ASIC & FINANCIAL INNOVATION Sydney Fintech Meet-up: Startups Tuesday 15 September 2015 John Price, Commissioner Mark Adams, Senior Executive Leader, Strategic Intelligence

Outline Part 1 – Setting the scene – John Price ASIC’s role Why regulation ASIC’s Innovation Hub Part 2 – Framework and issues – Mark Adams Starting a business The regulation of financial services Licensing Business models: Some issues Questions

ASIC’s role ASIC’s strategic objectives Relationship with other regulators

Why regulation Promote trust and confidence Promote fair treatment Promote financial stability

Our experience with Innovation We are seeing innovative business models Compared to incumbents, innovators have: Limited resources Limited history with ASIC Some fintechs may also test the boundaries

ASIC’s Innovation Hub The Hub will assist fintech start-ups to navigate our regulatory system Consistent with cutting red-tape ASIC will not compromise fundamental principles of regulation or licensing

ASIC’s Innovation Hub: 5 point approach Engagement Streamlined approach Enhanced communication Coordination Establish an advisory committee

What we have done so far A coordination team Webpage, guidance and address Digital Finance Advisory Committee (DFAC)

Preliminary assistance Marketplace Lending6 Robo Advice9 Payments6 Crowd Sourced Equity Funding5 Markets2 Other6 Total34

What we expect of you If seeking informal assistance: Have a well developed business model Explain why innovative Explain why benefits consumers/investors Identified regulatory issues

Outline – Part 2 Starting a business Regulation of financial services Licensing Business models – some issues Questions

Starting a business ASIC’s Small Business Hub o Business name registration o Company registration IP Australia – for trademarks

Financial Services Framework Financial Services Financial Products Financial Markets Consumer Credit Wholesale and/or retail services

Licensing – some issues Corporate authorised representative? Tailored form of licence Organisational competency

Licensing process Application Completeness check Additional information Decision

Robo Advice Potential consumer/investor benefits Regulatory issues: o Factual/General or personal advice o Scaled advice o Best interests duty

Marketplace lending Potential investor/borrower benefits Regulatory issues: Disclosure Creditworthiness Conflicts of Interest

Crowd Sourced Equity Fundraising Watch this space Status of regulatory reforms Likely elements of the reforms: Intermediary licensing and obligations Disclosure Caps

Payments Regulator cooperation ePayments Code Digital currency: regulatory status Blockchain technology: potential

Questions? Web: business/innovation-hub/