Fintech law overview
Regulation of the financial sector in Australia is very complex and a fintech starting out can easily get lost in the maze.
We’ve set out in this article a basic summary of the main laws that most fintechs deal with.
Dwyer Harris advises startups and established businesses in the finance sector on regulatory compliance and commercial transactions. Contact us if you need help to guide you through the maze.
Anti-Money Laundering and Counter-Terrorism Financing Act
Providers of some financial services have to identify customers and beneficial owners, report certain transactions, and have an AML/CTF compliance program.
Australian Securities and Investments Commission Act
Part 2 Division 2 has consumer protection provisions which are basically the same as the Australian Consumer Law but apply to financial services and credit.
Authorisation from APRA is required for banking business. APRA’s power to set prudential standards and supervise banks. Includes the Financial Claims Scheme for depositor protection.
Chapter 7 (Financial Services) deals with Australian Financial Services Licences (AFSLs) and requirements of licensees including disclosure (FSG, PDS, statements of advice), advertising, conduct, commissions and other remuneration. Credit is not covered (except margin loans). Chapter 5C deals with managed investment schemes.
A voluntary code for electronic payment transactions dealing with disclosures such as terms and conditions, other conduct obligations, when customers are liable for transactions, and complaints.
Industry Codes of Practice
These include the Banking Code of Practice, the Customer Owned Banking Code of Practice, and the General Insurance Code of Practice.
Authorisation from APRA is required for insurance business. APRA’s power to set prudential standards and supervise insurers. The Financial Claims Scheme for policyholder protection.
Matters relating to contracts of insurance including duty of utmost good faith, duty of disclosure, standard cover, general provisions of insurance contracts, claims, renewal and cancellation, and subrogation.
National Consumer Credit Protection Act
Covers consumer credit (not commercial) including residential investment lending, Australian credit licence (ACL) regime, and responsible lending requirements. Also includes the National Credit Code which controls the content of credit contracts and consumer leases, and regulates mortgages, guarantees, account statements, how you can charge interest and fees, default and collections, credit-related insurance, and advertising.
Payment Systems (Regulation) Act
Regulation of payments systems and purchased payment facilities such as stored value cards.
Personal Property Securities Act
How security interests in personal property are created. Priorities between security interests. When security interests are extinguished. Enforcing security interests. Registration of security interests on the Personal Property Securities Register.
General rules relating to collection, use and disclosure of personal information and special rules for credit-related information. (The Privacy (Credit Reporting) Code made under the Act has more detailed requirements in relation to credit information.)
Superannuation (Industry Supervision) Act
Licensing of responsible superannuation entities, MySuper, operating standards and prudential standards for super funds, governing rules of superannuation entities, in-house asset rules, duties of trustees and investment managers, auditors and actuaries, eligible rollover funds, monitoring and investigation of funds.