ASIC consults on guidance and relief for the new foreign financial services provider regime

As we have previously reported, Parliament passed the new FFSP regime in April 2026, replacing ASIC's existing relief framework with statutory licensing exemptions. CS 68 is ASIC's first detailed guidance on how that transition will work in practice. In summary, ASIC proposes to:

1. Publish regulatory guidance. An updated draft Regulatory Guide 176 explains the new statutory exemptions, their eligibility criteria and conditions, and the notifications FFSPs must give ASIC. The exemptions are:

• the professional investor exemption (services to professional investors from outside Australia);

• the comparable regulator exemption (services to wholesale clients by FFSPs authorised by a comparable regulator determined by the Minister, none of which has been prescribed by ASIC in CS 68); and

• the market maker exemption (making a market for derivatives on a prescribed licensed market, where no such markets have been prescribed by ASIC in CS 68).

2. Extend transitional relief by six months. ASIC's sufficient equivalence relief and limited connection relief are due to expire on 31 March 2027. Under the proposal, they would continue until 1 October 2027.

3. Provide conditional "institutional investor" class relief. This relief is for FFSPs with integrated global operating models. It would allow individuals in Australia to support a financial service that is principally provided offshore to Australian institutional investors. The relief would be available only where:

• the FFSP carries on its financial services business predominately from outside Australia, and the service (taken together with related services) is predominately provided from outside Australia;

• the FFSP has a related body corporate that holds an AFS licence covering the service and is responsible and liable for it;

• the service relates to an offshore financial product; and

• the FFSP ensures its activities under the relief are provided efficiently, honestly and fairly.

This institutional investor relief would expire after five years.

Key dates at a glance

What foreign fund managers need to know

• Funds management relief will be repealed. ASIC proposes to repeal its funds management relief instrument (2020/199) when the amendment instrument commences, as the professional investor exemption replaces it. Fund managers who had planned to rely on that relief should instead confirm they can meet the professional investor exemption from 8 April 2027.

• Marketing visits are limited under the professional investor exemption. Services must be provided from outside Australia, except during marketing visits of no more than 28 days per representative each financial year. Any day with client contact counts towards the cap, and ASIC suggests keeping records of visits. Fund managers should also consider whether their activities in Australia amount to "carrying on a business" here, which may require registration as a foreign company under the Corporations Act.

• You must notify ASIC of every exemption you rely on. Notice is due no earlier than 15 business days before, and no later than 15 business days after, you start relying on an exemption. ASIC will publish more information on its website about the process before the regime starts.

• Clients must be told. Under the professional investor or comparable regulator exemption, you must give each client written notice that you are exempt from holding an AFS licence and identify the exemption you rely on. The notice can be given electronically and only needs to be given once per client for each kind of service.

• Conduct standards may apply. If your financial services business is carried on predominantly in Australia, you must ensure services provided under any of the new exemptions are provided efficiently, honestly and fairly. ASIC will consider factors such as the proportion of Australian clients and revenue, and where your business operations are located. FFSPs relying on the institutional investor relief must meet this standard regardless of where their business is carried on.

• Foreign AFS licensees need to plan ahead. The new regime replaces the foreign AFS licensing regime, and ASIC proposes to repeal the foreign AFS licensee relief on 30 September 2027. This will not automatically cancel a foreign AFS licence. A licensee that keeps its licence while relying on a new exemption must still comply with the applicable AFS licence obligations.

What should you do now?

FFSPs should:

• confirm which exemption they will rely on from 8 April 2027;

• review their cross-border marketing practices;

• consider whether an AFSL is needed; and

• consider making a submission to ASIC by 4 December 2026.

Clayton Utz is advising a range of FFSPs on the practical implications of the new regime. Please don't hesitate to contact us if we can assist you.