By Claire de Koeyer and Jim Bulling
Launching in March 2017 the RegTech Association is focused on “promoting the achievements, partnerships, collaborations, incubations and seeding of RegTech in Australia” through advocating, educating and supporting businesses in the sector. This is likely to involve facilitating engagement with industry stakeholders, advancing the use of technology and improving regulatory compliance outcomes.
By Rania Seoud, Claire de Koeyer and Daniel Knight
Crowd-sourced funding (CSF) is a developing alternative to traditional capital funding methods, allowing eligible early stage / start-up companies to raise funds from a larger pool of investors without the need for costly disclosure documents such as a prospectus.
CSF took significant steps forward with the Corporations Amendment (Crowd Sourced Funding) 2016 (Cth) (Act) that establishes a regulatory framework to facilitate CSF by small, unlisted public companies in Australia receiving assent and coming into operation. The CSF regime takes effect from 28 September 2017.
The Act allows eligible unlisted public companies with an annual turnover or gross assets of up to $25 million to advertise their business plans on a licensed online crowd funding platform to raise up to $5 million in 12 month rolling periods. Investors receive a share of the company in return for their investment.
By Rania Seoud, Andrew Gaffney and Daniel Knight
While the CSF regime removes some of the existing regulatory barriers to capital raising, there are a number of other key considerations for eligible companies intending to utilise the CSF regime. Below are just a few:
You may find our article on CSF intermediaries and ASIC’s CSF Guidance of use.
By Rania Seoud, Claire de Koeyer and Daniel Knight
Central to the new CSF regime is the inclusion of the AFS licence holder who acts as the intermediary (i.e. the gatekeeper). The intermediary must hold an AFSL with the correct authorisations in order to carry out this role. After 28 September 2017, ASIC will be able to accept AFS licence applications from entities wanting to provide CSF services.
Considering acting as a CSF intermediary? There are a number of things you may wish to consider, including:
By Cameron Abbott and Giles Whittaker
Traditional banking is a thing of the past, at least according to 203 senior retail banking executives surveyed by the Economist Intelligence Unit.
According to an Economist Intelligence Unit report for Temenos, the EU’s Second Payment Services Directive (PSD2), which will force banks to provide interfaces, APIs and data to third parties, is set to “tip the scales between banks and FinTechs for customer loyalty.” More than half of financial transactions will be made through FinTech companies rather than traditional retail banks by 2020, as the latest EU payments directive unleashes competition.
By Jim Bulling and Michelle Chasser
The Australian Securities and Investment Commission’s (ASIC) regulatory sandbox is up and running exempting qualifying businesses from holding an Australian financial services licence or Australian credit licence. There are a number of reasons why a business may not be eligible including:
So what are your options if you don’t meet all the eligibility criteria but don’t want to obtain your own licence?
By Jim Bulling and Michelle Chasser
In a recent speech, Australian Securities and Investments Commission Chairman Greg Medcraft released information on FinTech businesses which have taken advantage of the Innovation Hub established by ASIC in April earlier this year. Robo-advisers and marketplace lenders were the most prevalent types of businesses to approach the Innovation Hub. The 109 different businesses that the Innovation Hub engaged with this year included:
ASIC has also noted that those who received assistance from the Innovation Hub before applying for an Australian financial services licence were approved on average 95 days or 45% faster than those who hadn’t.
By Jim Bulling and Michelle Chasser
Australian Securities and Investments Commission (ASIC) Chairman, Greg Medcraft, has discussed cooperation between FinTech regulators at the recent International Institute of Finance Chief Risk Officer Forum in Singapore.
The Chairman noted “because the internet knows no boundaries” cooperation and collaboration between regulators is critical and developing responses to FinTech should not be done in isolation. The Chairman then highlighted the following steps required for cooperation.
1. Sharing information
Regulators in Australia, UK, Singapore, Canada, Kenya, South Korea, Switzerland and India have entered into various cooperation agreements with other regulators to share information about FinTech developments and emerging trends in their markets. Many of the cooperation agreements also allow FinTech businesses to access Innovation Hubs in other jurisdictions. The Chairman noted that ASIC was also informally in regular contact with regulators in the US and Europe.
2. Harmonisation
While ideally regulators would work towards harmonising their regulatory responses and approaches, it was acknowledged that this will be a challenge due to competition between countries to attract FinTech businesses. The Chairman raised the possibility of introducing a “fintech passport” which could ease entry into other jurisdictions for businesses. Another possible solution raised was to develop “equivalence processes” around regulation.
By Jim Bulling and Meera Sivanathan
Recently, the Australian Securities and Investments Commission (ASIC) presented its views on regulating digital advice at a Financial Services Council event. The discussion provided an overview of the regulator’s priorities in this space. Below are a few key takeaways relevant to those currently providing or seeking to provide digital advice:
The UK’s Department for International Trade (DIT) has announced its first FinTech mission to Australia taking place in Sydney and Melbourne from 20-23 March 2017.
DIT will select 8-12 UK FinTech companies to participate in the mission to Australia where they will participate in a programme of events and activities. Delegates will spend two days in Sydney, two days in Melbourne and an optional fifth day in Australia or New Zealand. The delegates will meet with and pitch to Australian financial institutions and venture capital firms, visit FinTech hubs, meet the regulator and government ministers, network with the Australian FinTech community, hear from UK FinTech companies that have found success in Australia and schedule meetings with potential customers and partners.
British Consul General in Sydney and Director-General UK Trade & Investment for Australia and New Zealand, Nick McInnes said: “We are very pleased to have the opportunity to bring a group of UK FinTech companies to Australia for the first time and introduce them to the local market. While FinTech in Australia is still in relatively early stages, the industry is growing rapidly and there are many opportunities for UK companies to set up, collaborate and succeed. The FinTech market in Australia is forecast to grow to over AU $4 billion by 2020, of which AU $1 billion will be completely new added value to the Australian economy, so now is an ideal time for UK companies to enter the market”.
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