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Friday 21 September 2018

18-278MR ASIC extends relief for foreign financial services providers

ASIC has extended to 30 September 2019 licensing relief for foreign financial services providers (FFSPs) to allow them to provide financial services to Australian wholesale clients without needing to hold an Australian financial services licence.

The licensing relief that is extended by ASIC is in the following instruments:

  • ASIC Corporations (Repeal and Transitional) Instrument 2016/396 and ASIC Corporations (CSSF-Regulated Financial Services Providers) Instrument 2016/1109.  FFSPs relying on this relief can provide specified financial services to Australian wholesale clients if their home regulatory regime has been assessed by ASIC as sufficiently equivalent to the Australian financial services licensing regime; and
  • ASIC Corporations (Foreign Financial Services Providers—Limited Connection) Instrument 2017/182. This provides licensing relief for FFSPs limited to inducing an Australian wholesale client to use the provider’s financial services.

These instruments had been due to expire in late September 2018.

Background

The extension of this relief is contained in ASIC Corporations (Amendment) Instrument 2018/807. We indicated in Consultation Paper 301 Foreign financial services providers (CP 301) we would extend the relief for an additional 12 months to allow us time to consult on proposals about the regulation of FFSPs: see also 18-162MR. We are reviewing the 36 submissions we received on our proposals in CP 301 to revoke the relief and introduce a modified licensing regime for FFSPs. We anticipate engaging over the next few months with industry participants about their responses to our proposals in CP 301.

ASIC released CP 301 on 1 June 2018 following a review of the regulatory settings for foreign financial services providers. The review identified some supervisory and regulatory concerns about the operation of the relief.

CP 301 also proposes a further transition period of 12 months to 30 September 2020 if ASIC proceeds with the modified licensing regime.

Submissions on CP 301 closed on 31 July 2018.

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Last updated: 24/09/2018 12:01