The Australian Securities and Investments Commission has flagged changes to its innovation hub, announcing that it will issue a consultation paper on plans for a "regulatory sandbox" next month.ASIC set up an innovation hub last year to assist fintech start-ups navigate through the regulatory regime. It has also established a digital advisory committee to provide expert advice on the issue.The idea of a sandbox is to provide licensing exemptions and other regulatory flexibility for new business, allowing them to run tests and trials of their businesses before moving into full start-up mode.If the proposal proceeds ASIC would provide a six-month window for testing without the need for a licence. There would be restrictions on the products and services that would eligible.Sophisticated investors would be allowed to participate and companies could test their services on a limited number of customers. Customers would have monetary exposure limits.Consumer protection measures, such as membership of a dispute resolution scheme, would have to be in place but there would be modified conduct and disclosure obligations.In its first year of operation ASIC's innovation hub has participated in a range of other fintech initiatives, such as other hubs and fintech "meetups". It has worked with 80 entities, advising them on regulatory issues.It has put together an internal taskforce to work on new business models.