The Australian Securities and Investments Commission (ASIC) today announced a conditional exemption for securitisation special purpose companies and trustees from the requirement to obtain an Australian financial services (AFS) licence.

The exemption applies to dealing in and providing custodial services in relation to financial products as part of securitisation transactions.

‘The relief from the licensing provisions is based on our understanding that, where securitisation entities are established for the limited purpose of securitising a particular sponsor’s assets, it would be disproportionately burdensome to require them to hold an AFS licence’, ASIC Director of Regulatory Policy, Mr Mark Adams, said.

The relief was issued after consultation with participants in the securitisation industry, industry groups and the Australian Prudential Regulatory Authority (APRA). This included the issue of a public Consultation Paper in August 2004.

‘In framing the requirements for AFS licensing relief, we have sought to accommodate those participants in the securitisation industry, taking into account the prudential standards imposed by APRA. The market integrity objectives of the Corporations Act are achieved under this exemption where the special purpose securitisation entity only deals in financial products, either on the advice of an AFS licensee or under the supervision of an AFS licensee,’ Mr Adams said.

Class Order [CO 04/1526]: Securitisation special purpose vehicles has been issued to give the relief announced today, effective from 1 July 2005. To ensure that there is adequate time for industry to comply with the AFS licensing requirements of the Corporations Act or ASIC’s exemption under [CO 04/1526], ASIC has provided a further transitional period until 30 June 2005. ASIC has extended the interim relief under Class Order [CO 03/1098] Securitisation special purpose vehicles and securitisation managers.

ASIC has also issued amendments to Policy Statement 167 Licensing: Discretionary powers and transition [PS 167], reflecting the ongoing relief for special purpose securitisation entities. These amendments will also be included in an updated version of PS 167, likely to be issued early in 2005.

A copy of [CO 04/1526] and [CO 03/1098] is available on ASIC's website at www.asic.gov.au, or by calling ASIC’s Infoline on1300 300 630. A copy of the amendments to [PS 167] are available from www.asic.gov.au/fsrrelief.

End of release

Download a copy of:

• Class Order [CO 04/1526] Securitisation special purpose vehicles
• Class Order [CO 03/1098] Securitisation special purpose vehicles and securitisation manager