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Australia: ASIC Releases Guidance for P2P lending market. The information sheet is an example of how regulators can help innovative start-ups understand the regulatory framework they are operating under.
The Australian Securities and Investments Commission (ASIC) today announced the release of an information sheet, containing guidance and best practices to be followed by Australian peer-to-peer lenders. The regulator revealed that a number of marketplace lending entities were consulted in preparing the document. The information sheet describes what peer-to-peer lending is and details the existing regulatory regime, as well as outlining examples of best practice. ASIC admitted it would review the guidance in light of any future changes in the law or business structures.

Good practice examples for lenders: 1) referring investors to the marketplace lending information available on the MoneySmart website; 2) providing investors with an appropriately designed risk warning statement; 3) providing investors with an optional 'knowledge test for investors' to assess their understanding of the product before they invest;

Note: Although the Australian peer-to-peer lending industry is not covered by banking rules, providers of marketplace lending products and related services generally need to hold an Australian financial services (AFS) licence as well as an Australian credit licence – if the loans made through the platform are consumer loans. In addition to the credit licence, consumer-lending platforms need to comply with requirements in the National Consumer Credit Protection Act 2009 ( and the National Credit Code. However, for all loans (including business loans) consumer protection provisions in the Australian Securities and Investments Commission Act 2001 apply, including prohibitions on misleading or deceptive investment representations.

ID: 48971
Publication date: 29/03/16

Created: 29/03/16. Last changed: 29/03/16.
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