The Australian Securities and Investments Commission (ASIC) today announced the release of a class order relieving certain wholesale foreign financial services providers, registered with the U.S. Commodity Futures Trading Commission (CFTC), from the requirement to hold an Australian financial services (AFS) licence.

The relief, provided under Class Order [CO 04/0829]: US CFTC regulated financial services providers, applies to futures commission merchants, introducing brokers, commodity pool operators and commodity trading advisors who are registered with the CFTC and who are members of the U.S. National Futures Association.

The relief took effect from 27 July 2004.

‘By granting this relief, ASIC recognises that the CFTC regulatory regime is sufficiently equivalent to our own. This relief means ASIC now recognises all the major federal United States financial regulators under ASIC Policy Statement 176: Licensing: Discretionary Powers – wholesale foreign financial services providers’ (PS 176), ASIC Director, Regulatory Policy, Mr Mark Adams, said.

This class order is substantially similar to the relief announced on 23 December 2003 for certain foreign financial services providers (FFSPs) regulated in the United Kingdom, Singapore and Hong Kong. For details of this relief and conditions (see ASIC Information Release 03/41: ASIC issues licensing relief for certain wholesale foreign financial services providers [IR 03/41]).

FFSPs registered with the CFTC may rely on this class order to provide financial services to wholesale clients in Australia if, as far as possible, they comply with the regulatory requirements that would apply to these services in their home jurisdiction and if they comply with the conditions to the relief.

These conditions are the same as those described in IR 03/41.

In addition, if the FFSP is a commodity pool operator or commodity trading advisor, it will need to notify ASIC on an annual basis, and more frequently if requested by ASIC, that it has adequate resources to provide the financial services it provides or intends to provide in this jurisdiction.

A copy of CO 04/0829, PS 176 and IR 03/41 can be obtained from the ASIC website at www.asic.gov.au, by calling ASIC’s Infoline on 1300 300 630 or emailing infoline@asic.gov.au.