Fledgling Australian financial technology companies will be able to test certain services without having to acquire a financial services or credit licence under a new ASIC sandbox.
The financial regulator yesterday claimed its decision to offer a "fintech licensing exemption" was "unique" to a major jurisdiction.
The exemption means fintechs only need to notify the regulator that they plan to start testing a service, and meet certain criteria, before they can start testing without having to go through the application process for a licence.
"Fintech and start-up businesses now have more pathways than ever to begin testing the viability of innovative financial services and credit services consumers, before incurring many of the regulatory costs normally associated with running their business," ASIC commissioner John Price said in a statement.
ASIC's move follows the NSW government's decision last month to similarly allow businesses in the state to test new technologies outside the restrictions of existing regulations.
The licensing exemption allows fintechs to test approved services for up to 12 months with 100 retail clients.
It broadens the scope from the initial six-month period and limited set of fintech firms ASIC had originally suggested.
Services eligible for the sandbox include providing advice, and dealing in or distributing products. Fintechs won't be able to test services that issue products or lend money.
it means robo advisers, digital currency wallets, and home contents insurance are among those eligible for the sandbox; superannuation and life insurance fintechs are not.
Firms will need to meet certain consumer protection conditions, and notify ASIC, before they begin testing. They must also have total customer exposure of no more than $5 million.
Businesses that aren't eligible for the sandbox can apply for individual exemptions.