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Australian Gov on green line for fintechs

Monday 21 March 2016 | 02:52 PM CET

The Australian Government has commissioned a Productivity Commission inquiry into options for improving data availability and use, reviewing the uptake of the credit reporting framework and hence, examining options for standardising the collection, sharing and release of data.

The Government will also make anonymised and non‑sensitive public data openly available by default through The Digital Transformation Office will also develop a Trusted Digital Identity Framework. On 21 March 2016, ASIC released a new draft regulatory guide for robo-advice providers operating in Australia. The draft regulatory guide builds on existing ASIC guidance and provides a convenient starting point for robo‑advice providers seeking to understand their regulatory obligations.

The Government will consider the impact of allowing licensed brokers to sell policies from unauthorised foreign insurers where they offer consumers a better price and appropriate consumer protection. The Government has introduced a Bill into the Parliament that will facilitate crowd‑sourced equity funding for public companies in Australia. Following further consultation with the industry, including the FinTech Advisory Group, the Government will consider:

  • Increasing the assets and turnover threshold used to determine eligibility for equity crowdfunding to USD 25 million;
  • Reducing the cooling off period for investors into crowd‑sourced equity funded projects to 48 hours.

Following its implementation the Government will continue developing this new funding framework to ensure it is fit for purpose. The Government will consult on a potential framework for crowd‑sourced debt funding during 2016.

It notes that reports from the Senate Economics References Committee’s Inquiry into Digital Currency and the Productivity Commission’s Inquiry into Business Set Up, Transfer and Closure recommended that digital currency be treated as money for GST purposes to address the current ‘double taxation’ effect and that AML/CTF laws should apply to digital currencies.

The Government is committed to addressing the ‘double taxation’ of digital currencies and will work with the industry on legislative options to reform the law relating to GST as it is applied to digital currencies. The Government is considering the application of AML/CTF laws to digital currencies as part of the current statutory review of the AML/CTF Act due to be released in 2016. The Government welcomes the announcement by the ASX that it is exploring Blockchain technology for a new post‑trade solution for the Australian equity market.

The Government notes that the private sector has developed a foreign currency settlement service for Chinese RMB payments by the ASX’s Austraclear settlement facility. The Government believes that Australia’s financial system can support a ‘regulatory sandbox‘ for the FinTech industry. We have been working with ASIC on the development of a ‘regulatory sandbox’ for Australian FinTech. The Government is keen to develop a world leading ‘regulatory sandbox’ in Australia.

The Government notes that ASIC currently has, and uses, a number of sandbox‑like powers to reduce regulatory burdens on businesses, by granting waivers (or relief) from the law to facilitate business. ASIC established an Innovation Hub in April 2015 to help FinTech start‑ups navigate the regulatory laws it administers, including by providing informal guidance from senior advisers. ASIC is also working with its Digital Finance Advisory Committee on how to best utilise the existing regulatory arrangements and what further measures should be considered.

The Government will introduce a new mechanism by which Innovation Australia can issue binding advice in relation to the definition of ineligible activities and other limited powers to clarify eligibility. This would allow Innovation Australia to be able to clarify whether businesses activities are ineligible, removing the legal uncertainty associated with investments for ESVCLPs.

The Government will ensure that start‑ups involved in FinTech, including in insurance and finance related activities can be eligible investments for the purposes of the venture capital tax concession. This will allow access to the incentives for venture capital investment including those available under the National Innovation and Science Agenda, encouraging investment in FinTech.

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