ASIC expands regulatory sandbox
The Australian Securities and Investments Commission (ASIC) has upgraded it regulatory sandbox with the launch of an “enhanced regulatory sandbox” (ERS) which expands the number of firms who can make use of the arrangement and expands the timeframe to two years.
The new regime will come into effect from 1 September and will require companies to satisfy a net public benefit test and an innovation test.
At the same time there will be limitations on what financial services and products along with a $10,000 limit on the value of financial services they can provide to retail clients, alongside an aggregate $5 million total exposure limit for all financial services provided.
ASIC said that firms holding the ERS exemption would have to become members of the Australian Financial Complaints Authority (AFCA) and hold adequate professional indemnity insurance.
It said that companies accessing the regime could provide the following services to wholesale and retail clients:
- Financial product advice (personal and general);
- Dealing by issuing, varying or disposing of a non-cash payment facility (only);
- Dealing in (other than by issuing) eligible financial products; and
- A crowd-funding service.
The old sandbox regime allowed companies only 12 months to test their concepts, but provided scope to apply for a time extension.
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