Fintech start-ups will be allowed to operate for six months without a licence under one of several proposals to make the financial sector more innovative.

The Australian Securities and Investments Commission (ASIC) released a consultation paper last week after its research arm identified two key barriers to innovation – speed to market and meeting the organisational competence requirements of a licence.

Commissioner John Price says the proposed licensing exemption “compares favourably to measures in other jurisdictions because it will allow some fintech businesses to commence testing of certain product offerings in the absence of detailed assessment by the regulator”.

Other proposals include ASIC being more transparent in how it assesses licensee applications, and modifying the regulator’s policy to allow limited-in-scale, heavily automated businesses to rely on compliance sign-off from a professional third party.

“We believe the measures proposed… will help to lower barriers to entry faced by fintech start-ups, by providing cost reductions and promoting efficiency in the provision of financial services while maintaining the fundamental principles of the regulatory and licensing framework,” Mr Price said.

Click here to see the proposed changes. The closing date for submissions is July 22.