Arguments continue over who’s allowed to play in fintech sandbox
The Labor Party says it supports a long-held government plan to make it easier for fintech companies to test their products without a financial services licence, though only if it can be guaranteed this won’t let companies develop tech with “predatory practices”.
In May 2017 the Turnbull government committed to relaxing rules for the so-called fintech regulatory sandbox, a program that is designed to make it easier for startups to grow by allowing them to test their products even if they do not yet have full financial services licences or credit licences.
More than two years later, the legislation is now before the House of Representatives, with the bill outlining a plan to amend the Corporations Act and the Consumer Credit Protection Act so companies can be granted a “conditional” exemption to licensing requirements, a move designed to open the scheme up to more businesses.
“We’re after innovation but not all innovation is good for consumers,” shadow assistant treasurer Stephen Jones said.
“If it’s about regulatory arbitrage to develop products that are going to be harmful for consumers, then we’re not in favour of it.”
Mr Jones is looking to move amendments that enshrine consumer protections into law requiring companies to prove they are creating products for the good of consumers.
He said tightening the laws would force companies to show they were working on a genuine innovation for the public good before they were exempt from licensing requirements.
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