International: ASIC extends transitional relief for foreign financial services providers

In brief

ASIC has extended the transitional relief period for foreign financial services providers (FFSPs) for a further 12 months to 31 March 2023.

This follows the Government announcing its intention, as part of the Federal Budget, to consult on options to retain relief for FFSPs that provide financial services to wholesale clients in Australia and either have limited connection to Australia, or are licensed in jurisdictions that have equivalent financial services regulations to Australia and have registered with ASIC.


Contents

In response to the Government's announcement, ASIC announced an extension to the transitional period for those exemption instruments for a further 12 months to 31 March 2023. ASIC's announcement can be found here. This extension effectively also pushes out the need to hold a foreign Australian financial services (FAFS) licence or meet the requirements for the offshore funds management relief.

The intention is to enable the Government to undertake further consultation on whether to restore the exemptions that were due to expire on 31 March 2022. As part of its consultation, the Government will also consider whether to create a fast-track licensing process for FFSPs that wish to establish more permanent operations in Australia.

ASIC states that it has stopped assessing FAFS licence applications lodged in anticipation of the new regime, pending the outcome of any reform, unless a request is made by an applicant to proceed. Licences that have been or will be granted under the FAFS regime can be relied on, subject to any legislative reform following consultation.

ASIC also states that it will consider applications for temporary relief for offshore providers that do not benefit from the transitional relief. This may be relevant to FFSPs that hold a foreign licence but wish to operate in Australia — for which the passporting foreign equivalence exemption may otherwise have been appropriate.

Next steps

FFSPs should review the extent to which they can continue to rely on the current exemption regime, including the temporary passporting relief, and/or whether the new FAFS licence regime offers extended flexibility for their offering in Australia, albeit subject to additional compliance standards.

If you need assistance in assessing the options that are available to you in light of these developments, please contact us.


© 2021 Baker & McKenzie. Ownership: This site (Site) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms, including Baker & McKenzie LLP). Use of this site does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All information on this Site is of general comment and for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulation and practice are subject to change. The information on this Site is not offered as legal or any other advice on any particular matter, whether it be legal, procedural or otherwise. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any information provided in this Site. Baker McKenzie, the editors and the contributing authors do not guarantee the accuracy of the contents and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the contents of this Site. Attorney Advertising: This Site may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Site may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. All rights reserved. The content of the this Site is protected under international copyright conventions. Reproduction of the content of this Site without express written authorization is strictly prohibited.