New rules to enhance Australia’s regulatory sandbox
Under proposed changes to Australian legislation, businesses will be able to test new and innovative financial technology products and services in an “enhanced regulatory sandbox”, the Australian Treasury announced last week.
Consultation on the draft legislation is now open, and will remain so until 3 November 2017. Plans for the legislative reforms were announced in the 2017-2018 Budget in May this year, and the changes are intended to extend the scope of activities beyond that of the regulatory sandbox launched by the Australian Securities & Investments Commission (ASIC) in December 2016.
In an explanatory document, the Treasury said: “The enhanced regulatory sandbox is intended to: further promote Australia’s FinTech capability by supporting start-ups and innovative businesses to develop, test and launch their innovative financial and credit services and products under certain conditions; and strike a better balance between encouraging competition and innovation that delivers choice for consumers and minimising risks to consumers or the integrity of the financial system.”
Regulatory sandboxes designed to support growth in financial technology have already been introduced in other jurisdictions, including the UK. A recent report released by the UK’s Financial Conduct Authority (FCA) showed that around 90% of firms that completed testing in the UK’s regulatory sandbox in the first cohort have progressed towards a wider market launch.