Labor cautions ASIC cuts threaten Australian fintech sector

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Spokesman for the Digital Economy, Ed Husic, has slammed the Coalition’s budget cuts to the Australian Securities and Investments Commission, saying it would hamper the regulator’s ability to keep on top of technology-led disruption occurring in the financial services sector.

Mr Husic told The Australian Financial Review it would also likely slowdown the process of reforming crowdsourced equity funding laws to open it up to unlisted public companies, and mean that it would be ill-equipped to properly monitor initial coin offerings.

“At a time when the banking royal commission is exposing massive shortcomings in the way banks are behaving with customers, cutting budget of the watchdog is a big concern and there will be a broader public requirement of the government to justify how that fits in the climate,” he said.

“More broadly, in fintech it’s also taking too long to get reforms bedded down and you have to wonder what these budget cuts will do. Will this make it worse? I think it will.”

Minister for Jobs and Innovation Michaelia Cash did not respond to requests for comment on Mr Husic's criticism.
Minister for Jobs and Innovation Michaelia Cash did not respond to requests for comment on Mr Husic’s criticism. Alex Ellinghausen

“The worst thing we could do would be to put up road blocks,” he said.

“It’s important for Australia to be seen as a friendly destination for ICOs if we want to be seen as a serious fintech player, but we have to make sure we get the balance right.”

Crowdsourcing procrastination

Mr Husic also criticised the Coalition for not moving quicker to debate and implement the second phase of crowdsourced equity funding legislation, which will open up the funding type to unlisted public companies.

The reforms are yet to be passed by Parliament and had been expected to be debated this week, but have now been pushed back until June at the earliest.

Mr Husic said he was concerned that there could be further delays, thanks in part to the need to give ASIC time to prepare for the legal changes to the corporations act.

“It’s a joke. This was tabled in September,” he said.

“You can interpret from this that the government has prioritised other things above the fintech sector.”

Minister for Jobs and Innovation, Michaelia Cash, failed to respond to requests for comment about Mr Husic’s remarks.