ASFA cautions on super regulatory sandbox

A key superannuation organisation has signalled its opposition to allowing superannuation to be exposed to the so-called “fintech regulatory sandbox”.

The Association of Superannuation Funds of Australia (ASFA) has used a submission to the Treasury to signal its opposition to legislative proposals which might extend the “sandbox” arrangements to both superannuation and holistic financial advice, without further examination of the regulatory regime.

“We note that the existing framework provides the potential for a 12-month licence exemption period for eligible businesses to test ‘advice’ and ‘dealing’ financial services for a range of eligible products and services,” the submission said.

“Superannuation, life insurance and holist financial advice are excluded from the group of eligible products and services.”

However, the ASFA submission noted that Australian Securities and Investments Commission (ASIC) regulatory guide RG 257 – Testing fintech products and services without holding an AFSL or credit licence had stated: “We will review the licensing exemption within 12 to 18 months of operation to see if it should be broadened or changed in any other way”.

“ASFA therefore contends that a comprehensive review of the existing framework be conducted after the specified 12 to 18-month period before any changes to legislation or legislative instruments are proposed,” the submission said.

“While the draft legislation does not in itself foreshadow the enhanced scope of the regulatory sandbox we recognise that the draft regulations include provisions to include superannuation, life insurance and holistic financial advice products and services,” it said.

“Appreciating that Treasury will be conducting a separate and later consultation on the draft Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2017; ASFA will address our particular concerns and objections to the inclusion of superannuation, life insurance and holistic financial advice products and services in that process.”