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The Australian Securities and Investments Commission (ASIC) said on Thursday it is to allow eligible fintech companies to operate without being licensed locally for providing financial or credit services. A class waiver that was just issued will facilitate fintech businesses to test certain specified services in the country for up to 12 months with up to 100 retail clients.
Eligible fintechs must meet certain consumer protection conditions and notify the Australian regulator before they commence the business.
“ASIC’s ‘fintech licensing exemption’ is unique. No other major jurisdiction has implemented a class waiver which allows eligible businesses to notify the regulator and then commence testing without an individual application process,” ASIC commissioner John Price said, adding that the move will provide fintecks with more pathways to launch testing services before incurring many of the regulatory costs normally associated with running their business.
The licensing exemption will apply for certain services (for more information refer to the infographic below). However, businesses that are not eligible for exemption are still able to seek an individual exemption, regardless whether they have an existing license or not.
In addition, the ASIC has also released an update to the fintech regulatory framework, with which it facilitates ‘small-scale, heavily automated businesses’ to nominate a responsible manager. They will no longer be required day-to-day involvement in the business to provide regular sign-off on the licensee’s processes and systems and the quality of financial services provided.
“These are important updates to our licensing regime which take into account the circumstances of new innovative businesses and facilitate these businesses to meet the organizational competence requirements in alternative ways,” Price said.
The new rules were written based on the feedback received from market participants.
The ASIC is an independent body that oversees the corporate, markets and financial services markets in Australia. It regulates local companies, financial markets, financial services organizations and professionals who deal and advise in investments, superannuation, insurance, deposit taking and credit.