1.1. A FinTech Lab Participant (the participant) must meet the following minimum requirements before commencing business with Clients:

a) the participant must demonstrate evidence of the availability of the policies, procedures, arrangements, systems and controls required by AML;

b) the participant must make the mandatory appointments as required by GEN 2.1 and must appoint a Chief Information Technology Officer, who must be an individual responsible for the participant’s ongoing information technology (IT) operations, maintenance and security oversight to ensure that the participant’ IT systems are reliable and adequately protected from external attack or incident;

c) the participant must have a Client agreement that outlines the risk disclosure measures required by the participant’s licence issued by the AFSA;

d) the participant must comply with GEN 5.2 (Outsourcing);

e) the participant must provide to the AFSA a signed statement, certifying that the participant has adequate measures in place to ensure the following:

1. (i) that the participant’s IT systems are resilient and not prone to failure;
2. (ii) business continuity if a part of the IT system fails;
3. (iii) the protection of the IT systems from damage, tampering, misuse or unauthorised access;
4. (iv) the integrity of data forming part of, or being processed through, the IT systems;(v) real time monitoring and reporting on system performance, availability and integrity;
5. (vi) that policies and procedures for the IT systems are adequately established and maintained;
6. (vii) that the participant has sufficient resources to operate without disruption, maintain and supervise the participant’s IT facilities.

f) the participant must provide to the AFSA evidence of the availability of adequate funds to meet at least 12 months of operational expenses, as per the participant’ application to become a FinTech Lab Participant;

g) the participant must ensure that Client Money is held in a segregated Client Money Account with a third-party account provider that is a Bank or a Regulated Financial Institution that is authorised in any jurisdiction to Accept Deposits;

h) if the participant is providing Digital Asset transactions - the participant must have arrangements in place to ensure storage of Client funds on a Hot Digital wallet at most equivalent to 10 Bitcoin (further BTC) or 10% of all Client funds or assets, whichever is greater.

2.1.

The AFSA defines conditions for activities of the FinTech Lab Participants by setting standardised limits on size of funds, types of Clients permitted for the purpose of Testing FinTech Activities, which are determined based on the maturity of the FinTech firm, riskiness and type of activities.

2.2.

The AFSA does not impose any limits on the number of Clients, size of funds, types of Clients for Developing FinTech Activities given that they are performed by the firms authorised in foreign jurisdiction/-s.

2.3.

The maximum size of funds (per Client/Investor) up to which the Client Money Accounts are permitted to be deposited and/or refilled is reflected in the Table 1:

2.4

The maximum size of aggregated funds of Clients that a FinTech Lab Participant is permitted to hold without ensuring compensation arrangement (which can be, for instance, in the form of performance assurance or guarantee) at any given instance for the purpose of Testing the FinTech Activities is:

a) for Retail Clients and Investors:

1. (i) 200,000 (two hundred thousand) USD or equivalent Fiat Currency; or
2. (ii) 50 (fifty) BTC or equivalent Digital Asset.

b) for Professional Clients and Accredited Investors:

1. (i) 5,000,000 (five million) USD or equivalent Fiat Currency; or
2. (ii) 1,250 (one thousand and two hundred fifty) BTC or equivalent Digital Asset.

2.5.

If a FinTech Lab Participant has an adequate arrangement to compensate its Clients against losses or damages, the AFSA may consider increasing the values of maximum sizes of Retail Clients funds outlined in 2.3 and 2.4 above.

2.6.

The AFSA must be appointed as the trustee of a performance assurance or guarantee provided by a FinTech Lab Participant

2.7.

The AFSA Committee on Authorisation may, at any time, increase or reduce a limit under 2.3. and/or 2.4. for a particular FinTech Lab Participant, or a Person who is an applicant to become a FinTech Lab Participant, if satisfied that it is justified to do so

2.8

A FinTech Lab Participant may apply to the AFSA Committee on Authorisation for a limit applying to it under this 2.3. and/or 2.4. to be increased. Without limiting the grounds on which the participant may justify the application, the participant may justify the application on 1 or more of the following grounds:

i. successful performance of the authorised FinTech Activities during a period of 6 (six) months without any incident and with properly execution of the participant’s Testing/Developing plan;

ii. fulfillment of all requirements in relation to systems and controls and all legal and regulatory requirements;

iii. providing adequate arrangement to compensate its Clients against losses or damages in the case of default.

3.1.

The AFSA generally permits a FinTech Lab Participant to outsource any of the participant’s functions to a service provider (including a service provider within the participant’s Group). However, the FinTech Lab Participant remains responsible for compliance with the requirements of the Framework Regulations and the Rules.

3.2.

If the AFSA has difficulty in obtaining information from the FinTech Lab Participant about an outsourced function, the AFSA may limit the outsourcing of the function.

4.1.

FinTech Lab Participant shall appoint at least 2 (two) individuals who can carry out the functions of Approved Individuals and Designated Individuals and at the same time ensure that there is no conflict of interests in the carrying out of the functions.

Guidance

One Person may hold the positions of Senior Executive Officer and Finance Officer, and another Person may hold the positions of Compliance Officer and Money Laundering Reporting Officer

5.1.

A FinTech Lab Participant is allowed to receive and hold Client Money in corporate bank accounts of a Third-Party Account Provider, which is a Bank or a regulated financial institution which is authorised to accept Deposits or funds, subject to relevant segregation of funds in place