Fintech Market Overview

This article does not constitute legal advice.

Lending in Australia

Fintech Software

The Australian credit licence (ACL) regime applies to fintechs that engage in consumer credit activities in Australia, and covers lending, leasing and intermediary activities. Any person engaging in consumer credit activities must hold an ACL, or otherwise be exempt from the requirement. Consumer credit activity is regulated by ASIC under the National Consumer Credit Protection Act 2009 (Cth) (the National Credit Act) and associated regulations. It is possible that a particular fintech offering may trigger both the AFSL and ACL requirements, for example fintechs that provide marketplace lending products, peer-to-peer lending or crowd-lending platforms may provide both financial services and engage in consumer credit activities and trigger both the AFSL and ACL requirements.1

The provision of credit information services in Australia is subject to the Privacy Act 1988 (Cth) (the Privacy Act), which provides that only credit reporting agencies (i.e., corporations carrying on a credit-reporting business) are authorised to collect personal information, collate it in credit information files and disclose it to credit providers. Credit reporting agencies must comply with obligations relating to the use, collection and disclosure of credit information.1

Providers of marketplace lending products (including peer-to-peer lending services) generally may need to hold an AFSL and comply with associated obligations.1

Where the products are consumer loans (e.g., loans to individuals for domestic, personal or household purposes), the provider will also need to hold an ACL and comply with associated obligations. Similarly, all loans (including business loans that are not regulated under the National Credit Act) are subject to consumer protection provisions in the ASIC Act, including prohibitions on misleading or deceptive behaviour. Peer-to-peer lenders are sometimes structured as managed investment schemes, which trigger ASIC registration requirements if offered to retail investors.1

There are generally no restrictions on secondary markets for trading loans; however, such activities may trigger licensing obligations for the provider of the market, market maker and market participants.1

Marketplace lenders will also typically have AML/CTF obligations.1

Payment services in Australia

Fintech in Australia

Fintech in other countries

  1. https://thelawreviews.co.uk/title/the-financial-technology-law-review/australia
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