The new rules would create a controlled environment, or sandbox, to allow start-ups to launch in the market with restricted authorisation before being granted a full licence, reuters.com reports.
Many fintech business models do not fit into the existing licence-based financial regulatory framework operated in many countries, making it difficult for start-ups to become established calls for regulators to provide more clarity on the rules for fintech services.
On the other hand, the UK Financial Conduct Authority (FCA) said in 2015 it would launch a regulatory sandbox for fintech firms to create a safe space in which authorised firms can experiment to validate their business models. Under that programme opened to applicants in May 2016, fintech firms which meet certain FCA criteria will be granted restricted authorisation by the FCA to test their ideas without fear of prosecution if they break the FCAs rules.
Australia wants to develop Sydney as a fintech hub and has announced tax breaks for early-stage investments as well as a visa scheme for entrepreneurs.
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