{"id":"F2020L00635","name":"National Consumer Credit Protection (FinTech Sandbox Australian Credit Licence Exemption) Regulations 2020","slug":"national-consumer-credit-protection-fintech-sandbox-australian-credit-licence-exemption-regulations-","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":100143,"registerId":"commonwealth-F2020L00635-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Part 1","sectionType":"part","heading":"Preliminary","content":"## Part 1—Preliminary","sortOrder":0},{"sectionNumber":"1","sectionType":"section","heading":"Name","content":"#### 1 Name\n\n  This instrument is the National Consumer Credit Protection (FinTech Sandbox Australian Credit Licence Exemption) Regulations 2020.","sortOrder":1},{"sectionNumber":"3","sectionType":"section","heading":"Authority","content":"#### 3 Authority\n\n  This instrument is made under the National Consumer Credit Protection Act 2009.","sortOrder":2},{"sectionNumber":"4","sectionType":"section","heading":"Simplified outline of this instrument","content":"#### 4 Simplified outline of this instrument\n\nA person may use an exemption from the licensing requirements in Part 2‑2 of the Act to test eligible credit activities.\n\nThe exemption will only become available if:\n\n(a) the person is an eligible person; and\n\n(b) the person lodges a valid notification and satisfies certain requirements (see Part 4).\n\nThe exemption will also not become available if:\n\n(a) ASIC is not satisfied that it will result, or be likely to result, in a net benefit to the public; or\n\n(b) ASIC is not satisfied that the credit activity is new, or is a new adaptation or improvement of another credit activity; or\n\n(c) ASIC reasonably believes that certain other circumstances exist.\n\nThere are 2 kinds of eligible credit activities. The exemption can become available at the same time, or at different times, for those 2 kinds. However, the exemption cannot become available a second time to test the same kind of credit activity.\n\nEach exemption lasts up to 24 months.\n\nEach exemption is subject to conditions that limit the exposure of the person’s consumers to the credit activities, including the total investment activity under the exemptions and any exemptions under the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\nEach exemption will cease automatically if the person fails to meet these limits (see Division 1 of Part 3), or if the person ceases to be an eligible person.\n\nEach exemption is also subject to other conditions (see Part 5). Failing to meet these conditions may result in ASIC cancelling the exemption or applying to the Court for an order that the person comply with the conditions.\n\nOnly one member of a group of related bodies corporate can use an exemption at any one time.","sortOrder":3},{"sectionNumber":"5","sectionType":"section","heading":"Definitions","content":"#### 5 Definitions\n\n  In this instrument:\n\n> Act means the National Consumer Credit Protection Act 2009.\n\n> Chapter 5 body corporate has the same meaning as in the Corporations Act 2001.\n\n> eligible credit activity means a credit activity that:\n\n    (a) is covered by item 1 or 2 of the table in subsection 6(1) of the Act; and\n    (b) has a related credit contract, or proposed credit contract, (the relevant contract);\n  if each of the following paragraphs applies to the relevant contract:\n    (c) the relevant contract is not a reverse mortgage or a small amount credit contract;\n    (d) none of the amount of credit that may be provided under the relevant contract is secured by a charge or lien over a consumer’s household property covered by subsection 27(1) of the Bankruptcy Regulations 2021 (worked out as if the consumer were a bankrupt);\n    (e) the credit limit of the relevant contract is more than $2,000 but does not exceed $25,000;\n    (f) the term of the relevant contract does not exceed 4 years.\n\n> eligible person, for an eligible credit activity, means a person who:\n\n    (a) is none of the following:\n    (i) a person authorised by a licence to engage in the eligible credit activity;\n    (ii) a credit representative of a licensee for engaging in the eligible credit activity;\n    (iii) a related body corporate of a body corporate covered by subparagraph (i) or (ii);\n    (iv) a natural person who is neither an Australian citizen, nor a permanent resident, within the meaning of the Australian Citizenship Act 2007; and\n    (b) if the person is a foreign company—is registered under Division 2 of Part 5B.2 of the Corporations Act 2001.\n\n> provider has the meaning given by section 6.\n\n> testing period has the meaning given by section 7.","sortOrder":4},{"sectionNumber":"Part 2","sectionType":"part","heading":"Exemption from credit activity licensing requirements for testing in the FinTech sandbox","content":"## Part 2—Exemption from credit activity licensing requirements for testing in the FinTech sandbox","sortOrder":5},{"sectionNumber":"6","sectionType":"section","heading":"Exemption for testing eligible credit activities in the FinTech sandbox","content":"#### 6 Exemption for testing eligible credit activities in the FinTech sandbox\n\n  For the purposes of paragraph 110(1)(a) of the Act, a person (the provider) is exempt from subsection 29(1) of the Act for engaging in an eligible credit activity during the period referred to in section 7 of this instrument if:\n    (a) the provider is an eligible person for the eligible credit activity; and\n    (b) the provider has lodged with ASIC in the approved form a notification that complies with subsection 13(1) of this instrument for the eligible credit activity; and\n    (c) the 30‑day period starting on the day the notification was so lodged has ended without ASIC giving the provider written notice of a decision under subsection 8(1) of this instrument relating to the notification.\n\n> Note 1: The exemption will also not be available if the provider has already been exempt for the same kind of credit activity (see paragraph (b) and paragraph 13(1)(c)).\n\n> Note 2: The provider will automatically cease to be exempt if the provider becomes licensed to engage in the eligible credit activity, or otherwise ceases to be an eligible person for the eligible credit activity (see the definition of eligible person in section 5).","sortOrder":6},{"sectionNumber":"7","sectionType":"section","heading":"Duration of the exemption","content":"#### 7 Duration of the exemption\n\n  The period (the testing period), of the provider’s exemption under section 6 for the eligible credit activity, is the 24 months starting on the day after the last day of the 30‑day period referred to in paragraph 6(c).\n\n> Note: The exemption may end earlier (see Part 3).","sortOrder":7},{"sectionNumber":"8","sectionType":"section","heading":"Grounds for ASIC deciding that the exemption is not available","content":"#### 8 Grounds for ASIC deciding that the exemption is not available\n\n  (1) ASIC may, after considering the notification lodged under paragraph 6(b) by the provider for the eligible credit activity, decide that:\n    (a) it is not satisfied that both paragraphs 6(a) and (b) are met for the provider and the credit activity; or\n    (b) it is not satisfied that exempting the credit activity will result, or be likely to result, in a benefit to the public that will outweigh the detriment to the public that will result, or be likely to result, from exempting that credit activity; or\n    (c) it is not satisfied that the credit activity:\n    (i) is new; or\n    (ii) is a new adaptation, or new improvement, of another credit activity; or\n    (d) it reasonably believes that a condition in section 14, 15, 16, 17 or 18 is not met for another eligible credit activity for which the provider has or has had an exemption under section 6; or\n    (e) if the assumption were made that the credit activity is covered by a licence—it reasonably believes that the requirement in section 37A of the Act (about the fit and proper person test) would not be satisfied in relation to the provider and the licence; or\n    (f) it reasonably believes that the provider has failed to act fairly, efficiently or honestly in engaging in credit activities or in providing financial services (within the meaning of the Corporations Act 2001); or\n    (g) it reasonably believes that a purpose for seeking the provider’s exemption under section 6 for the credit activity was to continue or recommence an exemption under section 6 that was earlier obtained by another person; or\n    (h) it reasonably believes that engaging in the eligible credit activity is likely to result in significant detriment to one or more consumers; or\n    (i) any exemption of the provider under the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020 is or has been cancelled under section 14 of those Regulations.\n  (2) Applications may be made to the Administrative Review Tribunal for review of decisions made by ASIC under subsection (1).\n\n> Note: This subsection is made for the purposes of paragraph 327(1)(i) of the Act.","sortOrder":8},{"sectionNumber":"Part 3","sectionType":"part","heading":"When exemption ceases before the end of the testing period","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the National Consumer Credit Protection (FinTech Sandbox Australian Credit Licence Exemption) Regulations 2020.\n\n#### 3 Authority\n\n  This instrument is made under the National Consumer Credit Protection Act 2009.\n\n#### 4 Simplified outline of this instrument\n\nA person may use an exemption from the licensing requirements in Part 2‑2 of the Act to test eligible credit activities.\n\nThe exemption will only become available if:\n\n(a) the person is an eligible person; and\n\n(b) the person lodges a valid notification and satisfies certain requirements (see Part 4).\n\nThe exemption will also not become available if:\n\n(a) ASIC is not satisfied that it will result, or be likely to result, in a net benefit to the public; or\n\n(b) ASIC is not satisfied that the credit activity is new, or is a new adaptation or improvement of another credit activity; or\n\n(c) ASIC reasonably believes that certain other circumstances exist.\n\nThere are 2 kinds of eligible credit activities. The exemption can become available at the same time, or at different times, for those 2 kinds. However, the exemption cannot become available a second time to test the same kind of credit activity.\n\nEach exemption lasts up to 24 months.\n\nEach exemption is subject to conditions that limit the exposure of the person’s consumers to the credit activities, including the total investment activity under the exemptions and any exemptions under the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\nEach exemption will cease automatically if the person fails to meet these limits (see Division 1 of Part 3), or if the person ceases to be an eligible person.\n\nEach exemption is also subject to other conditions (see Part 5). Failing to meet these conditions may result in ASIC cancelling the exemption or applying to the Court for an order that the person comply with the conditions.\n\nOnly one member of a group of related bodies corporate can use an exemption at any one time.\n\n#### 5 Definitions\n\n  In this instrument:\n\n> Act means the National Consumer Credit Protection Act 2009.\n\n> Chapter 5 body corporate has the same meaning as in the Corporations Act 2001.\n\n> eligible credit activity means a credit activity that:\n\n    (a) is covered by item 1 or 2 of the table in subsection 6(1) of the Act; and\n    (b) has a related credit contract, or proposed credit contract, (the relevant contract);\n  if each of the following paragraphs applies to the relevant contract:\n    (c) the relevant contract is not a reverse mortgage or a small amount credit contract;\n    (d) none of the amount of credit that may be provided under the relevant contract is secured by a charge or lien over a consumer’s household property covered by subsection 27(1) of the Bankruptcy Regulations 2021 (worked out as if the consumer were a bankrupt);\n    (e) the credit limit of the relevant contract is more than $2,000 but does not exceed $25,000;\n    (f) the term of the relevant contract does not exceed 4 years.\n\n> eligible person, for an eligible credit activity, means a person who:\n\n    (a) is none of the following:\n    (i) a person authorised by a licence to engage in the eligible credit activity;\n    (ii) a credit representative of a licensee for engaging in the eligible credit activity;\n    (iii) a related body corporate of a body corporate covered by subparagraph (i) or (ii);\n    (iv) a natural person who is neither an Australian citizen, nor a permanent resident, within the meaning of the Australian Citizenship Act 2007; and\n    (b) if the person is a foreign company—is registered under Division 2 of Part 5B.2 of the Corporations Act 2001.\n\n> provider has the meaning given by section 6.\n\n> testing period has the meaning given by section 7.\n\n## Part 2—Exemption from credit activity licensing requirements for testing in the FinTech sandbox\n\n#### 6 Exemption for testing eligible credit activities in the FinTech sandbox\n\n  For the purposes of paragraph 110(1)(a) of the Act, a person (the provider) is exempt from subsection 29(1) of the Act for engaging in an eligible credit activity during the period referred to in section 7 of this instrument if:\n    (a) the provider is an eligible person for the eligible credit activity; and\n    (b) the provider has lodged with ASIC in the approved form a notification that complies with subsection 13(1) of this instrument for the eligible credit activity; and\n    (c) the 30‑day period starting on the day the notification was so lodged has ended without ASIC giving the provider written notice of a decision under subsection 8(1) of this instrument relating to the notification.\n\n> Note 1: The exemption will also not be available if the provider has already been exempt for the same kind of credit activity (see paragraph (b) and paragraph 13(1)(c)).\n\n> Note 2: The provider will automatically cease to be exempt if the provider becomes licensed to engage in the eligible credit activity, or otherwise ceases to be an eligible person for the eligible credit activity (see the definition of eligible person in section 5).\n\n#### 7 Duration of the exemption\n\n  The period (the testing period), of the provider’s exemption under section 6 for the eligible credit activity, is the 24 months starting on the day after the last day of the 30‑day period referred to in paragraph 6(c).\n\n> Note: The exemption may end earlier (see Part 3).\n\n#### 8 Grounds for ASIC deciding that the exemption is not available\n\n  (1) ASIC may, after considering the notification lodged under paragraph 6(b) by the provider for the eligible credit activity, decide that:\n    (a) it is not satisfied that both paragraphs 6(a) and (b) are met for the provider and the credit activity; or\n    (b) it is not satisfied that exempting the credit activity will result, or be likely to result, in a benefit to the public that will outweigh the detriment to the public that will result, or be likely to result, from exempting that credit activity; or\n    (c) it is not satisfied that the credit activity:\n    (i) is new; or\n    (ii) is a new adaptation, or new improvement, of another credit activity; or\n    (d) it reasonably believes that a condition in section 14, 15, 16, 17 or 18 is not met for another eligible credit activity for which the provider has or has had an exemption under section 6; or\n    (e) if the assumption were made that the credit activity is covered by a licence—it reasonably believes that the requirement in section 37A of the Act (about the fit and proper person test) would not be satisfied in relation to the provider and the licence; or\n    (f) it reasonably believes that the provider has failed to act fairly, efficiently or honestly in engaging in credit activities or in providing financial services (within the meaning of the Corporations Act 2001); or\n    (g) it reasonably believes that a purpose for seeking the provider’s exemption under section 6 for the credit activity was to continue or recommence an exemption under section 6 that was earlier obtained by another person; or\n    (h) it reasonably believes that engaging in the eligible credit activity is likely to result in significant detriment to one or more consumers; or\n    (i) any exemption of the provider under the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020 is or has been cancelled under section 14 of those Regulations.\n  (2) Applications may be made to the Administrative Review Tribunal for review of decisions made by ASIC under subsection (1).\n\n> Note: This subsection is made for the purposes of paragraph 327(1)(i) of the Act.\n\n## Part 3—When exemption ceases before the end of the testing period\n\n### Division 1—When exemption ceases automatically\n\n#### 9 Not meeting certain limits will cause the exemption to cease automatically\n\n  Each of the provider’s exemptions under section 6 for eligible credit activities ceases to apply if (and when) the provider fails to meet:\n    (a) the condition in section 10 for any of those eligible credit activities; or\n    (b) a condition in a section of Division 1 of Part 3 of the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020 for an eligible financial service (within the meaning of those Regulations) for which the provider has an exemption under those Regulations.\n\n#### 10 Exposure limits for exempt credit activities—total limit for all activities etc.\n\n  (1) The provider meets the condition in this section for an eligible credit activity if the provider ensures that no more than a total of $5 million made up of the following:\n    (a) the value of credit contracts entered into in relation to eligible credit activities;\n    (b) gross written premiums for eligible general insurance products;\n    (c) gross written premiums for eligible life risk insurance products;\n    (d) contributions in eligible superannuation products;\n    (e) commitments to other kinds of financial product;\n  arises for consumers, retail clients and wholesale clients as the result of the matters referred to in subsections (2) and (3).\n  (2) For the purposes of paragraph (1)(a), the matters are the engaging in of eligible credit activities if:\n    (a) either the provider, or a related body corporate of the provider, has or has had an exemption under section 6 for each of the eligible credit activities; and\n    (b) each eligible credit activity was engaged in, by the person with that exemption for that credit activity, during the testing period of that person’s exemption for that credit activity.\n  (3) For the purposes of paragraphs (1)(b) to (e), the matters are the provision of eligible financial services if:\n    (a) either the provider, or a related body corporate of the provider, has or has had an exemption under section 6 of the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020 for each of the eligible financial services; and\n    (b) the provision of each of the eligible financial services, by the person with that exemption for that service, happened during the testing period (within the meaning of those Regulations) of that person’s exemption for that service.\n  (4) In this section:\n\n> eligible financial service has the same meaning as in the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\n> eligible general insurance product has the same meaning as in the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\n> eligible life risk insurance product has the same meaning as in the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\n> eligible superannuation product has the same meaning as in the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\n> financial product has the same meaning as in the Corporations Act 2001.\n\n> retail client has the same meaning as in the Corporations Act 2001.\n\n> wholesale client has the same meaning as in the Corporations Act 2001.\n\n### Division 2—Other ways exemption can cease\n\n#### 11 Exemption ceases because of ASIC decision\n\n  (1) ASIC may, by written notice given to the provider, cancel the provider’s exemption under section 6 for an eligible credit activity if:\n    (a) one or more of paragraphs 8(1)(c) to (i) now apply for the provider and the credit activity; or\n    (b) a condition in section 14, 15, 16, 17 or 18 is not met for the credit activity; or\n    (c) ASIC reasonably believes that engaging in the credit activity has resulted in significant detriment to one or more consumers.\n\n> Note 1: Before, or instead of, acting under this section for a failure to meet a condition in paragraph (b), ASIC could seek an order for the provider to comply with the condition (see subsection 110(3) of the Act).\n\n> Note 2: Before, or instead of, acting under this section because of paragraph (c), ASIC could consider making a make‑good order (see section 18).\n\n  (2) The cancellation takes effect on the day specified in the notice, which must not be a day before the notice is given to the provider.\n  (3) Applications may be made to the Administrative Review Tribunal for review of decisions made by ASIC under subsection (1).\n\n> Note: This subsection is made for the purposes of paragraph 327(1)(i) of the Act.\n\n#### 12 Exemption ceases if provider notifies ASIC\n\n  (1) The provider’s exemption under section 6 ceases to apply for an eligible credit activity if the provider lodges with ASIC a written notice to that effect.\n  (2) The cancellation takes effect on the day specified in the notice, which must not be a day before the notice is lodged with ASIC.\n\n## Part 4—Requirements for the exemption to exist\n\n#### 13 Lodging a valid notification for eligible credit activities\n\n  (1) The provider’s notification complies with this subsection for an eligible credit activity (the current credit activity) if:\n    (a) the notification includes the matters in subsection (2); and\n    (b) the notification states that the provider is proposing to use the exemption under section 6 for the current credit activity; and\n    (c) if the provider, or a related body corporate of the provider, has earlier obtained an exemption under section 6 for another eligible credit activity—that other credit activity is not covered by the same item of the table in subsection 6(1) of the Act as the current credit activity; and\n    (d) no related body corporate of the provider currently has:\n    (i) an exemption under section 6 for an eligible credit activity; or\n    (ii) an exemption under section 6 of the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020; and\n    (e) no related body corporate of the provider has lodged with ASIC:\n    (i) a notification under this instrument that includes the matters in subsection (2); or\n    (ii) a notification under the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020 that includes the matters in subsection 16(2) of that instrument;\n    during the 30‑day period ending on the day the notification referred to in paragraph (a) of this subsection is lodged with ASIC.\n\n> Note: A consequence of this subsection is that only one member of a group of related bodies corporate can ever use the exemption to test credit activities at any one time.\n\n  (2) The matters to include in the notification are as follows:\n    (a) the provider’s name, address and contact details;\n    (b) the address of the provider’s website (if any);\n    (c) if the provider is a natural person—the person’s date of birth;\n    (d) if the provider is a body corporate:\n    (i) the provider’s ABN, ACN and ARBN, (within the meaning of the Corporations Act 2001) if any; and\n    (ii) the name and contact details of a contact person who is a natural person who can be contacted in relation to the notice;\n    (e) if the provider is:\n    (i) a licensee; or\n    (ii) a credit representative of a licensee; or\n    (iii) a related body corporate of a person referred to in subparagraph (i) or (ii);\n    that licensee’s Australian credit licence number;\n    (f) a description of each eligible credit activity for which the provider is proposing to use the exemption under section 6;\n    (g) a justification of why exempting each eligible credit activity covered by paragraph (f) will result, or be likely to result, in a benefit to the public that will outweigh the detriment to the public that will result, or be likely to result, from exempting that credit activity;\n    (h) a justification of why each eligible credit activity covered by paragraph (f):\n    (i) is new; or\n    (ii) is a new adaptation, or new improvement, of another credit activity;\n    (i) the name of any person (including any related body corporate of the provider), other than an employee or director:\n    (i) of the provider; or\n    (ii) of any related body corporate of the provider;\n    whose role includes being responsible for making significant decisions about the ongoing engaging in of each eligible credit activity covered by paragraph (f), and a description of that role;\n    (j) if the assumption were made that each eligible credit activity covered by paragraph (f) is covered by a licence—information for the purposes of ASIC making a decision about whether the requirement in section 37A of the Act (about the fit and proper person test) would be satisfied in relation to the provider and the licence;\n    (k) a description of the procedures, memberships and arrangements by which the provider will meet the condition in section 16 (about dispute resolution and compensation) for each eligible credit activity covered by paragraph (f).\n\n> Note 1: The same notification may specify 2 eligible credit activities. If it does, each of them will be the subject of a separate exemption under section 6 (assuming the other eligibility criteria are satisfied).\n\n> Note 2: Paragraph (j) is relevant for decisions by ASIC under paragraph 8(1)(e).\n\n> Note 3: Since paragraph 6(b) requires the notification to be lodged with ASIC in the approved form, the notification must include any information, statements, explanations or other matters required by the form (see section 217 of the Act).\n\n## Part 5—Conditions for the exemption\n\n#### 14 Condition—notifying all consumers before engaging in an exempt credit activity\n\n  The condition in this section is met for an eligible credit activity if, before engaging in the credit activity with a consumer, the provider clearly and prominently discloses to the consumer that:\n    (a) the provider is not authorised by an Australian credit licence to engage in the credit activity; and\n    (b) the provider is not a credit representative of a licensee for engaging in the credit activity; and\n    (c) the credit activity is being provided under an exemption provided under the National Consumer Credit Protection (FinTech Sandbox Australian Credit Licence Exemption) Regulations 2020; and\n    (d) some of the normal protections associated with receiving credit activities or credit services from a licensee will not apply; and\n    (e) the provider will notify the consumer in writing if any of the events referred to in paragraph 15(a) (which the provider must list) happens.\n\n#### 15 Condition—notifying consumers while engaging in an exempt credit activity\n\n  The condition in this section is met for an eligible credit activity if, when engaging in the credit activity with one or more consumers, the provider:\n    (a) notifies each of those consumers in writing within 10 business days after the happening of any of the following events:\n    (i) the provider has ceased to engage in credit activities;\n    (ii) the provider has become a Chapter 5 body corporate, or under a foreign law has started to be in a similar position to a Chapter 5 body corporate;\n    (iii) the provider has become bankrupt, or has applied to take the benefit of any law for the relief of bankrupt or insolvent debtors;\n    (iv) the provider has compounded with the provider’s creditors, or has made an assignment of the provider’s remuneration for the benefit of the provider’s creditors;\n    (v) the provider has become authorised by an Australian credit licence to engage in the credit activity;\n    (vi) the provider has become a credit representative of a licensee for engaging in the credit activity;\n    (vii) the provider has ceased to rely on an exemption provided under the National Consumer Credit Protection (FinTech Sandbox Australian Credit Licence Exemption) Regulations 2020;\n    (viii) the credit activity has materially changed;\n    (ix) the credit activity is no longer being offered to new consumers; and\n    (b) notifies ASIC in writing within 10 business days after the happening of any of the events referred to in paragraph (a) (other than the events in subparagraphs (a)(v) and (vi)).\n\n#### 16 Condition—maintaining certain procedures, memberships and arrangements\n\n  The condition in this section is met for an eligible credit activity if the provider:\n    (a) establishes and maintains an internal dispute resolution procedure that:\n    (i) complies with the standards, and requirements, made or approved for the purposes of subparagraph 47(1)(h)(i) of the Act; and\n    (ii) covers disputes in relation to the engaging in of the credit activity; and\n    (b) is a member of the AFCA scheme for the purposes of dealing with complaints against the provider made by consumers in connection with the engaging in of the credit activity; and\n    (c) establishes and maintains arrangements that:\n    (i) include holding adequate professional indemnity insurance; or\n    (ii) are approved by ASIC in writing as adequate;\n    for compensating the provider’s consumers for loss or damage suffered because of breaches of the Act, or of the conditions in this instrument by the provider or its representatives; and\n    (d) continues the memberships referred to in paragraph (b), and the arrangements referred to in paragraph (c), for at least 12 months after the end of the credit activity’s testing period.\n\n#### 17 Condition—other obligations\n\n  The condition in this section is met for an eligible credit activity if the provider complies with:\n    (a) Chapter 3 of the Act (other than paragraphs 113(2)(d), 126(2)(d) and 127(2)(d), section 124A and Part 3‑2C), as if the provider were a licensee for the purposes of that Chapter; and\n    (b) section 124A and Part 3‑2C of the Act, to the extent that those provisions relate to short‑term credit contracts, as if the provider were a licensee for the purposes of those provisions; and\n    (c) Division 4A of Part 2, and Division 3 of Part 4, of the National Credit Code, as if the provider were a credit provider; and\n    (d) Subdivision BA of Division 2 of Part 2 of the ASIC Act, as if the relevant contract (see paragraph (b) of the definition of eligible credit activity in section 5 of this instrument) for the credit activity were a consumer contract (within the meaning of subsection 12BF(3) of that Act);\n  in relation to engaging in the credit activity during the testing period for the eligible class of credit activities that includes the credit activity.\n\n#### 18 Condition—make‑good orders\n\n  (1) The condition in this section is met for an eligible credit activity if, when an order under subsection (2) has been given to the provider for the credit activity, the provider:\n    (a) complies with the order within the 30‑day period starting on the day after the provider was given the order; and\n    (b) lodges with ASIC, during that 30‑day period, a notice in an approved form stating that the provider has complied with the order.\n  (2) ASIC may, by written notice given to the provider, order that the provider ensures that specified conduct:\n    (a) is engaged in in relation to an eligible credit activity; or\n    (b) is not engaged in in relation to an eligible credit activity;\n  if:\n    (c) the provider has an exemption under section 6 for the credit activity; and\n    (d) ASIC is satisfied that engaging in the credit activity has resulted, or is likely to result, in significant detriment to one or more consumers.\n  (3) Applications may be made to the Administrative Review Tribunal for review of decisions made by ASIC under subsection (2).\n\n> Note: This subsection is made for the purposes of paragraph 327(1)(i) of the Act.","sortOrder":9},{"sectionNumber":"Division 1","sectionType":"division","heading":"When exemption ceases automatically","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the National Consumer Credit Protection (FinTech Sandbox Australian Credit Licence Exemption) Regulations 2020.\n\n#### 3 Authority\n\n  This instrument is made under the National Consumer Credit Protection Act 2009.\n\n#### 4 Simplified outline of this instrument\n\nA person may use an exemption from the licensing requirements in Part 2‑2 of the Act to test eligible credit activities.\n\nThe exemption will only become available if:\n\n(a) the person is an eligible person; and\n\n(b) the person lodges a valid notification and satisfies certain requirements (see Part 4).\n\nThe exemption will also not become available if:\n\n(a) ASIC is not satisfied that it will result, or be likely to result, in a net benefit to the public; or\n\n(b) ASIC is not satisfied that the credit activity is new, or is a new adaptation or improvement of another credit activity; or\n\n(c) ASIC reasonably believes that certain other circumstances exist.\n\nThere are 2 kinds of eligible credit activities. The exemption can become available at the same time, or at different times, for those 2 kinds. However, the exemption cannot become available a second time to test the same kind of credit activity.\n\nEach exemption lasts up to 24 months.\n\nEach exemption is subject to conditions that limit the exposure of the person’s consumers to the credit activities, including the total investment activity under the exemptions and any exemptions under the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\nEach exemption will cease automatically if the person fails to meet these limits (see Division 1 of Part 3), or if the person ceases to be an eligible person.\n\nEach exemption is also subject to other conditions (see Part 5). Failing to meet these conditions may result in ASIC cancelling the exemption or applying to the Court for an order that the person comply with the conditions.\n\nOnly one member of a group of related bodies corporate can use an exemption at any one time.\n\n#### 5 Definitions\n\n  In this instrument:\n\n> Act means the National Consumer Credit Protection Act 2009.\n\n> Chapter 5 body corporate has the same meaning as in the Corporations Act 2001.\n\n> eligible credit activity means a credit activity that:\n\n    (a) is covered by item 1 or 2 of the table in subsection 6(1) of the Act; and\n    (b) has a related credit contract, or proposed credit contract, (the relevant contract);\n  if each of the following paragraphs applies to the relevant contract:\n    (c) the relevant contract is not a reverse mortgage or a small amount credit contract;\n    (d) none of the amount of credit that may be provided under the relevant contract is secured by a charge or lien over a consumer’s household property covered by subsection 27(1) of the Bankruptcy Regulations 2021 (worked out as if the consumer were a bankrupt);\n    (e) the credit limit of the relevant contract is more than $2,000 but does not exceed $25,000;\n    (f) the term of the relevant contract does not exceed 4 years.\n\n> eligible person, for an eligible credit activity, means a person who:\n\n    (a) is none of the following:\n    (i) a person authorised by a licence to engage in the eligible credit activity;\n    (ii) a credit representative of a licensee for engaging in the eligible credit activity;\n    (iii) a related body corporate of a body corporate covered by subparagraph (i) or (ii);\n    (iv) a natural person who is neither an Australian citizen, nor a permanent resident, within the meaning of the Australian Citizenship Act 2007; and\n    (b) if the person is a foreign company—is registered under Division 2 of Part 5B.2 of the Corporations Act 2001.\n\n> provider has the meaning given by section 6.\n\n> testing period has the meaning given by section 7.\n\n## Part 2—Exemption from credit activity licensing requirements for testing in the FinTech sandbox\n\n#### 6 Exemption for testing eligible credit activities in the FinTech sandbox\n\n  For the purposes of paragraph 110(1)(a) of the Act, a person (the provider) is exempt from subsection 29(1) of the Act for engaging in an eligible credit activity during the period referred to in section 7 of this instrument if:\n    (a) the provider is an eligible person for the eligible credit activity; and\n    (b) the provider has lodged with ASIC in the approved form a notification that complies with subsection 13(1) of this instrument for the eligible credit activity; and\n    (c) the 30‑day period starting on the day the notification was so lodged has ended without ASIC giving the provider written notice of a decision under subsection 8(1) of this instrument relating to the notification.\n\n> Note 1: The exemption will also not be available if the provider has already been exempt for the same kind of credit activity (see paragraph (b) and paragraph 13(1)(c)).\n\n> Note 2: The provider will automatically cease to be exempt if the provider becomes licensed to engage in the eligible credit activity, or otherwise ceases to be an eligible person for the eligible credit activity (see the definition of eligible person in section 5).\n\n#### 7 Duration of the exemption\n\n  The period (the testing period), of the provider’s exemption under section 6 for the eligible credit activity, is the 24 months starting on the day after the last day of the 30‑day period referred to in paragraph 6(c).\n\n> Note: The exemption may end earlier (see Part 3).\n\n#### 8 Grounds for ASIC deciding that the exemption is not available\n\n  (1) ASIC may, after considering the notification lodged under paragraph 6(b) by the provider for the eligible credit activity, decide that:\n    (a) it is not satisfied that both paragraphs 6(a) and (b) are met for the provider and the credit activity; or\n    (b) it is not satisfied that exempting the credit activity will result, or be likely to result, in a benefit to the public that will outweigh the detriment to the public that will result, or be likely to result, from exempting that credit activity; or\n    (c) it is not satisfied that the credit activity:\n    (i) is new; or\n    (ii) is a new adaptation, or new improvement, of another credit activity; or\n    (d) it reasonably believes that a condition in section 14, 15, 16, 17 or 18 is not met for another eligible credit activity for which the provider has or has had an exemption under section 6; or\n    (e) if the assumption were made that the credit activity is covered by a licence—it reasonably believes that the requirement in section 37A of the Act (about the fit and proper person test) would not be satisfied in relation to the provider and the licence; or\n    (f) it reasonably believes that the provider has failed to act fairly, efficiently or honestly in engaging in credit activities or in providing financial services (within the meaning of the Corporations Act 2001); or\n    (g) it reasonably believes that a purpose for seeking the provider’s exemption under section 6 for the credit activity was to continue or recommence an exemption under section 6 that was earlier obtained by another person; or\n    (h) it reasonably believes that engaging in the eligible credit activity is likely to result in significant detriment to one or more consumers; or\n    (i) any exemption of the provider under the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020 is or has been cancelled under section 14 of those Regulations.\n  (2) Applications may be made to the Administrative Review Tribunal for review of decisions made by ASIC under subsection (1).\n\n> Note: This subsection is made for the purposes of paragraph 327(1)(i) of the Act.\n\n## Part 3—When exemption ceases before the end of the testing period\n\n### Division 1—When exemption ceases automatically\n\n#### 9 Not meeting certain limits will cause the exemption to cease automatically\n\n  Each of the provider’s exemptions under section 6 for eligible credit activities ceases to apply if (and when) the provider fails to meet:\n    (a) the condition in section 10 for any of those eligible credit activities; or\n    (b) a condition in a section of Division 1 of Part 3 of the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020 for an eligible financial service (within the meaning of those Regulations) for which the provider has an exemption under those Regulations.\n\n#### 10 Exposure limits for exempt credit activities—total limit for all activities etc.\n\n  (1) The provider meets the condition in this section for an eligible credit activity if the provider ensures that no more than a total of $5 million made up of the following:\n    (a) the value of credit contracts entered into in relation to eligible credit activities;\n    (b) gross written premiums for eligible general insurance products;\n    (c) gross written premiums for eligible life risk insurance products;\n    (d) contributions in eligible superannuation products;\n    (e) commitments to other kinds of financial product;\n  arises for consumers, retail clients and wholesale clients as the result of the matters referred to in subsections (2) and (3).\n  (2) For the purposes of paragraph (1)(a), the matters are the engaging in of eligible credit activities if:\n    (a) either the provider, or a related body corporate of the provider, has or has had an exemption under section 6 for each of the eligible credit activities; and\n    (b) each eligible credit activity was engaged in, by the person with that exemption for that credit activity, during the testing period of that person’s exemption for that credit activity.\n  (3) For the purposes of paragraphs (1)(b) to (e), the matters are the provision of eligible financial services if:\n    (a) either the provider, or a related body corporate of the provider, has or has had an exemption under section 6 of the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020 for each of the eligible financial services; and\n    (b) the provision of each of the eligible financial services, by the person with that exemption for that service, happened during the testing period (within the meaning of those Regulations) of that person’s exemption for that service.\n  (4) In this section:\n\n> eligible financial service has the same meaning as in the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\n> eligible general insurance product has the same meaning as in the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\n> eligible life risk insurance product has the same meaning as in the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\n> eligible superannuation product has the same meaning as in the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\n> financial product has the same meaning as in the Corporations Act 2001.\n\n> retail client has the same meaning as in the Corporations Act 2001.\n\n> wholesale client has the same meaning as in the Corporations Act 2001.\n\n### Division 2—Other ways exemption can cease\n\n#### 11 Exemption ceases because of ASIC decision\n\n  (1) ASIC may, by written notice given to the provider, cancel the provider’s exemption under section 6 for an eligible credit activity if:\n    (a) one or more of paragraphs 8(1)(c) to (i) now apply for the provider and the credit activity; or\n    (b) a condition in section 14, 15, 16, 17 or 18 is not met for the credit activity; or\n    (c) ASIC reasonably believes that engaging in the credit activity has resulted in significant detriment to one or more consumers.\n\n> Note 1: Before, or instead of, acting under this section for a failure to meet a condition in paragraph (b), ASIC could seek an order for the provider to comply with the condition (see subsection 110(3) of the Act).\n\n> Note 2: Before, or instead of, acting under this section because of paragraph (c), ASIC could consider making a make‑good order (see section 18).\n\n  (2) The cancellation takes effect on the day specified in the notice, which must not be a day before the notice is given to the provider.\n  (3) Applications may be made to the Administrative Review Tribunal for review of decisions made by ASIC under subsection (1).\n\n> Note: This subsection is made for the purposes of paragraph 327(1)(i) of the Act.\n\n#### 12 Exemption ceases if provider notifies ASIC\n\n  (1) The provider’s exemption under section 6 ceases to apply for an eligible credit activity if the provider lodges with ASIC a written notice to that effect.\n  (2) The cancellation takes effect on the day specified in the notice, which must not be a day before the notice is lodged with ASIC.\n\n## Part 4—Requirements for the exemption to exist\n\n#### 13 Lodging a valid notification for eligible credit activities\n\n  (1) The provider’s notification complies with this subsection for an eligible credit activity (the current credit activity) if:\n    (a) the notification includes the matters in subsection (2); and\n    (b) the notification states that the provider is proposing to use the exemption under section 6 for the current credit activity; and\n    (c) if the provider, or a related body corporate of the provider, has earlier obtained an exemption under section 6 for another eligible credit activity—that other credit activity is not covered by the same item of the table in subsection 6(1) of the Act as the current credit activity; and\n    (d) no related body corporate of the provider currently has:\n    (i) an exemption under section 6 for an eligible credit activity; or\n    (ii) an exemption under section 6 of the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020; and\n    (e) no related body corporate of the provider has lodged with ASIC:\n    (i) a notification under this instrument that includes the matters in subsection (2); or\n    (ii) a notification under the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020 that includes the matters in subsection 16(2) of that instrument;\n    during the 30‑day period ending on the day the notification referred to in paragraph (a) of this subsection is lodged with ASIC.\n\n> Note: A consequence of this subsection is that only one member of a group of related bodies corporate can ever use the exemption to test credit activities at any one time.\n\n  (2) The matters to include in the notification are as follows:\n    (a) the provider’s name, address and contact details;\n    (b) the address of the provider’s website (if any);\n    (c) if the provider is a natural person—the person’s date of birth;\n    (d) if the provider is a body corporate:\n    (i) the provider’s ABN, ACN and ARBN, (within the meaning of the Corporations Act 2001) if any; and\n    (ii) the name and contact details of a contact person who is a natural person who can be contacted in relation to the notice;\n    (e) if the provider is:\n    (i) a licensee; or\n    (ii) a credit representative of a licensee; or\n    (iii) a related body corporate of a person referred to in subparagraph (i) or (ii);\n    that licensee’s Australian credit licence number;\n    (f) a description of each eligible credit activity for which the provider is proposing to use the exemption under section 6;\n    (g) a justification of why exempting each eligible credit activity covered by paragraph (f) will result, or be likely to result, in a benefit to the public that will outweigh the detriment to the public that will result, or be likely to result, from exempting that credit activity;\n    (h) a justification of why each eligible credit activity covered by paragraph (f):\n    (i) is new; or\n    (ii) is a new adaptation, or new improvement, of another credit activity;\n    (i) the name of any person (including any related body corporate of the provider), other than an employee or director:\n    (i) of the provider; or\n    (ii) of any related body corporate of the provider;\n    whose role includes being responsible for making significant decisions about the ongoing engaging in of each eligible credit activity covered by paragraph (f), and a description of that role;\n    (j) if the assumption were made that each eligible credit activity covered by paragraph (f) is covered by a licence—information for the purposes of ASIC making a decision about whether the requirement in section 37A of the Act (about the fit and proper person test) would be satisfied in relation to the provider and the licence;\n    (k) a description of the procedures, memberships and arrangements by which the provider will meet the condition in section 16 (about dispute resolution and compensation) for each eligible credit activity covered by paragraph (f).\n\n> Note 1: The same notification may specify 2 eligible credit activities. If it does, each of them will be the subject of a separate exemption under section 6 (assuming the other eligibility criteria are satisfied).\n\n> Note 2: Paragraph (j) is relevant for decisions by ASIC under paragraph 8(1)(e).\n\n> Note 3: Since paragraph 6(b) requires the notification to be lodged with ASIC in the approved form, the notification must include any information, statements, explanations or other matters required by the form (see section 217 of the Act).\n\n## Part 5—Conditions for the exemption\n\n#### 14 Condition—notifying all consumers before engaging in an exempt credit activity\n\n  The condition in this section is met for an eligible credit activity if, before engaging in the credit activity with a consumer, the provider clearly and prominently discloses to the consumer that:\n    (a) the provider is not authorised by an Australian credit licence to engage in the credit activity; and\n    (b) the provider is not a credit representative of a licensee for engaging in the credit activity; and\n    (c) the credit activity is being provided under an exemption provided under the National Consumer Credit Protection (FinTech Sandbox Australian Credit Licence Exemption) Regulations 2020; and\n    (d) some of the normal protections associated with receiving credit activities or credit services from a licensee will not apply; and\n    (e) the provider will notify the consumer in writing if any of the events referred to in paragraph 15(a) (which the provider must list) happens.\n\n#### 15 Condition—notifying consumers while engaging in an exempt credit activity\n\n  The condition in this section is met for an eligible credit activity if, when engaging in the credit activity with one or more consumers, the provider:\n    (a) notifies each of those consumers in writing within 10 business days after the happening of any of the following events:\n    (i) the provider has ceased to engage in credit activities;\n    (ii) the provider has become a Chapter 5 body corporate, or under a foreign law has started to be in a similar position to a Chapter 5 body corporate;\n    (iii) the provider has become bankrupt, or has applied to take the benefit of any law for the relief of bankrupt or insolvent debtors;\n    (iv) the provider has compounded with the provider’s creditors, or has made an assignment of the provider’s remuneration for the benefit of the provider’s creditors;\n    (v) the provider has become authorised by an Australian credit licence to engage in the credit activity;\n    (vi) the provider has become a credit representative of a licensee for engaging in the credit activity;\n    (vii) the provider has ceased to rely on an exemption provided under the National Consumer Credit Protection (FinTech Sandbox Australian Credit Licence Exemption) Regulations 2020;\n    (viii) the credit activity has materially changed;\n    (ix) the credit activity is no longer being offered to new consumers; and\n    (b) notifies ASIC in writing within 10 business days after the happening of any of the events referred to in paragraph (a) (other than the events in subparagraphs (a)(v) and (vi)).\n\n#### 16 Condition—maintaining certain procedures, memberships and arrangements\n\n  The condition in this section is met for an eligible credit activity if the provider:\n    (a) establishes and maintains an internal dispute resolution procedure that:\n    (i) complies with the standards, and requirements, made or approved for the purposes of subparagraph 47(1)(h)(i) of the Act; and\n    (ii) covers disputes in relation to the engaging in of the credit activity; and\n    (b) is a member of the AFCA scheme for the purposes of dealing with complaints against the provider made by consumers in connection with the engaging in of the credit activity; and\n    (c) establishes and maintains arrangements that:\n    (i) include holding adequate professional indemnity insurance; or\n    (ii) are approved by ASIC in writing as adequate;\n    for compensating the provider’s consumers for loss or damage suffered because of breaches of the Act, or of the conditions in this instrument by the provider or its representatives; and\n    (d) continues the memberships referred to in paragraph (b), and the arrangements referred to in paragraph (c), for at least 12 months after the end of the credit activity’s testing period.\n\n#### 17 Condition—other obligations\n\n  The condition in this section is met for an eligible credit activity if the provider complies with:\n    (a) Chapter 3 of the Act (other than paragraphs 113(2)(d), 126(2)(d) and 127(2)(d), section 124A and Part 3‑2C), as if the provider were a licensee for the purposes of that Chapter; and\n    (b) section 124A and Part 3‑2C of the Act, to the extent that those provisions relate to short‑term credit contracts, as if the provider were a licensee for the purposes of those provisions; and\n    (c) Division 4A of Part 2, and Division 3 of Part 4, of the National Credit Code, as if the provider were a credit provider; and\n    (d) Subdivision BA of Division 2 of Part 2 of the ASIC Act, as if the relevant contract (see paragraph (b) of the definition of eligible credit activity in section 5 of this instrument) for the credit activity were a consumer contract (within the meaning of subsection 12BF(3) of that Act);\n  in relation to engaging in the credit activity during the testing period for the eligible class of credit activities that includes the credit activity.\n\n#### 18 Condition—make‑good orders\n\n  (1) The condition in this section is met for an eligible credit activity if, when an order under subsection (2) has been given to the provider for the credit activity, the provider:\n    (a) complies with the order within the 30‑day period starting on the day after the provider was given the order; and\n    (b) lodges with ASIC, during that 30‑day period, a notice in an approved form stating that the provider has complied with the order.\n  (2) ASIC may, by written notice given to the provider, order that the provider ensures that specified conduct:\n    (a) is engaged in in relation to an eligible credit activity; or\n    (b) is not engaged in in relation to an eligible credit activity;\n  if:\n    (c) the provider has an exemption under section 6 for the credit activity; and\n    (d) ASIC is satisfied that engaging in the credit activity has resulted, or is likely to result, in significant detriment to one or more consumers.\n  (3) Applications may be made to the Administrative Review Tribunal for review of decisions made by ASIC under subsection (2).\n\n> Note: This subsection is made for the purposes of paragraph 327(1)(i) of the Act.","sortOrder":10},{"sectionNumber":"9","sectionType":"section","heading":"Not meeting certain limits will cause the exemption to cease automatically","content":"#### 9 Not meeting certain limits will cause the exemption to cease automatically\n\n  Each of the provider’s exemptions under section 6 for eligible credit activities ceases to apply if (and when) the provider fails to meet:\n    (a) the condition in section 10 for any of those eligible credit activities; or\n    (b) a condition in a section of Division 1 of Part 3 of the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020 for an eligible financial service (within the meaning of those Regulations) for which the provider has an exemption under those Regulations.","sortOrder":11},{"sectionNumber":"10","sectionType":"section","heading":"Exposure limits for exempt credit activities—total limit for all activities etc.","content":"#### 10 Exposure limits for exempt credit activities—total limit for all activities etc.\n\n  (1) The provider meets the condition in this section for an eligible credit activity if the provider ensures that no more than a total of $5 million made up of the following:\n    (a) the value of credit contracts entered into in relation to eligible credit activities;\n    (b) gross written premiums for eligible general insurance products;\n    (c) gross written premiums for eligible life risk insurance products;\n    (d) contributions in eligible superannuation products;\n    (e) commitments to other kinds of financial product;\n  arises for consumers, retail clients and wholesale clients as the result of the matters referred to in subsections (2) and (3).\n  (2) For the purposes of paragraph (1)(a), the matters are the engaging in of eligible credit activities if:\n    (a) either the provider, or a related body corporate of the provider, has or has had an exemption under section 6 for each of the eligible credit activities; and\n    (b) each eligible credit activity was engaged in, by the person with that exemption for that credit activity, during the testing period of that person’s exemption for that credit activity.\n  (3) For the purposes of paragraphs (1)(b) to (e), the matters are the provision of eligible financial services if:\n    (a) either the provider, or a related body corporate of the provider, has or has had an exemption under section 6 of the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020 for each of the eligible financial services; and\n    (b) the provision of each of the eligible financial services, by the person with that exemption for that service, happened during the testing period (within the meaning of those Regulations) of that person’s exemption for that service.\n  (4) In this section:\n\n> eligible financial service has the same meaning as in the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\n> eligible general insurance product has the same meaning as in the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\n> eligible life risk insurance product has the same meaning as in the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\n> eligible superannuation product has the same meaning as in the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\n> financial product has the same meaning as in the Corporations Act 2001.\n\n> retail client has the same meaning as in the Corporations Act 2001.\n\n> wholesale client has the same meaning as in the Corporations Act 2001.","sortOrder":12},{"sectionNumber":"Division 2","sectionType":"division","heading":"Other ways exemption can cease","content":"## Part 1—Preliminary\n\n#### 1 Name\n\n  This instrument is the National Consumer Credit Protection (FinTech Sandbox Australian Credit Licence Exemption) Regulations 2020.\n\n#### 3 Authority\n\n  This instrument is made under the National Consumer Credit Protection Act 2009.\n\n#### 4 Simplified outline of this instrument\n\nA person may use an exemption from the licensing requirements in Part 2‑2 of the Act to test eligible credit activities.\n\nThe exemption will only become available if:\n\n(a) the person is an eligible person; and\n\n(b) the person lodges a valid notification and satisfies certain requirements (see Part 4).\n\nThe exemption will also not become available if:\n\n(a) ASIC is not satisfied that it will result, or be likely to result, in a net benefit to the public; or\n\n(b) ASIC is not satisfied that the credit activity is new, or is a new adaptation or improvement of another credit activity; or\n\n(c) ASIC reasonably believes that certain other circumstances exist.\n\nThere are 2 kinds of eligible credit activities. The exemption can become available at the same time, or at different times, for those 2 kinds. However, the exemption cannot become available a second time to test the same kind of credit activity.\n\nEach exemption lasts up to 24 months.\n\nEach exemption is subject to conditions that limit the exposure of the person’s consumers to the credit activities, including the total investment activity under the exemptions and any exemptions under the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\nEach exemption will cease automatically if the person fails to meet these limits (see Division 1 of Part 3), or if the person ceases to be an eligible person.\n\nEach exemption is also subject to other conditions (see Part 5). Failing to meet these conditions may result in ASIC cancelling the exemption or applying to the Court for an order that the person comply with the conditions.\n\nOnly one member of a group of related bodies corporate can use an exemption at any one time.\n\n#### 5 Definitions\n\n  In this instrument:\n\n> Act means the National Consumer Credit Protection Act 2009.\n\n> Chapter 5 body corporate has the same meaning as in the Corporations Act 2001.\n\n> eligible credit activity means a credit activity that:\n\n    (a) is covered by item 1 or 2 of the table in subsection 6(1) of the Act; and\n    (b) has a related credit contract, or proposed credit contract, (the relevant contract);\n  if each of the following paragraphs applies to the relevant contract:\n    (c) the relevant contract is not a reverse mortgage or a small amount credit contract;\n    (d) none of the amount of credit that may be provided under the relevant contract is secured by a charge or lien over a consumer’s household property covered by subsection 27(1) of the Bankruptcy Regulations 2021 (worked out as if the consumer were a bankrupt);\n    (e) the credit limit of the relevant contract is more than $2,000 but does not exceed $25,000;\n    (f) the term of the relevant contract does not exceed 4 years.\n\n> eligible person, for an eligible credit activity, means a person who:\n\n    (a) is none of the following:\n    (i) a person authorised by a licence to engage in the eligible credit activity;\n    (ii) a credit representative of a licensee for engaging in the eligible credit activity;\n    (iii) a related body corporate of a body corporate covered by subparagraph (i) or (ii);\n    (iv) a natural person who is neither an Australian citizen, nor a permanent resident, within the meaning of the Australian Citizenship Act 2007; and\n    (b) if the person is a foreign company—is registered under Division 2 of Part 5B.2 of the Corporations Act 2001.\n\n> provider has the meaning given by section 6.\n\n> testing period has the meaning given by section 7.\n\n## Part 2—Exemption from credit activity licensing requirements for testing in the FinTech sandbox\n\n#### 6 Exemption for testing eligible credit activities in the FinTech sandbox\n\n  For the purposes of paragraph 110(1)(a) of the Act, a person (the provider) is exempt from subsection 29(1) of the Act for engaging in an eligible credit activity during the period referred to in section 7 of this instrument if:\n    (a) the provider is an eligible person for the eligible credit activity; and\n    (b) the provider has lodged with ASIC in the approved form a notification that complies with subsection 13(1) of this instrument for the eligible credit activity; and\n    (c) the 30‑day period starting on the day the notification was so lodged has ended without ASIC giving the provider written notice of a decision under subsection 8(1) of this instrument relating to the notification.\n\n> Note 1: The exemption will also not be available if the provider has already been exempt for the same kind of credit activity (see paragraph (b) and paragraph 13(1)(c)).\n\n> Note 2: The provider will automatically cease to be exempt if the provider becomes licensed to engage in the eligible credit activity, or otherwise ceases to be an eligible person for the eligible credit activity (see the definition of eligible person in section 5).\n\n#### 7 Duration of the exemption\n\n  The period (the testing period), of the provider’s exemption under section 6 for the eligible credit activity, is the 24 months starting on the day after the last day of the 30‑day period referred to in paragraph 6(c).\n\n> Note: The exemption may end earlier (see Part 3).\n\n#### 8 Grounds for ASIC deciding that the exemption is not available\n\n  (1) ASIC may, after considering the notification lodged under paragraph 6(b) by the provider for the eligible credit activity, decide that:\n    (a) it is not satisfied that both paragraphs 6(a) and (b) are met for the provider and the credit activity; or\n    (b) it is not satisfied that exempting the credit activity will result, or be likely to result, in a benefit to the public that will outweigh the detriment to the public that will result, or be likely to result, from exempting that credit activity; or\n    (c) it is not satisfied that the credit activity:\n    (i) is new; or\n    (ii) is a new adaptation, or new improvement, of another credit activity; or\n    (d) it reasonably believes that a condition in section 14, 15, 16, 17 or 18 is not met for another eligible credit activity for which the provider has or has had an exemption under section 6; or\n    (e) if the assumption were made that the credit activity is covered by a licence—it reasonably believes that the requirement in section 37A of the Act (about the fit and proper person test) would not be satisfied in relation to the provider and the licence; or\n    (f) it reasonably believes that the provider has failed to act fairly, efficiently or honestly in engaging in credit activities or in providing financial services (within the meaning of the Corporations Act 2001); or\n    (g) it reasonably believes that a purpose for seeking the provider’s exemption under section 6 for the credit activity was to continue or recommence an exemption under section 6 that was earlier obtained by another person; or\n    (h) it reasonably believes that engaging in the eligible credit activity is likely to result in significant detriment to one or more consumers; or\n    (i) any exemption of the provider under the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020 is or has been cancelled under section 14 of those Regulations.\n  (2) Applications may be made to the Administrative Review Tribunal for review of decisions made by ASIC under subsection (1).\n\n> Note: This subsection is made for the purposes of paragraph 327(1)(i) of the Act.\n\n## Part 3—When exemption ceases before the end of the testing period\n\n### Division 1—When exemption ceases automatically\n\n#### 9 Not meeting certain limits will cause the exemption to cease automatically\n\n  Each of the provider’s exemptions under section 6 for eligible credit activities ceases to apply if (and when) the provider fails to meet:\n    (a) the condition in section 10 for any of those eligible credit activities; or\n    (b) a condition in a section of Division 1 of Part 3 of the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020 for an eligible financial service (within the meaning of those Regulations) for which the provider has an exemption under those Regulations.\n\n#### 10 Exposure limits for exempt credit activities—total limit for all activities etc.\n\n  (1) The provider meets the condition in this section for an eligible credit activity if the provider ensures that no more than a total of $5 million made up of the following:\n    (a) the value of credit contracts entered into in relation to eligible credit activities;\n    (b) gross written premiums for eligible general insurance products;\n    (c) gross written premiums for eligible life risk insurance products;\n    (d) contributions in eligible superannuation products;\n    (e) commitments to other kinds of financial product;\n  arises for consumers, retail clients and wholesale clients as the result of the matters referred to in subsections (2) and (3).\n  (2) For the purposes of paragraph (1)(a), the matters are the engaging in of eligible credit activities if:\n    (a) either the provider, or a related body corporate of the provider, has or has had an exemption under section 6 for each of the eligible credit activities; and\n    (b) each eligible credit activity was engaged in, by the person with that exemption for that credit activity, during the testing period of that person’s exemption for that credit activity.\n  (3) For the purposes of paragraphs (1)(b) to (e), the matters are the provision of eligible financial services if:\n    (a) either the provider, or a related body corporate of the provider, has or has had an exemption under section 6 of the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020 for each of the eligible financial services; and\n    (b) the provision of each of the eligible financial services, by the person with that exemption for that service, happened during the testing period (within the meaning of those Regulations) of that person’s exemption for that service.\n  (4) In this section:\n\n> eligible financial service has the same meaning as in the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\n> eligible general insurance product has the same meaning as in the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\n> eligible life risk insurance product has the same meaning as in the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\n> eligible superannuation product has the same meaning as in the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020.\n\n> financial product has the same meaning as in the Corporations Act 2001.\n\n> retail client has the same meaning as in the Corporations Act 2001.\n\n> wholesale client has the same meaning as in the Corporations Act 2001.\n\n### Division 2—Other ways exemption can cease\n\n#### 11 Exemption ceases because of ASIC decision\n\n  (1) ASIC may, by written notice given to the provider, cancel the provider’s exemption under section 6 for an eligible credit activity if:\n    (a) one or more of paragraphs 8(1)(c) to (i) now apply for the provider and the credit activity; or\n    (b) a condition in section 14, 15, 16, 17 or 18 is not met for the credit activity; or\n    (c) ASIC reasonably believes that engaging in the credit activity has resulted in significant detriment to one or more consumers.\n\n> Note 1: Before, or instead of, acting under this section for a failure to meet a condition in paragraph (b), ASIC could seek an order for the provider to comply with the condition (see subsection 110(3) of the Act).\n\n> Note 2: Before, or instead of, acting under this section because of paragraph (c), ASIC could consider making a make‑good order (see section 18).\n\n  (2) The cancellation takes effect on the day specified in the notice, which must not be a day before the notice is given to the provider.\n  (3) Applications may be made to the Administrative Review Tribunal for review of decisions made by ASIC under subsection (1).\n\n> Note: This subsection is made for the purposes of paragraph 327(1)(i) of the Act.\n\n#### 12 Exemption ceases if provider notifies ASIC\n\n  (1) The provider’s exemption under section 6 ceases to apply for an eligible credit activity if the provider lodges with ASIC a written notice to that effect.\n  (2) The cancellation takes effect on the day specified in the notice, which must not be a day before the notice is lodged with ASIC.\n\n## Part 4—Requirements for the exemption to exist\n\n#### 13 Lodging a valid notification for eligible credit activities\n\n  (1) The provider’s notification complies with this subsection for an eligible credit activity (the current credit activity) if:\n    (a) the notification includes the matters in subsection (2); and\n    (b) the notification states that the provider is proposing to use the exemption under section 6 for the current credit activity; and\n    (c) if the provider, or a related body corporate of the provider, has earlier obtained an exemption under section 6 for another eligible credit activity—that other credit activity is not covered by the same item of the table in subsection 6(1) of the Act as the current credit activity; and\n    (d) no related body corporate of the provider currently has:\n    (i) an exemption under section 6 for an eligible credit activity; or\n    (ii) an exemption under section 6 of the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020; and\n    (e) no related body corporate of the provider has lodged with ASIC:\n    (i) a notification under this instrument that includes the matters in subsection (2); or\n    (ii) a notification under the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020 that includes the matters in subsection 16(2) of that instrument;\n    during the 30‑day period ending on the day the notification referred to in paragraph (a) of this subsection is lodged with ASIC.\n\n> Note: A consequence of this subsection is that only one member of a group of related bodies corporate can ever use the exemption to test credit activities at any one time.\n\n  (2) The matters to include in the notification are as follows:\n    (a) the provider’s name, address and contact details;\n    (b) the address of the provider’s website (if any);\n    (c) if the provider is a natural person—the person’s date of birth;\n    (d) if the provider is a body corporate:\n    (i) the provider’s ABN, ACN and ARBN, (within the meaning of the Corporations Act 2001) if any; and\n    (ii) the name and contact details of a contact person who is a natural person who can be contacted in relation to the notice;\n    (e) if the provider is:\n    (i) a licensee; or\n    (ii) a credit representative of a licensee; or\n    (iii) a related body corporate of a person referred to in subparagraph (i) or (ii);\n    that licensee’s Australian credit licence number;\n    (f) a description of each eligible credit activity for which the provider is proposing to use the exemption under section 6;\n    (g) a justification of why exempting each eligible credit activity covered by paragraph (f) will result, or be likely to result, in a benefit to the public that will outweigh the detriment to the public that will result, or be likely to result, from exempting that credit activity;\n    (h) a justification of why each eligible credit activity covered by paragraph (f):\n    (i) is new; or\n    (ii) is a new adaptation, or new improvement, of another credit activity;\n    (i) the name of any person (including any related body corporate of the provider), other than an employee or director:\n    (i) of the provider; or\n    (ii) of any related body corporate of the provider;\n    whose role includes being responsible for making significant decisions about the ongoing engaging in of each eligible credit activity covered by paragraph (f), and a description of that role;\n    (j) if the assumption were made that each eligible credit activity covered by paragraph (f) is covered by a licence—information for the purposes of ASIC making a decision about whether the requirement in section 37A of the Act (about the fit and proper person test) would be satisfied in relation to the provider and the licence;\n    (k) a description of the procedures, memberships and arrangements by which the provider will meet the condition in section 16 (about dispute resolution and compensation) for each eligible credit activity covered by paragraph (f).\n\n> Note 1: The same notification may specify 2 eligible credit activities. If it does, each of them will be the subject of a separate exemption under section 6 (assuming the other eligibility criteria are satisfied).\n\n> Note 2: Paragraph (j) is relevant for decisions by ASIC under paragraph 8(1)(e).\n\n> Note 3: Since paragraph 6(b) requires the notification to be lodged with ASIC in the approved form, the notification must include any information, statements, explanations or other matters required by the form (see section 217 of the Act).\n\n## Part 5—Conditions for the exemption\n\n#### 14 Condition—notifying all consumers before engaging in an exempt credit activity\n\n  The condition in this section is met for an eligible credit activity if, before engaging in the credit activity with a consumer, the provider clearly and prominently discloses to the consumer that:\n    (a) the provider is not authorised by an Australian credit licence to engage in the credit activity; and\n    (b) the provider is not a credit representative of a licensee for engaging in the credit activity; and\n    (c) the credit activity is being provided under an exemption provided under the National Consumer Credit Protection (FinTech Sandbox Australian Credit Licence Exemption) Regulations 2020; and\n    (d) some of the normal protections associated with receiving credit activities or credit services from a licensee will not apply; and\n    (e) the provider will notify the consumer in writing if any of the events referred to in paragraph 15(a) (which the provider must list) happens.\n\n#### 15 Condition—notifying consumers while engaging in an exempt credit activity\n\n  The condition in this section is met for an eligible credit activity if, when engaging in the credit activity with one or more consumers, the provider:\n    (a) notifies each of those consumers in writing within 10 business days after the happening of any of the following events:\n    (i) the provider has ceased to engage in credit activities;\n    (ii) the provider has become a Chapter 5 body corporate, or under a foreign law has started to be in a similar position to a Chapter 5 body corporate;\n    (iii) the provider has become bankrupt, or has applied to take the benefit of any law for the relief of bankrupt or insolvent debtors;\n    (iv) the provider has compounded with the provider’s creditors, or has made an assignment of the provider’s remuneration for the benefit of the provider’s creditors;\n    (v) the provider has become authorised by an Australian credit licence to engage in the credit activity;\n    (vi) the provider has become a credit representative of a licensee for engaging in the credit activity;\n    (vii) the provider has ceased to rely on an exemption provided under the National Consumer Credit Protection (FinTech Sandbox Australian Credit Licence Exemption) Regulations 2020;\n    (viii) the credit activity has materially changed;\n    (ix) the credit activity is no longer being offered to new consumers; and\n    (b) notifies ASIC in writing within 10 business days after the happening of any of the events referred to in paragraph (a) (other than the events in subparagraphs (a)(v) and (vi)).\n\n#### 16 Condition—maintaining certain procedures, memberships and arrangements\n\n  The condition in this section is met for an eligible credit activity if the provider:\n    (a) establishes and maintains an internal dispute resolution procedure that:\n    (i) complies with the standards, and requirements, made or approved for the purposes of subparagraph 47(1)(h)(i) of the Act; and\n    (ii) covers disputes in relation to the engaging in of the credit activity; and\n    (b) is a member of the AFCA scheme for the purposes of dealing with complaints against the provider made by consumers in connection with the engaging in of the credit activity; and\n    (c) establishes and maintains arrangements that:\n    (i) include holding adequate professional indemnity insurance; or\n    (ii) are approved by ASIC in writing as adequate;\n    for compensating the provider’s consumers for loss or damage suffered because of breaches of the Act, or of the conditions in this instrument by the provider or its representatives; and\n    (d) continues the memberships referred to in paragraph (b), and the arrangements referred to in paragraph (c), for at least 12 months after the end of the credit activity’s testing period.\n\n#### 17 Condition—other obligations\n\n  The condition in this section is met for an eligible credit activity if the provider complies with:\n    (a) Chapter 3 of the Act (other than paragraphs 113(2)(d), 126(2)(d) and 127(2)(d), section 124A and Part 3‑2C), as if the provider were a licensee for the purposes of that Chapter; and\n    (b) section 124A and Part 3‑2C of the Act, to the extent that those provisions relate to short‑term credit contracts, as if the provider were a licensee for the purposes of those provisions; and\n    (c) Division 4A of Part 2, and Division 3 of Part 4, of the National Credit Code, as if the provider were a credit provider; and\n    (d) Subdivision BA of Division 2 of Part 2 of the ASIC Act, as if the relevant contract (see paragraph (b) of the definition of eligible credit activity in section 5 of this instrument) for the credit activity were a consumer contract (within the meaning of subsection 12BF(3) of that Act);\n  in relation to engaging in the credit activity during the testing period for the eligible class of credit activities that includes the credit activity.\n\n#### 18 Condition—make‑good orders\n\n  (1) The condition in this section is met for an eligible credit activity if, when an order under subsection (2) has been given to the provider for the credit activity, the provider:\n    (a) complies with the order within the 30‑day period starting on the day after the provider was given the order; and\n    (b) lodges with ASIC, during that 30‑day period, a notice in an approved form stating that the provider has complied with the order.\n  (2) ASIC may, by written notice given to the provider, order that the provider ensures that specified conduct:\n    (a) is engaged in in relation to an eligible credit activity; or\n    (b) is not engaged in in relation to an eligible credit activity;\n  if:\n    (c) the provider has an exemption under section 6 for the credit activity; and\n    (d) ASIC is satisfied that engaging in the credit activity has resulted, or is likely to result, in significant detriment to one or more consumers.\n  (3) Applications may be made to the Administrative Review Tribunal for review of decisions made by ASIC under subsection (2).\n\n> Note: This subsection is made for the purposes of paragraph 327(1)(i) of the Act.","sortOrder":13},{"sectionNumber":"11","sectionType":"section","heading":"Exemption ceases because of ASIC decision","content":"#### 11 Exemption ceases because of ASIC decision\n\n  (1) ASIC may, by written notice given to the provider, cancel the provider’s exemption under section 6 for an eligible credit activity if:\n    (a) one or more of paragraphs 8(1)(c) to (i) now apply for the provider and the credit activity; or\n    (b) a condition in section 14, 15, 16, 17 or 18 is not met for the credit activity; or\n    (c) ASIC reasonably believes that engaging in the credit activity has resulted in significant detriment to one or more consumers.\n\n> Note 1: Before, or instead of, acting under this section for a failure to meet a condition in paragraph (b), ASIC could seek an order for the provider to comply with the condition (see subsection 110(3) of the Act).\n\n> Note 2: Before, or instead of, acting under this section because of paragraph (c), ASIC could consider making a make‑good order (see section 18).\n\n  (2) The cancellation takes effect on the day specified in the notice, which must not be a day before the notice is given to the provider.\n  (3) Applications may be made to the Administrative Review Tribunal for review of decisions made by ASIC under subsection (1).\n\n> Note: This subsection is made for the purposes of paragraph 327(1)(i) of the Act.","sortOrder":14},{"sectionNumber":"12","sectionType":"section","heading":"Exemption ceases if provider notifies ASIC","content":"#### 12 Exemption ceases if provider notifies ASIC\n\n  (1) The provider’s exemption under section 6 ceases to apply for an eligible credit activity if the provider lodges with ASIC a written notice to that effect.\n  (2) The cancellation takes effect on the day specified in the notice, which must not be a day before the notice is lodged with ASIC.","sortOrder":15},{"sectionNumber":"Part 4","sectionType":"part","heading":"Requirements for the exemption to exist","content":"## Part 4—Requirements for the exemption to exist","sortOrder":16},{"sectionNumber":"13","sectionType":"section","heading":"Lodging a valid notification for eligible credit activities","content":"#### 13 Lodging a valid notification for eligible credit activities\n\n  (1) The provider’s notification complies with this subsection for an eligible credit activity (the current credit activity) if:\n    (a) the notification includes the matters in subsection (2); and\n    (b) the notification states that the provider is proposing to use the exemption under section 6 for the current credit activity; and\n    (c) if the provider, or a related body corporate of the provider, has earlier obtained an exemption under section 6 for another eligible credit activity—that other credit activity is not covered by the same item of the table in subsection 6(1) of the Act as the current credit activity; and\n    (d) no related body corporate of the provider currently has:\n    (i) an exemption under section 6 for an eligible credit activity; or\n    (ii) an exemption under section 6 of the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020; and\n    (e) no related body corporate of the provider has lodged with ASIC:\n    (i) a notification under this instrument that includes the matters in subsection (2); or\n    (ii) a notification under the Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020 that includes the matters in subsection 16(2) of that instrument;\n    during the 30‑day period ending on the day the notification referred to in paragraph (a) of this subsection is lodged with ASIC.\n\n> Note: A consequence of this subsection is that only one member of a group of related bodies corporate can ever use the exemption to test credit activities at any one time.\n\n  (2) The matters to include in the notification are as follows:\n    (a) the provider’s name, address and contact details;\n    (b) the address of the provider’s website (if any);\n    (c) if the provider is a natural person—the person’s date of birth;\n    (d) if the provider is a body corporate:\n    (i) the provider’s ABN, ACN and ARBN, (within the meaning of the Corporations Act 2001) if any; and\n    (ii) the name and contact details of a contact person who is a natural person who can be contacted in relation to the notice;\n    (e) if the provider is:\n    (i) a licensee; or\n    (ii) a credit representative of a licensee; or\n    (iii) a related body corporate of a person referred to in subparagraph (i) or (ii);\n    that licensee’s Australian credit licence number;\n    (f) a description of each eligible credit activity for which the provider is proposing to use the exemption under section 6;\n    (g) a justification of why exempting each eligible credit activity covered by paragraph (f) will result, or be likely to result, in a benefit to the public that will outweigh the detriment to the public that will result, or be likely to result, from exempting that credit activity;\n    (h) a justification of why each eligible credit activity covered by paragraph (f):\n    (i) is new; or\n    (ii) is a new adaptation, or new improvement, of another credit activity;\n    (i) the name of any person (including any related body corporate of the provider), other than an employee or director:\n    (i) of the provider; or\n    (ii) of any related body corporate of the provider;\n    whose role includes being responsible for making significant decisions about the ongoing engaging in of each eligible credit activity covered by paragraph (f), and a description of that role;\n    (j) if the assumption were made that each eligible credit activity covered by paragraph (f) is covered by a licence—information for the purposes of ASIC making a decision about whether the requirement in section 37A of the Act (about the fit and proper person test) would be satisfied in relation to the provider and the licence;\n    (k) a description of the procedures, memberships and arrangements by which the provider will meet the condition in section 16 (about dispute resolution and compensation) for each eligible credit activity covered by paragraph (f).\n\n> Note 1: The same notification may specify 2 eligible credit activities. If it does, each of them will be the subject of a separate exemption under section 6 (assuming the other eligibility criteria are satisfied).\n\n> Note 2: Paragraph (j) is relevant for decisions by ASIC under paragraph 8(1)(e).\n\n> Note 3: Since paragraph 6(b) requires the notification to be lodged with ASIC in the approved form, the notification must include any information, statements, explanations or other matters required by the form (see section 217 of the Act).","sortOrder":17},{"sectionNumber":"Part 5","sectionType":"part","heading":"Conditions for the exemption","content":"## Part 5—Conditions for the exemption","sortOrder":18},{"sectionNumber":"14","sectionType":"section","heading":"Condition—notifying all consumers before engaging in an exempt credit activity","content":"#### 14 Condition—notifying all consumers before engaging in an exempt credit activity\n\n  The condition in this section is met for an eligible credit activity if, before engaging in the credit activity with a consumer, the provider clearly and prominently discloses to the consumer that:\n    (a) the provider is not authorised by an Australian credit licence to engage in the credit activity; and\n    (b) the provider is not a credit representative of a licensee for engaging in the credit activity; and\n    (c) the credit activity is being provided under an exemption provided under the National Consumer Credit Protection (FinTech Sandbox Australian Credit Licence Exemption) Regulations 2020; and\n    (d) some of the normal protections associated with receiving credit activities or credit services from a licensee will not apply; and\n    (e) the provider will notify the consumer in writing if any of the events referred to in paragraph 15(a) (which the provider must list) happens.","sortOrder":19},{"sectionNumber":"15","sectionType":"section","heading":"Condition—notifying consumers while engaging in an exempt credit activity","content":"#### 15 Condition—notifying consumers while engaging in an exempt credit activity\n\n  The condition in this section is met for an eligible credit activity if, when engaging in the credit activity with one or more consumers, the provider:\n    (a) notifies each of those consumers in writing within 10 business days after the happening of any of the following events:\n    (i) the provider has ceased to engage in credit activities;\n    (ii) the provider has become a Chapter 5 body corporate, or under a foreign law has started to be in a similar position to a Chapter 5 body corporate;\n    (iii) the provider has become bankrupt, or has applied to take the benefit of any law for the relief of bankrupt or insolvent debtors;\n    (iv) the provider has compounded with the provider’s creditors, or has made an assignment of the provider’s remuneration for the benefit of the provider’s creditors;\n    (v) the provider has become authorised by an Australian credit licence to engage in the credit activity;\n    (vi) the provider has become a credit representative of a licensee for engaging in the credit activity;\n    (vii) the provider has ceased to rely on an exemption provided under the National Consumer Credit Protection (FinTech Sandbox Australian Credit Licence Exemption) Regulations 2020;\n    (viii) the credit activity has materially changed;\n    (ix) the credit activity is no longer being offered to new consumers; and\n    (b) notifies ASIC in writing within 10 business days after the happening of any of the events referred to in paragraph (a) (other than the events in subparagraphs (a)(v) and (vi)).","sortOrder":20},{"sectionNumber":"16","sectionType":"section","heading":"Condition—maintaining certain procedures, memberships and arrangements","content":"#### 16 Condition—maintaining certain procedures, memberships and arrangements\n\n  The condition in this section is met for an eligible credit activity if the provider:\n    (a) establishes and maintains an internal dispute resolution procedure that:\n    (i) complies with the standards, and requirements, made or approved for the purposes of subparagraph 47(1)(h)(i) of the Act; and\n    (ii) covers disputes in relation to the engaging in of the credit activity; and\n    (b) is a member of the AFCA scheme for the purposes of dealing with complaints against the provider made by consumers in connection with the engaging in of the credit activity; and\n    (c) establishes and maintains arrangements that:\n    (i) include holding adequate professional indemnity insurance; or\n    (ii) are approved by ASIC in writing as adequate;\n    for compensating the provider’s consumers for loss or damage suffered because of breaches of the Act, or of the conditions in this instrument by the provider or its representatives; and\n    (d) continues the memberships referred to in paragraph (b), and the arrangements referred to in paragraph (c), for at least 12 months after the end of the credit activity’s testing period.","sortOrder":21},{"sectionNumber":"17","sectionType":"section","heading":"Condition—other obligations","content":"#### 17 Condition—other obligations\n\n  The condition in this section is met for an eligible credit activity if the provider complies with:\n    (a) Chapter 3 of the Act (other than paragraphs 113(2)(d), 126(2)(d) and 127(2)(d), section 124A and Part 3‑2C), as if the provider were a licensee for the purposes of that Chapter; and\n    (b) section 124A and Part 3‑2C of the Act, to the extent that those provisions relate to short‑term credit contracts, as if the provider were a licensee for the purposes of those provisions; and\n    (c) Division 4A of Part 2, and Division 3 of Part 4, of the National Credit Code, as if the provider were a credit provider; and\n    (d) Subdivision BA of Division 2 of Part 2 of the ASIC Act, as if the relevant contract (see paragraph (b) of the definition of eligible credit activity in section 5 of this instrument) for the credit activity were a consumer contract (within the meaning of subsection 12BF(3) of that Act);\n  in relation to engaging in the credit activity during the testing period for the eligible class of credit activities that includes the credit activity.","sortOrder":22},{"sectionNumber":"18","sectionType":"section","heading":"Condition—make‑good orders","content":"#### 18 Condition—make‑good orders\n\n  (1) The condition in this section is met for an eligible credit activity if, when an order under subsection (2) has been given to the provider for the credit activity, the provider:\n    (a) complies with the order within the 30‑day period starting on the day after the provider was given the order; and\n    (b) lodges with ASIC, during that 30‑day period, a notice in an approved form stating that the provider has complied with the order.\n  (2) ASIC may, by written notice given to the provider, order that the provider ensures that specified conduct:\n    (a) is engaged in in relation to an eligible credit activity; or\n    (b) is not engaged in in relation to an eligible credit activity;\n  if:\n    (c) the provider has an exemption under section 6 for the credit activity; and\n    (d) ASIC is satisfied that engaging in the credit activity has resulted, or is likely to result, in significant detriment to one or more consumers.\n  (3) Applications may be made to the Administrative Review Tribunal for review of decisions made by ASIC under subsection (2).\n\n> Note: This subsection is made for the purposes of paragraph 327(1)(i) of the Act.","sortOrder":23}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"flash_summary":{"complexity_score":7,"scope_assessment":{"changed":false,"description":"The instrument implements a narrowly defined FinTech sandbox exemption mechanism for consumer credit testing: temporary exemptions for specified small‑value credit contracts, subject to disclosure, consumer protection arrangements and an aggregate exposure cap. The text stays within that original, limited scope—it does not broaden regulated activity or convert the exemption into a permanent substitute for licensing. Instead it constrains scale, duration and participants while linking the credit sandbox to the Corporations Act sandbox for financial services, preserving the instrument's original purpose as a time‑limited testing pathway (see ss6–7, s10, s13–s17)."},"complexity_factors":["Cross‑references to multiple other statutes and instruments (National Consumer Credit Protection Act 2009, Corporations Act 2001, National Credit Code, ASIC Act, Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020) — see ss5,10,16,17","Multiple defined terms with operational effect (eligible credit activity, eligible person, provider, testing period) — see s5","Layered conditional logic for eligibility and notification acceptance (eligibility exclusions, 30‑day review window, ASIC discretionary grounds) — see ss6,8,13","Aggregate exposure cap that aggregates different product types and cross‑regulated exemptions (complex measurement and aggregation rules) — see s10","Numerous ongoing conditions and post‑testing obligations (disclosure, AFCA membership, PI insurance or ASIC approval, internal dispute procedures, 12 months post‑testing requirement) — see s14–s16","Multiple termination routes: automatic cessation on limit breach, ASIC cancellation, provider notice, becoming licensed — see ss9–12","Appeal and review pathways (Administrative Review Tribunal) for several ASIC decisions — see ss8(2),11(3),18(3)","Restrictions on group structuring (only one related body corporate may use the sandbox at a time; prior use blocks repetition) — see s13(1)(c),(d)","Consequence complexity where the same notification can create separate exemptions for two eligible credit activities but still counts towards aggregate limits — see s13 Note 1 and s10","Several exceptions and provisos within conditions (e.g. partial carve‑outs of certain Chapter 3 provisions; references to short‑term credit exceptions) — see s17"],"plain_english_summary":"**What this instrument does (mechanics)\n\n- Creates a temporary licence exemption that lets certain businesses test specified small‑scale credit products in a FinTech ‘sandbox’ without holding an Australian credit licence (see section 6).\n- The exemption starts after a valid notification is lodged with ASIC and a 30‑day period ends without ASIC refusing (s6(c), s13). The testing period is up to 24 months (s7).\n- Only an \"eligible person\" can use the exemption; eligible persons exclude existing credit licence holders, credit representatives, related bodies corporate of those entities, and non‑residents who are not permanent residents/citizens (see definition of \"eligible person\" in s5).\n- The exemption is limited in scale. The provider (together with related entities and in combination with related exemptions under the Corporations FinTech sandbox rules) must ensure total consumer exposure does not exceed $5 million across specified product types (credit contracts, certain insurance premiums, superannuation contributions, other commitments) or the exemption automatically ceases (s10, s9).\n- The exemption is subject to specific consumer‑protection and operational conditions: clear upfront disclosures to consumers (s14); notifications during the testing period about important events (s15); internal dispute resolution, AFCA membership and arrangements for consumer compensation (professional indemnity insurance or ASIC approval) (s16); and compliance with a range of substantive credit law obligations as if the provider were licensed (s17). ASIC can issue make‑good orders where activities cause significant detriment (s18).\n- ASIC has express powers to refuse to allow an exemption after considering the notification, and to cancel an exemption during the testing period on enumerated grounds; decisions are reviewable to the Administrative Review Tribunal (s8, s11).\n- Additional procedural limits: the same kind of credit activity cannot be tested twice by the same provider or its related entities, and only one member of a group of related bodies corporate may use the sandbox at a time (s13(c),(d); explanatory notes).\n\nWhy the instrument exists (official rationale) and how the text implements it\n\n- The instrument implements a FinTech sandbox for consumer credit by giving eligible start‑ups and innovators a temporary, conditional exemption from the normal licensing requirement so they can test \"new\" or newly adapted credit activities (s6, s8). The text implements that by:\n  - Requiring providers to justify that the activity is new (s13(2)(h)) and to explain public benefit (s13(2)(g)).\n  - Imposing a fixed testing duration (24 months) and a 30‑day pre‑start assessment window for ASIC (s7, s6(c)).\n  - Setting exposure caps and consumer protections designed to limit potential harm (s10; s14–s18).\n\nWho pays, who decides, and what behaviour changes\n\n- Who pays: the provider bears the administrative and compliance costs (preparing the notification, maintaining AFCA membership, internal dispute systems, PI insurance or ASIC‑approved arrangements, notifications to consumers and ASIC, responding to ASIC orders). Consumers face the practical effect that they receive services from an unlicensed provider with some but not all protections of a licensed provider — providers must disclose that difference before dealing (s14).\n- Who decides: ASIC decides whether the exemption proceeds (can refuse within the 30‑day window – s6(c), s8), can cancel exemptions or make‑good orders during testing (s11, s18), and can approve alternative compensation arrangements (s16(c)(ii)). Decisions to refuse or cancel are subject to Administrative Review Tribunal review (s8(2), s11(3), s18(3)).\n- Behavioural change encouraged: eligible firms can bring untested, small‑scale credit products to market for limited periods without obtaining a full credit licence. The rules incentivise keeping tests small (the $5m cap), embedding consumer complaint and compensation arrangements, and documenting novelty and public benefit in the notification (s10, s13(2)(g),(h), s16).\n\nTrade‑offs, costs, incentives and practical risks (tested against the instrument text)\n\n- Compliance and administrative costs are concentrated on providers: the notification requires detailed disclosure (s13(2)), and ongoing obligations (AFCA membership, internal dispute resolution, PI insurance) attach throughout and for 12 months after testing (s16(d)). These are explicit implementation costs.\n- Consumer protection is preserved in part: providers must comply with many substantive credit laws as if licensed (s17) and must disclose their unlicensed status to consumers (s14). However, some normal licensing protections are expressly excluded or operate differently during an exemption (the instrument requires that providers tell consumers some protections will not apply — s14(d)). The text leaves open which protections are affected because it cross‑references multiple provisions.\n- ASIC discretion is broad: ASIC may refuse or cancel on multiple grounds including lack of public benefit, not being new, prior bad conduct, or likely significant detriment (s8(1)). That creates execution risk for providers relying on the exemption and means outcomes depend on ASIC assessment (administrative uncertainty).\n- Aggregate exposure cap ($5m) groups different products and cross‑references the Corporations FinTech sandbox regimes (s10). That creates a practical constraint: testing credit together with exempted financial services/insurance/superannuation products counts toward the same cap. This may cause providers to split activities among entities, but the rules limit that by applying group and related‑entity tests and a single‑user rule for related bodies corporate (s13(d); s10(2)–(3)).\n- Opportunity cost: using the exemption prevents a second test of the same kind by the same provider or related bodies corporate (s13(1)(c)), so a firm must plan its testing strategy carefully.\n- Potential for substitution effects: because the sandbox is scale‑limited and temporary, firms that need ongoing, wide distribution will still need a full licence; the instrument therefore acts as a pathway to market rather than a permanent alternative.\n- Capture/rent‑seeking risk: the instrument contains safeguards (fit‑and‑proper checks, public‑benefit justification, review rights) but vests substantial evaluative discretion in ASIC — the text does not eliminate the possibility of uneven application of discretion (s8, s13(2)(j)).\n\nKey sections to read for operational detail: s5 (definitions), s6–s8 (how exemption is granted/refused), s7 (duration), s9–s12 (when exemption ends), s10 (aggregate $5m exposure cap), s13 (notification content), s14–s18 (conditions during testing)."},"kimi_summary":{"content_quality":"ok","complexity_score":6,"scope_assessment":{"changed":false,"description":"The legislation appears consistent with its original intent as a targeted FinTech sandbox exemption. The scope remains focused on providing a limited, time-bound exemption from credit licensing for innovative products, with appropriate consumer safeguards. The complexity reflects the necessary balancing of innovation facilitation against consumer protection, rather than scope creep."},"complexity_factors":["Extensive cross-referencing to the National Consumer Credit Protection Act 2009, Corporations Act 2001, Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020, Bankruptcy Regulations 2021, and ASIC Act","Nested conditional logic in eligibility criteria (section 5 definitions with multiple sub-paragraphs and cross-references)","Complex aggregation rules for the $5 million exposure limit spanning multiple product types and related corporate entities (section 10)","Dual notification requirements and timing dependencies (30-day waiting period, 24-month testing period, 12-month post-testing insurance requirements)","Multiple overlapping exemption cessation triggers (automatic cessation, ASIC cancellation, voluntary withdrawal, and linked cessation with Corporations Regulations sandbox)","Conditional application of licensee obligations (section 17 applies Chapter 3 of the Act with specific exclusions and modifications)","9 defined terms in section 5, with 'eligible credit activity' and 'eligible person' containing complex multi-layered definitions","Group entity restrictions preventing related bodies corporate from simultaneous or sequential sandbox use (section 13)"],"plain_english_summary":"This bill creates a temporary “sandbox” allowing eligible FinTechs to test new consumer credit products without a full Australian credit licence, while ASIC oversees and can revoke access.  \n\nIt lowers entry costs for innovators and exposes consumers to experimental offerings, so it pairs the exemption with disclosure, caps, dispute‑resolution and other safeguards to limit consumer harm."}},"importantCases":[],"_links":{"self":"/api/acts/national-consumer-credit-protection-fintech-sandbox-australian-credit-licence-exemption-regulations-","history":"/api/acts/national-consumer-credit-protection-fintech-sandbox-australian-credit-licence-exemption-regulations-/history","analysis":"/api/acts/national-consumer-credit-protection-fintech-sandbox-australian-credit-licence-exemption-regulations-/analysis","conflicts":"/api/acts/national-consumer-credit-protection-fintech-sandbox-australian-credit-licence-exemption-regulations-/conflicts","importantCases":"/api/acts/national-consumer-credit-protection-fintech-sandbox-australian-credit-licence-exemption-regulations-/important-cases","documents":"/api/acts/national-consumer-credit-protection-fintech-sandbox-australian-credit-licence-exemption-regulations-/documents"}}