22 June, 2018
The Australian Securities and Investments Commission (ASIC) has released its proposals in relation to current exemptions for foreign financial service providers (FFSPs) providing financial services in Australia. ASIC proposes to repeal the existing exemptions for FFSPs (FFSP Exemptions) and require FFSPs to obtain a new ‘foreign financial services licence’ (Foreign FSL) to continue operating in Australia.
A Foreign FSL would only be available to FFSPs who provide services to wholesale clients and are regulated by a foreign regulatory regime which ASIC has determined is equivalent to the Australian regulatory regime. Foreign regulators previously assessed by ASIC do not need to be reassessed, e.g. the US SEC, the UK FCA, the Singapore MAS and the Hong Kong SFC.
Under the proposed new regime, an FFSP that holds a Foreign FSL will be exempt from certain laws in Australia regulating the provision of financial services and providers where ASIC considers their regulatory requirements to be equivalent to the Australian requirements. The FFSP will also still be subject to the existing requirements under the FFSP Exemptions to notify ASIC of significant changes to the FFSP’s foreign authorisation, significant exemptions and significant enforcement action.
ASIC is currently consulting with industry on the proposed new regime and proposes the following transitional arrangements for implementing the new regime:
- from 27 September 2018 to 30 September 2019, ASIC will extend the existing FFSP Exemptions;
- from 30 September 2019 to 30 September 2020, ASIC will implement a transitional period during which FFSPs can apply for a Foreign FSL; and
- from 1 October 2020, the Foreign FSL regime will begin.
FFSPs relying on an FFSP Exemption should monitor these developments and assess their Australian operations when the new regime is settled.
by Stuart Johnson and Tze Ting Liew of MinterEllison
For further information, please contact:
Scott Carnachan, Consultant, Deacons
scott.carnachan@deacons.com.hk
