The Enhanced Regulatory Sandbox (ERS) allows eligible individuals and businesses in Australia to test certain innovative financial services and credit activities without first obtaining an Australian Financial Services (AFS) licence or Australian credit licence. Introduced on 1 September 2020, the framework is designed to support financial innovation while maintaining regulatory safeguards and consumer protections.
Eligible Applicants and Activities
• Eligible applicants: natural persons and businesses seeking to test qualifying financial services or credit activities in Australia.
• Financial services: eligible activities may include certain payment services, financial product advice, dealing activities and other permitted financial services.
• Credit activities: eligible businesses may test specified credit products and services where the activity falls within the ERS rules.
• Innovation focus: applicants must be testing an innovative financial product, service or business model that meets the applicable eligibility conditions.
Testing Conditions and Obligations
• Testing period: eligible activities may be tested for up to 24 months.
• Licensing exemption: approved users may test eligible activities without first obtaining a full AFS licence or Australian credit licence.
• Conduct requirements: users must comply with specified conduct, disclosure and consumer protection obligations during the testing period.
• Regulatory conditions: participation is subject to activity limits, eligibility requirements and other conditions set out in the ERS framework and ASIC guidance.
• Guidance: applicants should review ASIC Information Sheet 248 for detailed eligibility criteria, permitted activities and exemption conditions.
Application Process and Support
• Pre-application support: businesses are encouraged to contact ASIC’s Innovation Hub before lodging an ERS notification.
• Application modality: the sandbox operates on a rolling basis rather than through fixed application rounds.
Current and Previous Sandbox Users
Current ERS users include businesses testing payment services, stablecoin and foreign exchange platforms, and AI-driven investment research tools.
Past participants have tested a range of financial technologies, including digital wallets, blockchain-based payment systems, buy-now-pay-later services, green lending products, investment platforms, Open Banking services and AI-powered stock analysis.
Examples of current users include Waratah Payments Pty Ltd, Canvas Digital Pty Ltd and ContraCapital Pty Ltd.
Program Duration and Availability
• Maximum testing duration: up to 24 months.
• Application window: rolling applications.
• Closing date: no fixed application deadline is currently specified.
• Geographic scope: Australia.
The Enhanced Regulatory Sandbox provides a structured pathway for eligible FinTech and financial services businesses to test innovative products and services in Australia without first obtaining a full financial services or credit licence. Applicants must meet ASIC’s eligibility requirements and comply with the regulatory, conduct and consumer protection conditions that apply throughout the testing period.