ASIC’s new framework has two key elements: a new Australian financial services (AFS) licensing regime for FFSPs and licensing relief for providers of funds management financial services seeking to induce some types of professional investors.
It is set to replace ASIC’s previous licensing exemptions for foreign providers, with there being a two-year transition period to the new regime for FFSPs relying on pre-existing relief.
The previous scheme, which has been in place since 2003, has seen the regulator provide two types of licensing relief to foreign providers of financial services to wholesale clients in Australia: sufficient equivalence relief and limited connection relief.
From 1 April, new foreign providers will be able to apply to obtain a foreign AFS license to provide services in Australia to wholesale clients.
To be eligible, the foreign provider will have to be authorised under an overseas regulatory regime that ASIC has assessed as sufficiently equivalent to the Australian regulation framework.
With the license, an FFSP would be exempt from certain obligations for other AFS licensees, such as financial requirements. ASIC said similar regulatory supervision and outcomes would be achieved by overseas requirements.
The funds management licensing relief will also commence from April, available to foreign providers inducing certain types of Australian professional investors to use its funds managements services.
Inducing conduct has been defined to include attempts to persuade, influence or encourage a particular person to become a client, for example, mass marketing campaigns.
ASIC commissioner Cathie Armour said the regulator’s ability to effectively supervise participants in Australian markets is crucial for investor confidence.
“Our new regulatory framework facilitates Australian wholesale access to foreign investment opportunities, preserves market integrity against misconduct in wholesale markets, and strengthens ASIC’s ability to take effective regulatory and supervisory action,” Ms Armour said.
Sarah Simpkins
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
