The Financial Planning Association of Australia (FPA), an Australian financial planners’ association, wants a regulatory framework for crypto assets through exchanges–that is consistent with equivalent non-crypto versions.
In a submission to the Treasury, the FPA’s Head of Policy, Strategy, and Innovation, Ben Marshan, argued that “the regulation of a financial product or service should not depend on the technology which underlies the asset”.
The only available mechanism to provide protection currently lies with the secondary service provider layer.
The Australian Law Reform Council (ALRC) proposed tackling crypto regulation through a rule book-style framework that lays out a series of gradually updated compliance principles for local crypto firms to follow.
“It makes it a lot easier because instead of having to work your way through thousands of pages of the Corporations Act, people can go to a specific section and it’s much more efficient,” Marshan said.
Marshan wants to ensure consistency in order to reduce confusion among Australian investors and financial service providers.
“Firstly, it would create an alternate, duplicate regulatory regime to regulate what at the core is the purchase and holding of a financial asset to either retail or wholesale investors. Secondly, it would require existing financial service licensees to apply for and hold a separate type of license adding to cost and regulatory duplication.”
The association stated that there is a critical need for consumer protection not only from fraud and theft, but also from an education and portfolio construction standpoint.
The FPA also advocated for increased engagement between regulators and market participants, including non-traditional market players such as influencers, in order to distinguish between genuine players and those promoting scams.