Unexpected backflip on new licensing regime for foreign financial services providers
Corporate News - 21 May 2021
In a surprising turn of events, as part of its Federal Budget announcement, the Federal Government has promised to consult on options to “restore previously well-established regulatory relief for foreign financial service providers”. This backflip comes only months after the Australian Securities and Investments Commission (ASIC) had finalised a new licensing regime due to commence on 31 March 2022 – as discussed in our earlier March article.
ASIC’s new regime may now not go ahead as the Government proposes:
- the establishment of a ‘more efficient’ licensing regime for foreign financial service providers (FFSPs);
- to consult on options to restore previously well-established regulatory relief for FFSPs who are licensed and regulated in jurisdictions with comparable financial service rules and obligations (‘sufficient equivalence or passport relief’), or have limited connection to Australia (‘limited connection relief’), and that deal with wholesale clients and professional investors, from holding an Australian financial service license, in order to reduce duplicate regulatory requirements; and
- to consult on options to create a “fast-track” licensing process for FFSPs who wish to establish more permanent operations in Australian.
Whilst these changes are welcome, ASIC has not yet commented and time is running short for FFSPs to determine their course of action in the Australian market.
Please contact us in our Perth office on +61 8 9321 4000 or our Melbourne office on +61 3 9111 9400 if you have any questions on financial services licensing.