FinTech inquiry turns to structural issues


Denham Sadler
Senior Reporter

After delivering an interim report with recommendations for some “quick wins”, the parliamentary inquiry into FinTech will be turning its attention to longer-term structural issues for the sector.

The Senate Select Committee on Financial Technology and Regulatory Technology has released a new issues paper outlining its areas of focus for the rest of its inquiry over the next six months.

The committee will look at the potential for Consumer Data Right scheme to be applied to Big Tech, investigate further efforts to increase investment in R&D and improve access to capital for startups, as well as looing at how to convince companies to list on the local stock exchange rather than offshore.

Canberra Parliament
FinTech futures: Big decisions about the structure of finance and data Photo credit: Linda_K/Shutterstock.com

It comes after the committee handed an interim report to government in September with more than 30 recommendations for short term policies and actions to assist the FinTech and RegTech sectors, including on the CDR, digital identity and investor incentives.

The senators will now look at longer term structural changes to facilitate the growth of the sectors.

“It is clear that Australia needs to take a long-term view of tech as a driver of future jobs and economic growth to ensure that Australia remains globally competitive. In the context of COVID-19, rapidly increasing global digitisation and the decline of Hong Kong as a financial services hub, there are significant opportunities for Australia to seize,” the issues paper said.

The committee will look at ways to make Australian startups and scaleups more attractive to overseas capital and investment, and to encourage successful firms to list locally.

It will consider the potential for a scheme similar to Rule10b5-1 in the US, which allows insiders of publicly-traded corporations to set up a trading plan for buying or selling a predetermined number of securities at a predetermined time, and provide an affirmative defence to insider trading.

This scheme was utilised by the founders of Australian tech giant Atlassian, which is publicly listed in the US.

It will also investigate the potential for big tech companies like Facebook and Google to become accredited data recipients under the Consumer Data Right scheme.

“Consideration must be given to whether the regulatory framework governing the use of financial data can adequately maintain a level playing field if, for example, a large tech multinational such as Google was to start offering banking or other financial services in Australia,” the issues paper said.

It will also look at how the CDR can operate in combination with other reforms, and with similar schemes in other jurisdictions, such as California, the United Kingdom and Singapore.

The committee is seeking submissions on international data standards issues and the sharing of data with overseas jurisdictions, and how blockchain can help businesses and individuals deal with government.

In terms of digital identity, the inquiry will look into the possibility of a single digital channel in streamlining government services and how this could be used to support “novel applications”.

The committee also will look at an ongoing regulatory architecture for FinTech and regtech policy development once the inquiry comes to an end mid-next year in order to “ensure that the voices of market participants and consumers can continue to be heard by government”.

The committee is accepting submissions on the new issues paper until 11 December.

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