The Australian Securities and Investments Commission (ASIC) today released an information sheet on distributed ledger technology (DLT), also known as blockchain technology.
“Information Sheet 219: Evaluating distributed ledger technology” (INFO 219) sets out an assessment tool for evaluating DLT-based services comprised of six broad questions that ASIC is likely to ask when assessing whether the use of DLT by a service provider or infrastructure operator would allow the person to meet their regulatory obligations.
In the past few years, there had been intense interest in DLT from operators of financial market infrastructure, financial institutions, financial service providers and innovative fintech firms around the world, the corporate regulator said.
“We expect that the range of potential applications of DLT will grow exponentially over time,” ASIC said.
“This could have far-reaching implications for our stakeholders and affect the way these entities operate and the structure of the market in which they offer their services.
“Although DLT is still an emerging technology, we have given, and will continue to give, considerable thought to regulatory issues that may arise if you are using DLT for your business.
“This information sheet is designed to help you better understand the regulatory considerations we have identified.”
ASIC chairman Greg Medcraft said INFO 219 is for both existing licensees and start-ups.
“It will help fast-track our discussions with stakeholders and we want to use the framework as a conversation starter as the technology continues to evolve,” Medcraft said.
INFO 219 covers how DLT will be used, what DLT platform is being used, how the DLT is using data, how the DLT runs, how the DLT works under the law and how the DLT affects others.
In May last year, SuperAuditors director Shelley Banton told selfmanagedsuper that SMSFs would adopt blockchain technology before the rest of the market.
“I think there’ll be a transition period where switched-on SMSF trustees will take it up first [using the ASX blockchain platform, for example],” Banton said at the time.
“The real question is will advisers, accountants and fund managers be ready for it.
“We don’t know what the architecture will look like, so it’s difficult to say how much system restructuring will need to be done to accommodate blockchain transactions.
“I should imagine that there’s a lot of discussion going on behind SMSF administration doors as to how encrypted transactions that are identified by a public key need to make their way seamlessly into existing platforms.”
Commenting on blockchain’s effect on SMSF auditors, she said there was no doubt auditors would be seeing permissioned ledgers in the future if the SMSF trustee did not use a platform.