Tag: ASIC

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ASIC Continues to Monitor “Unfair Contract Terms”
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Australian Council of Financial Regulators consults on changes to Stored-Value Facilities Regulation
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ASIC acts on Initial Coin Offerings and crypto-asset funds
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ASIC updates its guidance on treatment of ICO’s
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New dispute resolution scheme requirements in Australia
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ASIC: Australian laws still apply to ICOs created and offered overseas
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6 ways for FinTechs to build trust: a regulator’s view
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ASIC Changes to Licence Processing Timelines and Fee Regime
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Australian Government releases proposal for new and improved sandbox
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ASIC provides responses to industry feedback on its current and future approaches to RegTech

ASIC Continues to Monitor “Unfair Contract Terms”

By Jim Bulling and Elise Hamblin

Fintech lenders must continue to take into consideration the unfair contract terms laws that have applied since 12 November 2016.  As set out in a recent ASIC Report 565 “Unfair Contract Terms and Small Business Loans”, unfair contract terms are currently areas of concern for ASIC.  To date, ASIC has found that eight lenders have failed to take sufficient steps to comply with their obligations under the unfair contract terms laws.

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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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ASIC acts on Initial Coin Offerings and crypto-asset funds

By Jim Bulling, Edwin Tan and Felix Charlesworth

In a statement issued today, the Australian Securities and Investments Commission (ASIC) revealed that it has prevented five Initial Coin Offerings (ICOs) from raising capital and will be taking further action in respect of one completed ICO.  The ICOs have been put on hold and some will be restructured to comply with relevant laws and regulations.  ASIC has also issued a final stop order in respect of a Product Disclosure Statement (PDS) issued by Investors Exchange Limited for units in the New Dawn Fund, which proposed to invest in a range of cryptocurrency assets.

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ASIC updates its guidance on treatment of ICO’s

By Jim Bulling and Felix Charlesworth

On 1 May 2018, the Australian Securities and Investments Commission (ASIC) released its revised Information Sheet 225 which provides an updated guidance on initial coin offerings (ICOs). The updated report expands its scope to include guidance dealing with other crypto-currency and digital token (Crypto-Asset) businesses.

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New dispute resolution scheme requirements in Australia

By Jim Bulling and Michelle Chasser

The Australian Government has authorised a new external dispute resolution (EDR) scheme for financial disputes, the Australian Financial Complaints Authority (AFCA). AFCA will replace the current EDR schemes, FOS, CIO and the Superannuation Complaints Tribunal (SCT), to create a ‘one stop shop’ with higher monetary limits for consumer and small business complaints against financial service providers including roboadvisers, marketplace lenders, payments providers and their representatives.

AFCA will commence accepting complaints from 1 November 2018 and any complaints not yet resolved by FOS or CIO will be transferred to AFCA. The SCT will continue to resolve its existing complaints but will not accept new complaints after 31 October 2018.

All Australian financial services licensees and credit licensees with retail clients have an obligation to become a member of AFCA by 21 September 2018. Existing members of FOS or CIO must also retain their existing memberships until further notice.

AFCA will soon seek public comments on the new AFCA Rules and interim funding model. Which will then need to be approved by the Australian Securities and Investments Commission.

ASIC: Australian laws still apply to ICOs created and offered overseas

By Jim Bulling and Edwin Tan

On 26 April 2018, John Price of the Australian Securities and Investments Commission (ASIC) highlighted in a speech that Australian corporate and consumer laws might still apply to ICOs created and offered from overseas, so long as they were offered and sold to Australian consumers.  Mr Price warned that there was an incorrect perception that Australian regulations did not apply to activities engaged from overseas.

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6 ways for FinTechs to build trust: a regulator’s view

By Michelle Chasser and Jim Bulling

In a recent speech on building trust, Australian Securities and Investments Commission Chair, James Shipton, identified 6 key characteristics that financial service providers, including FinTech companies, should have to ensure that the Australian financial system is efficient, resilient and fair.  Those characteristics are:

  1. Financial products that the FinTech company provides do what they say they will and don’t take advantage of consumer biases or lack of knowledge about the product.
  2. Consumers’ interests are prioritised and put before the FinTech company’s.
  3. The FinTech company acts with integrity and fairness, not just in compliance with the law but also taking into account community expectations and standards.
  4. Mistakes and misconduct are quickly identified, reported and rectified.
  5. Open engagement and cooperation with regulators not only about problems but also in relation to business challenges and risks.
  6. Being innovative and using technology to improve products and services to deliver better outcomes for consumers. Although by their very nature FinTech companies are innovative and use technology, an effort should be made to constantly improve outcomes for consumers and not adopt a ‘set and forget’ mindset.

How many of these characteristics do you demonstrate?

ASIC Changes to Licence Processing Timelines and Fee Regime

By Jim BullingMichelle Chasser and Edwin Tan

The Australian Securities & Investments Commission (ASIC) has announced changes to its service charter standard for processing licence applications effective immediately.  Under the updated standard, ASIC will decide 70% of licence applications within 150 days, and 90% of applications within 240 days.  The previous timeframes were 60 days and 120 days respectively.  ASIC has attributed this increase to an increasingly robust and risk-based approach to its assessment of licence applications.

In addition, a new fees-for-service regime will commence on 1 July 2018.  It will apply to document compliance reviews, licence applications or variations, applications for registration, requests for changes to market integrity rules or procedures and applications for relief.  There will be fee increases across the board for lodging ASIC forms, with the exception of certain registry activities which will now be exempt from payment of fees.

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Australian Government releases proposal for new and improved sandbox

By Michelle Chasser and Felix Charlesworth

On 24 October 2017, the Federal Government released draft legislation and regulations (Draft Bill) enhancing the existing regulatory sandbox for current and emerging FinTech products and services.

This comes almost one year after the Australian Securities and Investments Commission (ASIC) established a sandbox which granted particular exemptions to FinTech businesses from obtaining an Australian Financial Services Licence (AFSL) and/ or an Australian Credit Licence (ACL) if certain conditions were met.

As projected in the 2017/2017 Federal Budget, the enhanced sandbox will expand the types of permissible activities and testing timeframe beyond the existing sandbox parameters established by ASIC. The purpose of this enhanced sandbox is to further promote Australia’s FinTech capability by supporting start-ups and innovative businesses to develop, test and launch their financial and credit services.

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ASIC provides responses to industry feedback on its current and future approaches to RegTech

By Michelle Chasser and Felix Charlesworth

On 15 September 2017, ASIC released its responses to industry feedback on its consultation Report 523 (REP 523). As mentioned in an earlier blog, REP 523 sets out the structure and framework for ASIC’s ‘Innovation Hub’ as well as its current and future approach to regulatory technology (RegTech).

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