Regulatory question mark hangs over FinTech
Financial technology (FinTech) startups could disrupt the regulatory order, a lawyer warns, with systemic tweaks needed to align regulation with the new, virtual environment.
The emergence of ‘robo' advice, peer to peer lending, crowd funding and Bitcoin presents exciting opportunities, but also challenges for regulators, particularly the Australian Securities and Investments Commission (ASIC), according to the Fold Legal's managing director Claire Wivell Plater.
ASIC is "very interested" in how it can facilitate the shift from a predominantly manual to a virtual framework, she said.
"ASIC is aware of the need for regulation to keep pace with innovation and early indications are that it will facilitate relief from regulation to FinTech businesses where necessary in order to help make that happen."
However, she stressed FinTech companies would still be held to rigorous standards and will often have to find a way to operate under the old model.
"They need to understand what services require a licence and understand the regulatory obligations that flow from that, whether it be disclosure or other mandated conduct requirements," she said.
"Then it is a matter of mapping the process and the end client's experience; analysing and understanding where the existing law fits, meeting it as much as possible and if it's not possible, consider approaching ASIC for relief."
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