media release (12-148MR)

ASIC updates policy guidance on approach to cross-border financial regulation

Published

ASIC has today released updated policy guidance about its approach to facilitating cross-border financial regulation to assist foreign providers of financial facilities, services and products that wish to operate in Australia.

The updated guidance is covered in new versions of:

  • Regulatory Guide 54 Principles for cross-border financial regulation (RG 54)

  • Regulatory Guide 176 Foreign financial services providers (RG 176), and

  • Regulatory Guide 178 Foreign collective investment schemes (RG 178).

The new versions remove outdated references since the guides were last published and also include content refinements following feedback from respondents to the Joint Treasury/ASIC Consultation Paper 98 Cross-border recognition: Facilitating access to overseas markets and financial services (CP 98), and ongoing industry consultation.

‘ASIC takes a flexible and forward-looking approach to cross-border financial regulation, covering both unilateral and mutual recognition of other international regulatory regimes’, ASIC Commissioner John Price said.

‘We understand that recognition of overseas regulation of financial markets, financial products and services helps facilitate increased capital flows into and out of Australia and delivers economic benefits to Australian industry and investors.

‘Our updated policy guidance reflects ASIC’s support for more uniform regulatory approaches and strong supervisory and enforcement cooperation with our overseas counterpart regulators. It is intended to minimise regulatory duplication and remove impediments for our foreign regulated population where possible, while ensuring the interests of local markets and Australian investors are maintained’, he added.

ASIC has made class orders to vary existing class orders under RG 176 and RG 178, reflecting key changes to the guides. An additional class order has been made to revoke related class orders that are no longer applicable.

In addition, information sheets are now available about how to apply for relief under the guides.

More information about the updated regulatory guides, class orders and information sheets follows.

Regulatory guides

Regulatory Guide 54 Principles for cross-border financial regulation (RG 54) outlines ASIC’s overall approach to recognizing overseas regulatory regimes for the purpose of facilitating cross-border financial regulation.

While the core principles guiding ASIC’s policy and decision-making on whether to recognise an overseas regulatory regime remain unchanged, RG 54 now more clearly reflects a flexible recognition framework that includes both unilateral and mutual recognition and the conditions generally required before we will consider either type of recognition.

Regulatory Guide 176 Foreign financial services providers (RG 176) is for foreign financial service providers (FFSPs) that provide financial services in Australia to wholesale clients only. It provides guidance on when ASIC may exercise its discretion to exempt FFSPs from the requirement to hold an Australian financial services license.

Regulatory Guide 178 Foreign collective investment schemes (RG 178) is for operators of foreign collective investment schemes (FCISs) wishing to operate an FCIS in Australia. It explains when ASIC may grant conditional relief from registration, licensing and product disclosure requirements.

Both RG 176 and RG 178 have been updated to reflect the relevant changes in RG 54, remove outdated references, and introduce changes designed to help reduce the reporting burden on those with the benefit of relief while ensuring ASIC has timely access to important information about them. The changes mainly concern ASIC’s expectations around periodic reporting and the provision of assistance to ASIC.

A review of Regulatory Guide 177 Australian market licences: Overseas operators is currently under way to reflect ASIC’s approach to cross-border financial regulation.

Class orders

Class Order [CO 12/572] and Class Order [CO 12/573] implement the key changes to the RG 176 and RG 178 suite of class orders, respectively.

Class Order [CO 12/574] revokes related class orders that are no longer applicable.

These class orders will come into effect on the later of the date of their gazettal and registration on the Federal Register of Legislative Instruments (FRLI). FRLI can be accessed at www.frli.gov.au.

Information sheets

Information Sheet 157 Practical guidance for foreign financial service providers (INFO 157) has been developed to assist those wishing to apply for or rely on existing relief mechanisms under RG 176.

An updated version of Information Sheet 93 Practical guidance for operators of foreign collective investment schemes (INFO 93) is also now available.

Download: