On 2 August 2022, ASIC announced that it would extend the transitional period of relief for foreign financial services providers (FFSPs) by a further 12 months (under ASIC Corporations (Amendment) Instrument 2022/623). As a result, the current relief regime will now remain in place until 31 March 2024.
Given that it remains unclear what the government intends to introduce at the end of the transitional period, this extension is welcomed news, allowing more time for FFSPs to appropriately prepare to comply with an updated regime once it is introduced.
What does this extension mean for you?
- Limited Connection Relief – FFSPs will now be able to rely on the Limited Connection Relief until 31 March 2024. This relief does not require an application to ASIC.
- Sufficient Equivalence Relief – FFSPs who had the benefit of a Sufficient Equivalence Relief instrument as at 31 March 2020, will now be able to continue to rely on this until 31 March 2024, without needing to notify ASIC.
- Individual Temporary Licensing Relief – ASIC will consider applications for Individual Temporary Licensing Relief from FFSPs who cannot rely on the transitional relief. FFSPs who currently rely on Individual Temporary Licensing Relief should check that the cessation date allows for the relief to continue to be relied on for the duration of the updated transitional period.
- The Funds Management Relief – the commencement of this instrument is delayed until 1 April 2024.
- The Foreign AFSL – ASIC will consider applications for Foreign AFSLs from FFSPs who cannot rely on the transitional relief. FFSPs that have been, or are granted a Foreign AFSL, can continue to operate their financial services business in Australia under the license granted by ASIC.
Sufficient Equivalence Relief
This refers to the following relief instruments:
- [CO 03/1099] UK regulated financial service providers;
- [CO 03/1100] [CO 03/1100] US SEC regulated financial service providers;
- [CO 03/1101] US Federal Reserve and OCC regulated financial service providers;
- [CO 03/1102] Singapore MAS regulated financial service providers;
- [CO 03/1103] Hong Kong SFC regulated financial service providers;
- [CO 04/829] US CFTC regulated entities;
- [CO 04/1313] German BaFin regulated financial service providers; and
- ASIC Corporations (CSSF-Regulated Financial Services Providers) Instrument 2016/1109
Limited Connection Relief
This refers to the ASIC Corporations (Foreign Financial Service Providers – Limited Connection) Instrument 2017/182,
Funds Management Relief
This refers to the ASIC Corporations (Foreign Financial Services Provider s– Funds Management Financial Services) Instrument 2020/199. The Funds Management Relief instrument provides an exemption from the requirement to hold an AFSL where an entity provides funds management services offshore to a subset of Australian Professional Investors known as “Eligible Australian Users”.
This refers to the ASIC Corporations (Foreign Financial Services Providers—Foreign AFS Licensees) Instrument 2020/198. Foreign AFSL refers to a modified AFSL which eligible FFSPs, who are authorised to provide financial services under a “sufficiently equivalent” overseas regulatory regime can apply for. A Foreign AFSL would only permit FFSPs to provide financial services to wholesale clients only.