Aussie FPA Supports ‘Crypto Rulebook’ and Regulation of Exchanges

The Financial Planning Association of Australia (FPA) has shown support for the “crypto rulebook” idea and called for exchanges to be regulated instead of crypto assets.

In May, the Australian Law Reform Council (ALRC) proposed addressing crypto regulation through a rulebook-style framework that lays out a series of gradually updated compliance principles for local crypto businesses to adhere to.

The comments came via a presentation to the Treasury by the FPA’s head of policy, strategy and innovation, Ben Marshan, who also argued that regulation of crypto exchanges should be under the current financial services regime and not under a new separate legal framework.

“First, it would create an alternative and duplicative regulatory regime to regulate what is essentially the purchase and holding of a financial asset for retail or wholesale investors.”

“Second, it would require existing financial services licensees to apply for and maintain a separate license type, which increases costs and regulatory duplication,” he added.

Mashan also emphasized the need to implement stronger consumer protections for local Australian crypto users and highlighted that regulating secondary providers (crypto exchanges, brokers, etc.) is the best way to go.

“Regulation of a financial product or service should not depend on the technology behind the asset,” he said, adding that “it would be practically impossible to regulate the product because it is so decentralized that they are found in all kinds of foreign jurisdictions. .”

Focusing regulation on crypto service providers will remove a great deal of “complexity” from the equation given the rapidly evolving nature of blockchain technology and crypto, Mashan argued, adding that the ALRC’s crypto rulebook idea for that companies follow them “makes sense”.

“It makes it a lot easier because instead of having to wade through thousands of pages of Companies Law, people can go to a specific section, and it’s much more efficient.”

Speaking to Cointelegraph, Ryan Parsons, co-CEO of local crypto exchange Swyftx, echoed Mashan’s calls, noting that his firm wants “sensible measures to support consumer protection” enacted soon so Australia doesn’t take a chance. to stay behind. United States and European Union:

“Our preference is for crypto platforms to operate within the existing financial services licensing framework, albeit in a way that takes into account the unique characteristics of digital assets.”

“We believe this is the best way to reduce complexity and cost, as well as build confidence in cryptocurrencies as an asset class among Australian investors,” he added.

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Another key idea highlighted in the ALRC report was to introduce the Twin Peaks regulatory model, in which regulation is divided between one entity that has the task of supervising the maintenance of the stability of the financial system, while the other deals with the institutional market conduct and consumer protection.

The same model is used in Australia’s financial regulatory system, with the Australian Securities and Investments Commission (ASIC) in charge of good market conduct and consumer protection, while the Australian Prudential Regulation Authority (APRA) is responsible for the stability of the financial system.

Since the Liberal Party was emphatically ousted from government in May, the crypto regulatory landscape in Australia has become uncertain as the Labor Party appears to have another fish to fry.

As it stands, Labor has yet to provide any concrete initiatives, but has noted that the introduction of stronger consumer protections in crypto will be a key area of ​​focus.