Further transitional relief for Foreign Financial Services providers
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On 7 August 2023, ASIC announced that it would extend the transitional period of relief for foreign financial services providers (FFSPs) by a further 12 months (under ASIC Corporations (Amendment) Instrument 2023/588). As a result, the current relief regime will now remain in place until 31 March 2025.
This extension is welcome news, allowing more time for FFSPs to appropriately prepare to comply with an updated regime once it is introduced. The extension will provide the Government time to consider feedback on its Exposure Draft released on 7 August 2023 which introduces the following instruments:
- Professional Investor Exemption – which provides an exemption from the requirement to hold an Australian financial services licence (AFSL) for persons who provide financial services from outside Australia to professional investors;
- Comparable Regulator Exemption – which provides an exemption from the requirement to hold an AFSL for persons regulated by comparable regulators and provide financial services to wholesale clients;
- Market Maker Exemption – which provides an exemption from the requirement to hold an AFSL for persons that provide financial services that involve making a market for derivatives that are able to be traded on a specified licenced market; and
- the Fit and Proper Person Test Exemption – which provides a fast-tracked licensing process for FFSPs applying for AFSLs to provide financial services to wholesale clients by providing an exemption from the fit and proper person tests for persons regulated by comparable regulators .
The consultation period for the Exposure Draft closes on 8 September 2023.
What does this extension mean for FFSPs?
Limited Connection Relief – FFSPs will now be able to rely on the Limited Connection Relief until 31 March 2025. This relief does not require an application to ASIC.
Sufficient Equivalence Relief – FFSPs who had the benefit of a Sufficient Equivalence Relief instrument as at 31 March 2020, will now be able to continue to rely on this until 31 March 2025, without needing to notify ASIC.
Individual Temporary Licensing Relief – ASIC will consider applications for Individual Temporary Licensing Relief from FFSPs who cannot rely on the transitional relief. FFSPs who currently rely on Individual Temporary Licensing Relief should check that the cessation date allows for the relief to continue to be relied on for the duration of the updated transitional period.
The Funds Management Relief – the commencement of this instrument is delayed until 1 April 2025.
The Foreign AFSL – ASIC will consider applications for Foreign AFSLs from FFSPs who cannot rely on the transitional relief. FFSPs that have been, or are granted a Foreign AFSL, can continue to operate their financial services business in Australia under the license granted by ASIC.
If you would like to discuss strategies to ensure compliance with the Australian licensing regime or require assistance with any application for relief or for an AFS licence, please contact us.
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