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21-131MR ASIC extends transitional relief for foreign financial services providers following Federal Budget
ASIC is extending for 12 months – to 31 March 2023 – our transitional relief for foreign financial services providers (FFSPs) from the requirement to hold an Australian financial services (AFS) licence, pending the outcome of the Australian Government’s consultation about the regulation of FFSPs.
As part of the Federal Budget released on 11 May 2021, the Government announced that it will consult on options to:
- restore regulatory relief for FFSPs who are licensed and regulated in jurisdictions with comparable financial service rules and obligations, or have limited connection to Australia, from holding an AFS licence; and
- create a fast-track licensing process for FFSPs who wish to establish more permanent operations in Australia.
ASIC Corporations (Amendment) Instrument 2021/510 extends the relief contained in the following instruments:
- ASIC Corporations (Repeal and Transitional) Instrument 2016/396;
- ASIC Corporations (CSSF-Regulated Financial Services Providers) Instrument 2016/1109; and
- ASIC Corporations (Foreign Financial Services Providers—Limited Connection) Instrument 2017/182.
The three instruments currently apply to a range of FFSPs until 31 March 2022.
The instrument also delays the commencement of the ASIC Corporations (Foreign Financial Services Providers—Funds Management Financial Services) Instrument 2020/199 until 1 April 2023. Under that instrument ASIC gives licensing relief to some providers of funds management financial services to certain categories of Australian professional investors.
As Treasury will consult on proposals that affect licensing of FFSPs, ASIC has paused its assessment of licence applications lodged by FFSPs pending the outcome of the Government’s announced reforms, unless the applicant requests that we continue with the assessment of their application.
During this extended transitional period, ASIC will consider new applications for individual temporary licensing relief or new standard or foreign AFS licence applications from entities that cannot rely on the transitional relief.
FFSPs that have been or are granted a foreign AFS licence will be able to continue to operate their financial services business in Australia under the licence issued by ASIC pending any legislative changes arising from the Government’s consultation.