Archive: September 24, 2018

1
Australian Council of Financial Regulators consults on changes to Stored-Value Facilities Regulation
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Regulating the UK “Wild West” of Crypto-Assets

Australian Council of Financial Regulators consults on changes to Stored-Value Facilities Regulation

By Jim Bulling, Felix Charlesworth and Edwin Tan

The Australian Council of Financial Regulators (CFR) today published an Issues Paper reviewing the regulatory regime of stored-value facilities including purchased payment facilities (PPFs).  The CFR comprises regulators such as APRA, ASIC and the RBA.

PPFs enable funds to be stored for the purpose of making future payments and include mobile wallet services and prepaid cards.  PPF providers must be licensed and supervised by APRA or otherwise rely on an exemption from complying with the legislative requirements.  The RBA has declared several class exemptions for PPFs, including the “limited-value facilities” exemption for PPFs with payment obligations of $10 million or under.

To date, PayPal is the only entity licensed and supervised by APRA as a PPF provider and only one entity has obtained individual exemption from the RBA.  These results support arguments that the current framework is too complicated, deters potential new entrants and imposes significant compliance costs.

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Regulating the UK “Wild West” of Crypto-Assets

By Jonathan Lawrence

On 19 September, the UK House of Commons Treasury Committee published a highly critical report of the state of UK crypto-asset regulation. Crypto-assets themselves (i.e. those designed primarily as a means of payment / exchange) are not within the scope of UK Financial Conduct Authority (FCA) regulation. This is because crypto-assets generally will not meet the criteria to be considered a specified investment under the Regulated Activities Order (RAO), nor would they typically qualify as ‘funds’ or ‘e-money’ in the Payments Services Directive and the E-Money Regulation 2009.

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