media release

IR 04-04 Practical guidance for wholesale foreign financial services providers seeking licensing relief

Published

The Australian Securities and Investments Commission (ASIC) today issued some practical guidance for wholesale foreign financial services providers (FFSPs) that seek to rely on relief from the requirement to hold an Australian financial services (AFS) licence.

The relief, which is provided by a number of class orders issued in December 2003, was outlined in Information Release 03-41: ASIC issues licensing relief for certain wholesale foreign financial services providers.

These class orders were issued under ASIC Policy Statement 176: Licensing: Discretionary Powers – wholesale foreign financial services providers and apply to foreign financial services providers regulated by the Financial Services Authority in the United Kingdom, the Securities and Exchange Commission in the United States (US), the US Federal Reserve and Office of the Comptroller of Currency, the Monetary Authority of Singapore and the Hong Kong Securities and Futures Exchange.

The current information release provides some further guidance to FFSPs seeking to rely upon those class orders.

1. Where should notifications under the class orders be sent?

FFSPs are required to notify ASIC if they are relying upon a particular class order exemption and are also required to notify ASIC if there are any:

  • significant changes to their regulation by a foreign jurisdiction;
  • significant changes to the regulatory requirements of the foreign jurisdiction;
  • significant exemptions or other relief they obtain from the regulator in their foreign jurisdiction; and
  • any enforcement or disciplinary actions taken by the regulator in their foreign jurisdiction against them.

Each of these notifications should be sent in writing to: The Manager – Applications, Legal and Technical Operations, Financial Services Regulation, Level 18 No. 1 Martin Place Sydney 2000.

2. Where should the following documents required to be lodged with ASIC under the class order be sent?

FFSPs relying upon a particular class order exemption are required to provide ASIC with the following documents:

  • evidence of their authorisation, permission or registration from the relevant foreign jurisdiction;
  • a notice that they will be providing financial services in Australia in reliance upon the relevant class order;
  • their deed referred to in Section 2(c) of Schedule B of each of the class orders; and
  • their written consent required by Section 2(d) of Schedule B of each of the class orders. This refers to the FFSP consenting to the sharing of information about them between the regulator of the foreign jurisdiction and ASIC. There is no obligation to get a written consent from the relevant foreign regulator.

Each of the above documents should be sent to: The Manager – Applications, Legal and Technical Operations, Financial Services Regulation, Level 18 No. 1 Martin Place Sydney 2000.Documents lodged with ASIC should either be original or certified copies.

3. Is a fee payable in relation to reliance upon this licensing relief?

No fee is payable in order to rely upon these class orders, nor to make any notifications under a class order.

4. Is there an ASIC cover form to be included with notifications?

There is no ASIC cover form to be included with notifications. However, the front page of the notification should contain a reference to the class order that the FFSP is relying on.

5. Does ASIC require a particular form for the deed referred to in Section 2(c) of Schedule B of each of the class orders?

No, ASIC is not going to release a ‘form’ deed that must be completed by FFSPs seeking to rely upon the exemption afforded by class orders under PS 176, nor will ASIC approve forms of deeds or comment on the efficacy of particular deeds. ASIC is aware of industry plans to develop a standard version of the deed and ASIC encourages such efforts.

Any questions about the deed required by the class order should be raised with: The Manager – Applications, Legal and Technical Operations, Financial Services Regulation, Level 18 No. 1 Martin Place Sydney 2000.

6. What should an FFSP do if it breaches one of the requirements of the class order it is relying upon?

If an FFSP relying upon a class order under PS 176 becomes aware that it is in breach of one of the class order’s requirements, it should report the matter promptly to ASIC. Notification of these breaches should be sent to: The Manager – Applications, Legal and Technical Operations, Financial Services Regulation, Level 18 No. 1 Martin Place Sydney 2000.

ASIC encourages FFSPs relying upon these class orders to monitor compliance and report promptly, rather than leaving reporting to the end of the 10 business day period permitted in Section (e) of Schedule A. The less time before the expiration of the 10 business day period ASIC receives notice of a breach, the greater the risk the relief may expire due to insufficient time for ASIC to consider its response.

7. What minor amendments has ASIC made to the Class Orders?

ASIC issued today some minor amendments to the class orders issued under PS 176 to clarify the application of the class orders [CO 04/0100]. In brief, these amendments:

  • provide that either bodies corporate or partnerships formed in each of the relevant jurisdictions may rely upon the relief;
  • clarify that it is the FFSP, rather than the particular financial services, which is regulated by the foreign regulator; and
  • omit the requirement that FFSPs must disclose to their clients that any offer or other documentation provided in the course of providing financial services will be prepared in accordance with the foreign regulatory standards.

Copies of PS 176, information release [IR 03-41] and class orders [CO 03/1099], [CO 03/1100], [CO 03/1101], [CO 03/1102], [CO 03/1103] and [CO 04/0100] are available from the ASIC website at www.asic.gov.au.

End of release

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