Tag: Australia

1
New dispute resolution scheme requirements in Australia
2
6 ways for FinTechs to build trust: a regulator’s view
3
IOT Group to set up blockchain centre in the Australian energy sphere
4
Increasing FinTech regulatory ties between Australia and the UK
5
Weather Bureau IT mining cryptocurrencies?
6
Digital currency exchange providers, do you need to register with AUSTRAC?
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Top 5 regulatory changes to watch for in 2018
8
Unresolved risk issues with the proposed open banking reforms
9
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

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.

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?

IOT Group to set up blockchain centre in the Australian energy sphere

By Cameron Abbott and Sarah Goegan

Technology company IOT Group announced this week that it has signed an Australian first energy and blockchain deal. In the agreement with Hunter Energy, IOT Blockchain will build a blockchain centre at the Redbank coal-fired power station in the Hunter Valley, two hours north of Sydney.

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Increasing FinTech regulatory ties between Australia and the UK

By Jim Bulling and Michelle Chasser

Australia and the UK have strengthened their joint support of the FinTech industry by entering into two new arrangements which build on the original FinTech cooperation agreement entered into by the Australian Securities and Investments Commission (ASIC) and the UK Financial Conduct Authority (FCA) in March 2016.

The Australian and UK Governments have entered into the UK-Australia FinTech Bridge which establishes a framework for individual arrangements involving governments, regulators, trade and investment, and business. A number of understandings were agreed to including:

  • investigating options for developing complementarity between the UK and Australian open banking regimes;
  • continuing to develop a set of international standards for blockchain applications; and
  • exploring opportunities to enable quicker processing of licences for firms already licensed in the other jurisdiction.

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Weather Bureau IT mining cryptocurrencies?

By Cameron Abbott and Allison Wallace

The Australian Federal Police are investigating two members of the Bureau of Meteorology’s IT team for allegedly running an operation in which they made use of the Bureau’s powerful computers to “mine” cryptocurrencies.

It was revealed late last week that the AFP raided the Bureau’s Melbourne CBD offices on February 28, and questioned the two employees. No charges have been laid, or arrests made. Read More

Digital currency exchange providers, do you need to register with AUSTRAC?

By Jim Bulling and Michelle Chasser

Australian anti-money laundering regulator AUSTRAC has released draft AML/CTF Rules for consultation following recently passed amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act which expand Australia’s AML/CTF regime to digital currency exchanges. The amendments will come into effect from the date of Proclamation which is expected to be 1 April 2018.

Under the amendments exchanging digital currency for money (whether Australian or not) or exchanging money (whether Australian or not) for digital currency, where the exchange is provided in the course of carrying on a digital currency exchange business will attract obligations under the AML/CTF regime. Notably, exchanging one digital currency for another will not be regulated.

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Top 5 regulatory changes to watch for in 2018

By Jim Bulling and Michelle Chasser

As one year has drawn to a close it is time to look forward to 2018 and our tips for the most important 5 regulatory changes for the FinTech industry in Australia.

  1. Increased access to bank data.

The Government has announced its intention to introduce an open banking regime in Australia under which customers will have the ability to give third parties such as FinTechs access to the customer’s banking data. Treasury is currently conducting a review into open banking models, with the report which was due at the end 2017 yet to be released.

Also planned to come in to effect by 1 July 2018 is mandatory comprehensive credit reporting which will give lenders access to deeper and richer sets of data on consumers to base their credit decisions on. Comprehensive credit reporting is currently voluntary.

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Unresolved risk issues with the proposed open banking reforms

By Jim Bulling, Michelle Chasser and Edwin Tan

The Australian Government has announced its intention to mandate that ADIs provide open access to customer and small business data with a commencement date still to be determined. Treasury has been tasked with undertaking a review of the proposals put forward by the Productivity Commission, and is due to report back to the Government by the end of 2017 as to its recommendations on implementation of the proposals and recommended timeframe.

While everyone is excited about the benefits that will flow from open banking, there have been concerns raised about the security and privacy risks raised by an open banking regime. In relation to privacy, the Productivity Commission has suggested that the solution is to amend the existing Privacy Act to include a new class of protected information known as “consumer data”. However there are significant gaps in the existing Privacy Act that would pose real problems in connection with the protection of customer data. For instance, the Australian Privacy Principles do not apply to small businesses with turnover of less than $3.0m and this may exempt many FinTech players from any privacy obligations.

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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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