The government published draft laws today that would let financial technology companies operate without a full licence, a measure it said would encourage innovation without compromising existing levels of consumer protection.
The draft laws would let companies test "a broad scope of activities...without the need to meet all the existing licensing requirements of the Australian Securities and Investments Commission," Treasurer Scott Morrison said in a statement, referring to the corporate regulator.
Financial technology companies would be able to test products involving non-cash payments, crowdfunding, consumer credit and provide financial advice on pension funds, life insurance and domestic and international securities.
The draft laws, which Morrison has opened for consultation, would let companies "overcome the initial regulatory burden and costs of licensing that may otherwise hinder innovative offerings."
Companies would still need to observe "robust consumer protections and disclosure requirements" including responsible lending obligations and dispute resolution arrangements, Morrison added.
Britain's Financial Conduct Authority (FCA) has said it wants to launch a pared-back regulatory environment for financial technology companies to create a safe space to experiment on their business models.
Australia wants to develop Sydney as a technology hub similar to Silicon Valley and has offered tax breaks for early-stage investments as well as a visa scheme for entrepreneurs to attract talent.
(Reporting by Byron Kaye; Editing by Sam Holmes)