government considers including private companies in the crowd-sourced funding (CSF) regime, the Australian Securities and Investments Commission (ASIC) has published Consultation Paper 288 Crowd-sourced funding: Guide for public companies. CP 288 includes a draft Regulatory Guide outlining ASIC’s proposed guidance for public companies which will raise funds through the CSF regime from 28 September 2017, including an explanation of the new Corporations Amendment (Crowd-sourced Funding) Regulations 2017.
Australia stepping closer to open banking
By Jim Bulling and Michelle Chasser
The Australian Treasury has announced an independent review into open banking in Australia. Open banking will require banks to share product and customer data with customers and third parties with the consent of the customer. The Government previously announced that the open banking regime would be introduced in 2018 to help customers seek more suitable products and increase competition.
Proposed APRA powers over non-bank lenders
By Michelle Chasser and Daniel Knight
The Australian Treasury has released for consultation, draft legislation which would give the Australian Prudential Regulatory Authority (APRA) prudential regulatory powers in relation to non-bank lenders including marketplace lenders. Non-bank lenders are corporations:
- whose business activities in Australia include the provision of finance such as:
- the lending of money;
- carrying out activities, whether directly or indirectly (such as through a trust), which result in the funding or originating of loans;
- letting or hire-purchase of goods; or
- acquiring debts dues to another person, bills of exchange or promissory notes; and
- with more than $50 million in loan principal amounts outstanding or debts due to it resulting from transactions entered into in the course of providing finance.
ASIC extends FinTech cooperation to Asian counterparts
By Jim Bulling and Michelle Chasser
On 13 June 2017, the Australian Securities and Investments Commission (ASIC) entered into a FinTech co-operation agreement with the Hong Kong Securities and Futures Commission (SFC). Soon after, on 23 and 27 June 2017, ASIC also entered into similar arrangements with the Japan Financial Services Agency (JFSA) and the Malaysia Securities Commission (MSC). These arrangements provides a framework for ASIC to work more closely with these regulators.
As a result of these agreements, ASIC, SFC, JFSA and MSC can refer FinTech businesses to each other for advice and support via ASIC’s Innovation Hub, SFC’s FinTech Contact Point, JFSA’s FinTech Support Desk and MSC’s alliance of FINtech community (aFINity). This means Australian FinTech businesses wishing to operate in Hong Kong, Japan or Malaysia will now have a simple pathway for engaging with those countries’ regulators, and vice versa. This can provide valuable assistance for FinTech businesses operating in one jurisdiction which want to better understand the rules in the other.
Pilot program to use blockchain to trade electricity
By Jim Bulling and Michelle Chasser
AGL is currently undertaking a trial to test whether blockchain technology can assist in creating a mechanism for users to trade surplus electricity generated from rooftop solar panels. This trial will use customer data generated from a previous AGL project involving the use in households of smart air conditioners, batteries and solar panels to simulate peer-to-peer trading, demonstrating what trades would have taken place and the value they would have generated.
It is possible that ‘smart contracts’ could automatically sell excess energy in real time to other users when excess energy from solar panels is generated. The use of blockchain in this way could help individual households to trade their own energy more efficiently, making renewable energy more affordable and better integrated with power grids. This is a relatively novel application of blockchain technology, which is the distributed ledger technology underpinning the digital currency Bitcoin.