Australia – Page 9 – FinTech and Blockchain Law Watch

FinTechs get ready to play in the sandbox

Apr 17 2016

In a recent speech at the Innovate Finance Global Summit, Christopher Woolard of the UK Financial Conduct Agency (FCA) provided details about the UK regulatory sandbox due to launch 9 May 2016. The sandbox will allow two FinTech cohorts a year to test their ideas without incurring the significant regulatory set up costs usually associated with going to market.

Participants in the sandbox will be given restricted authorisations to provide financial services to allow them to market test their ideas. The FCA will also develop a streamlined application process. Full authorisation will need to be sought to operate outside the sandbox.

Australia and Singapore discussing cooperation agreement

Apr 15 2016

By Jim Bulling and Michelle Chasser

The Australian Securities and Investments Commission (ASIC) and the Monetary Authority of Singapore (MAS) are in discussions to enter into a cooperation agreement to ensure Australian and Singaporean FinTech businesses will not be hindered by regulation when trying to enter the other country’s market.

The agreement is expected to be similar to that entered into between ASIC and the UK Financial Conduct Authority (FCA) in March. Under the ASIC-FCA agreement the two regulators will share information and implement a referral process for FinTech businesses interested in entering the UK or Australian market.

These agreements reflect the increasingly collaborative approach to FinTech regulation internationally.

Further information about the ASIC-FCA agreement can be found in our earlier post here.

Australian and UK financial regulators sign co-operation agreement

Mar 31 2016

By Jim Bulling and Michelle Chasser

The Australian Securities and Investments Commission (ASIC) and the UK Financial Conduct Authority (FCA) have signed a co-operation agreement to promote fintech innovation. The agreement will make expansion into Australian and UK markets easier for growing fintech businesses.

Both ASIC and FCA have already established innovation hubs to assist fintech businesses with their regulatory obligations and encourage development of the industry. A referral mechanism has been created under the new agreement which allows ASIC to refer Australian fintech businesses wanting to enter the UK market to FCA and vice versa. Referred businesses will then receive the same support from the other country’s innovation hub as local businesses.

ASIC and FCA also undertake to share information about emerging market trends and developments, regulatory issues pertaining to innovation in financial services and referred businesses. Shared information will be valuable for developing fintech regulations.

Providing digital advice to retail clients

Mar 30 2016

By Jim Bulling and Michelle Chasser

The Australian Securities and Investments Commission (ASIC) has released a draft guide on digital financial product advice for consultation. The draft guide does not introduce new regulatory concepts but clarifies some of the uncertainties that have arisen about how existing obligations will apply to robo-advisers.

Generally, robo-advice is provided using algorithms and without the involvement of a natural person. To ensure that consumers are provided with competent advice ASIC is proposing that at least one manager who is used to demonstrate the organisational competence of the licensee (Responsible Manager) must meet the training and competence standards applicable to natural persons who provide advice to retail clients.

Marketplace lending how-to from the Australian regulator

Mar 30 2016

By Daniel Knight

The Australian Securities and Investments Commission (ASIC) has released guidance for marketplace lenders navigating Australia’s existing dual licensing regimes for credit and financial products. While the guidance is helpful, it does not overcome the need for marketplace lenders, like other fintech innovators, to contort themselves into existing regulatory boxes.

ASIC’s Information Sheet 213 focuses on establishing a marketplace lending platform using Australia’s managed investment scheme regime, by far the most popular Australian structure where a trust is interposed between borrowers and lenders. This regime was designed for pooled collective investment vehicles, such as traditional managed funds, and is not well adapted to pure peer-to-peer lending. Individual regulatory relief is often needed to overcome these challenges – for example, to facilitate investor withdrawals – and the Information Sheet helpfully outlines the relief ASIC has previously given to industry players.

Australian Government gets more FinTech friendly

Mar 23 2016

By Jim Bulling and Michelle Chasser

The Australian Government has released its responses to the industry’s priorities for fintech development which it has called “Backing Australian FinTech”. As well as affirming existing commitments, such as introducing a crowd sourced equity funding (CSEF) framework and an incubator support programme, the paper includes a number of initiatives that the Government proposes to undertake. New developments include:

introduction of an entrepreneur visa in November 2016 for foreign entrepreneurs with innovative ideas and financial backing from a third party;
possibly increasing the asset and turnover eligibility threshold for CSEF to A$25 million and reducing cooling off periods for investors to 48 hours;
consultation on a potential framework for crowd sourced debt funding;
increasing the maximum fund size of Early Stage Venture Capital Limited Partnerships (ESVCLPs) to A$200 million and providing a 10% tax offset on capital invested;
introduction of a mechanism to allow Innovation Australia to issue binding advice in relation to the definition of ineligible activities for ESVCLPs;
Productivity Commission inquiry into options for improving access to comprehensive credit reporting (CCR) data;
a regulatory guide for robo-advice providers;
possibly allowing licensed insurance brokers to sell insurance policies from unauthorised foreign insurers where they offer consumers a better price and appropriate consumer protection;
possibly applying anti-money laundering laws to digital currencies;
a commitment to address the ‘double taxation’ of using digital currency to purchase goods already subject to the Goods and Services Tax (GST);
establishment of a new Cyber Security Growth Centre; and
a ‘regulatory sandbox’ in Australia to allow FinTech start-ups to test their products and business models.

Backing Australian FinTech indicates that 2016 will be a busy year for fintech regulation in Australia.

Read Backing Australian FinTech here.

Australian Government launches FinTech Advisory Committee

Feb 25 2016

By Jim Bulling and Michelle Chasser

The Australian Federal Government is getting behind the Australian FinTech market with the establishment of a FinTech Advisory Committee to help make Australia a FinTech leader in the Asia Pacific region.

Banks Partnering with Fintech Startups – Deutsche Bank, ANZ Bank

Feb 23 2016

By Jim Bulling

The banking industry is expressing overwhelming support for the development and use of new technologies to improve the banking experience and have expressed their desire to enter into partnership with Fintech businesses.

Some Feedback on Crowdfunding Reforms in Australia

Feb 23 2016

By Jim Bulling

International banking group Investec Australia has purchased a 20% stake in equity crowdfunding platform Equitise. Equitise, which is based in New Zealand, was founded in Australia in 2014, but has developed its business model in New Zealand as a result of slow development to crowdfunding regulation in Australia. The deal values the startup at close to AUD$10 million.

Tech-savvy Aussies Preference Digital Payments

Feb 04 2016

By Cameron Abbott and Meg Aitken

The number of Australian consumer using contactless payment mediums is on the rise. Statistics revealed in the World Payments Report 2015 ranks Australia behind only the United States, Finland and the Netherlands as the countries recording the highest number of non-cash payments per person.

NAB is the most recent big-four bank to respond to changing consumer behaviour in the market. This week, NAB launched a new payment solution that allows customers to ‘tap and pay’ on Android phones. NAB claims the new ‘NAB Pay’ facility is the first in Australia to utilise the Visa Token Service and enables customers to make contactless payments via the bank’s existing app without revealing their account details.

Read more about the new NAB Pay mobile payment service here.

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