You can see the rules and regulations in other jurisdictions.
Businesses in Australia that offer financial services must have an AFSL or be exempt from having one. The Corporations Act 2001 (Cth) outlines that financial service, overseen by ASIC, includes providing financial product advice, dealing in financial products (as either principal or agent), making a market for these products, running registered schemes, providing custodial/depository services and operating a crowdfunding service. Financial products are a means of investing, managing risk and making non-cash payments. They are unique tools that provide a variety of opportunities for people to pursue financial goals.1
These definitions are all-encompassing, encompassing common fintech services like deposit taking, wealth management and investment advice, digital wallets for payments, robo-advisory services, trading websites, crowdfunding portals and peer-to-peer marketplaces. An AFSL is necessary for giving financial product advice, which includes providing automated digital advice, so long as the intent is to guide customers in their decisions associated with financial products or services.1
Collective investments in Australia are known as managed investment schemes and may take the form of contract-based arrangements, unincorporated vehicles such as unit trusts or unincorporated limited partnerships, or bodies corporate like companies or incorporated limited partnerships.1
Depending on the framework, fintech companies operating a platform or scheme may be required to comply with Australian financial services, anti-money laundering and counter-terrorism financing (AML/CTF), as well as consumer protection regulations.1
The Australian government has established a crowd-sourced equity funding (CSF) framework to assist companies in securing capital through a licensed CSF platform, instead of having the obligation to list on a securities exchange. The regime not only makes it simpler to invest in small and start-up organisations, it also requires CSF intermediaries to get a licence and deliver certain information with their offers.1
There is no set of regulations that apply specifically to crowd lenders. The government has previously signalled its plans to consult on extending the existing CSF regime to cover debt funding; however, up until now, no such consultation has been launched.1
