Treasury has sought to extend the licensing requirements currently available to financial services participants under the Regulatory Sandbox through the introduction of the Treasury Laws Amendment (2018 Measures No. 2) Bill 2019 (the Bill) to Parliament.
If passed, the Bill will amend both the Corporations Act 2001 and National Consumer Credit Protection Act 2009 to allow entities to be exempt from the requirement to hold an Australian Financial Services Licence (AFSL) or Australian Credit Licence (ACL) for the purposes of testing their products and services in the market where certain conditions are satisfied.
The Bill allows for an expanded Regulatory Sandbox regime to allow a wider scope of business to operate without an AFSL or ACL and test their products and services in the industry that what is currently available under the Regulatory Sandbox regime.
Interestingly, the Bill also allows ASIC to apply to a court to obtain an order requiring a particular entity to comply with the conditions of their exemption or in some circumstances cancel the exemption.
The Bill will not only allow entities which are new to the market to rely on an exemption under the new Regulatory Sandbox but will allow entities to expand current services and product offerings under an exemption.
The current Regulatory Sandbox is limited to eligible fintech companies only. The Regulatory Sandbox allows fintech entities to provide specific products and services to operate without an AFSL or ACL for up to 12 months.
For further information in relation to the current Regulatory Sandbox refer to:
If you would like to speak to us about the licensing requirements applicable to your business or your eligibility to operate through the Regulatory Sandbox, please contact us.