The class waivers will be offered to eligible fintech businesses to test certain services for up to 12 months involving no more than 100 retail clients.
The firms must meet certain consumer protection conditions and notify Asic before they commence business.
Innovative viability
Asic commissioner John Price said: “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.
“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.”
The commission stressed, however, that the regulator is “equally committed to ensuring that innovate products and services are regulated appropriately and promote good consumer outcomes”.
Eligibility criteria
Firms must have no more than 100 retail clients, although they can have an unlimited number of wholesale clients. The test can last no longer than 12 months and involve a total customer exposure of no more than A$5m (£3m, $3.7m, €3.5m).
The fintech firms must have adequate compensation arrangements, such as professional indemnity insurance, and dispute resolution processes in place.
All Asic disclosure and conduct requirements must be met.
Service offering
Firms providing advice or dealing in, or distributing products are eligible for the licence waiver.
Fintech companies issuing its own products, lending money to consumers, or operating its own managed investment scheme are not eligible.
Product types
Only firms advising or distributing the following products will be considered for the waiver scheme:
- Deposit products with a maximum A$10,000 balance;
- Payment products, if they are issued by authorised deposit-taking institutions (ADI), with a maximum A$10,000 balance;
- General insurance, for personal property and home contents, with a maximum insurance level of A$50,000;
- Liquid investments, for listed Australian securities or simple schemes, with a maximum A$10,000 exposure; and
- Consumer credit contracts with certain features, and a loan size of between A$2,001 and A$25,000.
All other products are ineligible.
