Australia: Another update for the FFSP exemptions

05 Aug 2024    2 minute read

In brief

The Australian Securities and Investments Commission (ASIC) have again extended the transitional relief for foreign financial service providers (FFSPs). Notwithstanding this extension the new FFSP legislative exemptions are still expected to come into effect on 1 April 2025.

In late 2023, the Australian Government introduced legislation for four new FFSP exemptions under the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 ("Bill").

In May 2024, the Senate Economics Legislation Committee delivered its report on the Bill and recommended that it be passed into law.

Contents

Now, the Australian Securities and Investments Commission (ASIC) have issued the ASIC Corporations (Amendment) Instrument 2024/497 ("Amendment Instrument") and an explanatory statement ("Explanatory Statement"). The effect of the Amendment Instrument is that the transitional relief for FFSPs when providing financial services to wholesale clients under the limited connection relief or sufficient equivalence relief will be extended until 31 March 2026. After this date, FFSPs will be required to notify ASIC of their intention to rely on the new licensing exemption regime, unless they choose to opt in by notifying ASIC earlier.

Importantly, the Explanatory Statement indicates that:

  • The new licensing exemptions under the Bill are still expected to commence on 1 April 2025, subject to passage of the Bill through Parliament.
  • The Amendment Instrument delays the commencement of the ASIC Corporations (Foreign Financial Services Providers—Funds Management Financial Services) Instrument 2020/19 ("Funds Management Relief") until 1 April 2026. However, the Explanatory Statement notes that "subject to passage of the Bill, ASIC intends to repeal Instrument 2020/199 before it commences as its provisions will be superseded by the licensing relief under the Bill".
  • The extension of the relief is to "provide certainty for industry" and "this will also assist with the orderly introduction of the regime proposed in the Bill, both for industry and ASIC". Notably, this may indicate that there is likely to be a number of entities who will need to transition to the legislative relief (should it be passed into law) and so entities should consider getting on the front foot to avoid delays.

Which relief has been extended?

The ASIC Corporations (Amendment) Instrument 2024/497 extends the relief contained in the following instruments:

For those entities who cannot currently rely on the transitional relief, or otherwise require guidance on the FFSP regime, please do not hesitate to contact our team. We will continue to monitor the passage of the Bill.

Further information

For more details on the previous updates to the transitional relief for FFSPs, please refer to our articles listed below:

Contact Information
Alan Darwin
Partner
Sydney
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alan.darwin@bakermckenzie.com
Bill Fuggle
Partner
Sydney
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bill.fuggle@bakermckenzie.com
Trudi Procter
Partner
Brisbane
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trudi.procter@bakermckenzie.com
Shemira Jeevaratnam
Associate
Sydney
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shemira.jeevaratnam@bakermckenzie.com

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