ASIC Corporations and Credit (Repeal) Instrument 2020/839

Administered by Department of the Treasury

Legislation au F2020L01162 Not in force Legislative Instrument

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Explanatory Statement

 

ASIC Corporations and Credit (Repeal) Instrument 2020/839

This is the Explanatory Statement for ASIC Corporations and Credit (Repeal) Instrument 2020/839.

The Explanatory Statement is approved by the Australian Securities and Investments Commission (ASIC).

Corporations Act 2001

National Consumer Credit Protection Act 2009

Summary

  1. In 2016, ASIC established the ASIC Sandbox that provided conditional relief to allow fintech businesses to test certain products and services for 12 months without holding a licence under either the Corporations Act 2001 (Corporations Act) or the National Consumer Credit Protection Act 2009 (the National Credit Act).
  2. This licensing exemption—provided under ASIC Corporations (Concept Validation Licensing Exemption) Instrument 2016/1175 and ASIC Credit (Concept Validation Licensing Exemption) Instrument 2016/1176—was available to businesses providing certain financial services or engaging in certain credit activities that would usually require an Australian Financial Service (AFS) licence or Australian Credit Licence (credit licence).
  3. ASIC’s relief was intended to assist new businesses to test their services in an environment with a reduced regulatory burden, thereby addressing some of the key barriers to innovation that we had identified.
  4. Effective 1 September 2020 the ASIC Sandbox has been superseded by the Government’s Enhanced Regulatory Sandbox (ERS) that permits eligible entities to test a wider suite of financial services / products or engage in a wider range of credit activities for a longer duration of up to 24 months.
  5. The ERS is enabled by the following regulations:
  • Corporations (FinTech Sandbox Australian Financial Services Licence Exemption) Regulations 2020 – for exemptions from the AFS licence requirement; and
  • National Consumer Credit Protection (FinTech Sandbox Australian Credit Licence Exemption) Regulations 2020 – for exemptions from the credit licence requirement;

Purpose of the instrument

6.             The ASIC Corporations and Credit (Repeal) Instrument 2020/839 repeals the following two ASIC instruments which established the ASIC Sandbox since the ASIC Sandbox is no longer available for testing:

  • ASIC Corporations (Concept Validation Licensing Exemption) Instrument 2016/1175; and
  • ASIC Credit (Concept Validation Licensing Exemption) Instrument 2016/1176

(the ASIC Sandbox instruments)

 Consultation

7.             ASIC has consulted with the Office of Best Practice Regulation (OBPR) to confirm that no Regulation Impact Statement (RIS) is required for repeal of the ASIC Sandbox instruments.

8.             No other consultation was undertaken in relation to the repeal of the ASIC Sandbox instruments since the ASIC Sandbox has been superseded by the ERS.

Operation of the instrument

9.             Section 4 provides that each instrument specific in a Schedule to the instrument is repealed at set out in the items in the Schedule.

Schedule 1 repeals:

  • ASIC Corporations (Concept Validation Licensing Exemption) Instrument 2016/1175; and
  • ASIC Credit (Concept Validation Licensing Exemption) Instrument 2016/1176

Legislative authority

10.         The Australian Securities and Investments Commission (ASIC) makes ASIC Corporations and Credit (Repeal) Instrument 2020/839 (the Repeal instrument) under paragraph 926A(2)(a) of the Corporations Act and paragraph 109(3)(a) of the National Credit Act.

11.         Paragraph 926A(2)(a) of the Corporations Act provides that ASIC may exempt a person or class of persons from all or specified provisions in Part 7.6 of the Corporations Act.

12.         Paragraph 109(3)(a) of the National Credit Act provides that ASIC may exempt a person or class of persons from all or specified provisions to which Part 2–6 of the National Credit Act applies.

13.         Under subsection 33(3) of the Acts Interpretation Act 1901 where an Act confers a power to make, grant or issue any instrument (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

 

Statement of Compatibility with Human Rights 

15. The Explanatory Statement for a disallowable legislative instrument must contain a Statement of Compatibility with Human Rights under subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011. A Statement of Compatibility with Human Rights is in the Attachment.

 


Attachment

Statement of Compatibility with Human Rights

 

This Statement of Compatibility with Human Rights is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.  

ASIC Corporations and Credit (Repeal) Instrument 2020/839

Overview

1. ASIC Corporations and Credit (Repeal) Instrument 2020/839 repeals ASIC Corporations (Concept Validation Licensing Exemption) Instrument 2016/1175 and ASIC Credit (Concept Validation Licensing Exemption) Instrument 2016/1176.

Assessment of human rights implications

2. This instrument does not engage any of the applicable rights or freedoms.

Conclusion

3. This instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview

The ASIC Corporations and Credit (Repeal) Instrument 2020/839 was enacted to repeal the previous regulatory exemptions that were provided under the ASIC Corporations (Concept Validation Licensing Exemption) Instrument 2016/1175 and ASIC Credit (Concept Validation Licensing Exemption) Instrument 2016/1176. These repeals were necessary as the Australian Securities and Investments Commission (ASIC) Sandbox, which allowed fintech businesses to test certain products and services without holding a licence under the Corporations Act 2001 or the National Consumer Credit Protection Act 2009, was superseded by the Government’s Enhanced Regulatory Sandbox (ERS) effective 1 September 2020. The purpose of the repealed instruments was to facilitate innovation in the financial services sector by reducing the regulatory burden on new businesses. The instrument was made under the authority of the Corporations Act and the National Credit Act, and ASIC consulted with the Office of Best Practice Regulation to confirm that no further consultation was required for the repeal.

Scope and Application

The ASIC Corporations and Credit (Repeal) Instrument 2020/839 pertains to the repeal of two previous regulatory instruments that established the ASIC Sandbox, specifically the ASIC Corporations (Concept Validation Licensing Exemption) Instrument 2016/1175 and the ASIC Credit (Concept Validation Licensing Exemption) Instrument 2016/1176. These repealed instruments had allowed fintech businesses to operate within a conditional relief framework without holding an Australian Financial Services (AFS) licence or an Australian Credit Licence (credit licence) under the Corporations Act 2001 and the National Consumer Credit Protection Act 2009, respectively. This relief was intended to facilitate innovation by reducing the regulatory burden on new businesses testing their products and services. Effective from 1 September 2020, these exemptions have been superseded by the Government’s Enhanced Regulatory Sandbox (ERS), which allows eligible entities to test a broader range of financial services and credit activities for up to 24 months. The repeal of these instruments is authorised under the Corporations Act and the National Credit Act, reflecting the transition from the ASIC Sandbox to the ERS.

Key Provisions

The ASIC Corporations and Credit (Repeal) Instrument 2020/839 (the Instrument) is designed to repeal the ASIC Corporations (Concept Validation Licensing Exemption) Instrument 2016/1175 and the ASIC Credit (Concept Validation Licensing Exemption) Instrument 2016/1176, which previously provided fintech businesses with a temporary exemption from certain licensing requirements under the Corporations Act 2001 and the National Consumer Credit Protection Act 2009. These repealed instruments were part of the ASIC Sandbox, a regulatory initiative intended to facilitate innovation by allowing fintech companies to test their products and services without holding a full Australian Financial Services (AFS) licence or Australian Credit Licence (credit licence). The repeal of these instruments (section 4) is effective as of the commencement of the Instrument, rendering the previous exemptions no longer applicable. The primary obligations and requirements imposed by the repealed instruments, which are now nullified by this Instrument, included strict conditions for eligibility and operation within the Sandbox, such as limits on the types of financial services that could be tested and the number of consumers that could be engaged. Furthermore, the businesses participating in the Sandbox were required to adhere to specific disclosure and reporting obligations to ASIC to ensure transparency and compliance with regulatory standards. These obligations were intended to protect consumers while still allowing for innovation and testing of new financial products and services. In terms of legal consequences, the Instrument itself does not introduce new offences or penalties but repeals the conditions under which certain activities could be conducted without a licence. The primary legal implications for entities previously participating in the Sandbox would be the requirement to transition to full compliance with the licensing provisions under the Corporations Act and the National Credit Act. Failure to obtain the appropriate licences or to cease the activities previously conducted under the Sandbox exemptions could result in civil or criminal penalties under those Acts. The penalties for unauthorised financial services or credit activities can include substantial fines and, in some cases, imprisonment for individuals responsible for the contraventions.

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Corporate Law & Governance
Technology Law
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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.