Earlier this year, ASIC released Report 523 which discussed ASIC’s Innovation Hub, regulatory sandbox and approach to regtech (which we considered in an earlier update). In that report, ASIC sought submissions on its future approach to regtech. ASIC has now released Report 543, which discusses the submissions it received on Report 523 and its future approach to the Innovation Hub, regulatory sandbox and regtech. Key findings of Report 543 are:
- despite receiving some submissions that the fintech licensing exemption should be expanded, ASIC has committed to maintaining its current approach to the regulatory sandbox licensing exemption, until it has completed a review of its approach later in 2017;
- later this year Treasury will also conduct consultation on an enhanced regulatory sandbox arising from the Government’s commitment to a legislated, expanded regulatory sandbox;
- ASIC has committed to certain principles in relation to regtech including working towards outcomes in regtech that align strategic objectives and an approach to innovation, undertaking focussed initiatives that deliver outcomes in the near term and learning from industry input, international case studies and ASIC’s own experience with the regtech sector (including maintaining a flexible and adaptive approach to regtech in the future);
- due to submissions, ASIC will give further consideration to the structure of its regtech liaison group including in relation to the process by which organisations and individuals will be invited to join the group, various proposals concerning the formation of sub-groups or working groups under the umbrella regtech agenda and also creating a broader network regarding regtech;
- ASIC does not currently have plans to engage with other regulators around the world in relation to regtech liaison but ASIC is open to other domestic regulators participating in the regtech liaison group;
- while some submissions discussed the regtech liaison group having a broader role (ie, extending to developing industry standards), ASIC reaffirmed its commitment to the proposed purpose of the group, to facilitate networking, discussion of regtech developments and opportunities to collaborate on initiatives that promote positive applications of regulatory technology, but noted that it would be open-minded about the group’s early priorities; and
- ASIC has committed to greater transparency around the regtech trials that it undertakes extending to sharing additional information on future trials and outcomes and will encourage stakeholders to do likewise.
ASIC intends to establish the regtech liaison group for its first meeting before the end of 2017. The Report also noted that, based on submissions, ASIC will no longer host a regtech ‘hackathon’ on 18 September 2017 but will instead host a ‘showcase’ highlighting the regtech industry in Australia.