FINTECH REGULATORY SANDBOXES IN AUSTRALIA AND MALAYSIA: A LEGAL ANALYSIS

Abstract

With the era of digitalization, regulatory sandboxes have been the trend adopted by most financial regulators around the world in regulating financial technology (fintech). Regulatory sandboxes act as a pilot programme to regulate fintech services and products with several legal exemptions given to the service providers within established parameters. In 2016, the Australian Securities and Investments Commission and the Malaysian Central Bank followed the United Kingdom’s Financial Conduct Authority (FCA) to introduce regulatory sandboxes within their legal framework. To date, previous literature has only provided a minimal analytical overview of the Malaysian and Australian regulatory sandbox. Hence, this article aims to fill that gap in literature. The methodology used for this study is both doctrinal and comparative legal analysis. The main objective of this study is to analyse the key characteristics of fintech regulatory sandboxes by comparing the Australian and Malaysian regulatory structures of these sandboxes. Due to nascent nature of Malaysian and Australian fintech regulations, this contributes to the growing knowledge in the financial regulation literature. Moreover, the findings on the operation of the regulatory sandboxes in both jurisdictions is expected to bring practical value for further research.