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.
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.