The latest national budget delivered by the Treasurer, the Hon. Scott Morrison, yesterday brings good news for players in the FinTech and start-up community.
The Government has shown its commitment to reducing regulatory barriers facing new FinTechs and a desire to increase competition with a view to providing more choices and better services for consumers.
FinTech innovation is often restrained by the costs, both in time and money, to comply with regulatory regimes surrounding the particular industry. If the proposed initiatives are implemented, FinTechs will have a greater opportunity to develop and market their product, obtain funding and gain access to important data. An environment which fosters innovation will increase competition, ultimately providing more choice and higher quality services for consumers.
Most notably, the proposed Government initiatives include:
- Enhancing the Sandbox Exemption, which allows FinTechs to test their financial products and services without holding a financial services licence, by increasing the testing period from 12 months to 24 months (for further information refer to our previous article).
- Allowing Authorised Deposit taking Institutions (ADI’s) to use the term "bank" even where their capital is less than $50 million, allowing new ADI’s to benefit from the connotations and advantages associated with the term “bank” and relaxing the 15% ownership cap on new participants into the banking sector;
- Legislating to extend the crowd sourced equity funding framework to include proprietary companies (for further information refer to our previous article), to provide a greater range of funding options for start-ups in the early stages of their development.
- Removing the double taxation of cryptocurrencies. Currently, consumers face the prospect of paying GST when purchasing digital currencies and again when spending these currencies. The Government proposes that from 1 July 2017 purchases of digital currencies will no longer be subject to GST.
- Commissioning an independent review in late 2017 to consider the best approach to implementing an open banking regime which will give consumers (and third parties, where the consumer consents) more control and access to their banking data.
By implementing these changes, the Government hopes to position Australia at the centre of the global FinTech community.