This article was co-authored with Joel McKay.
ASIC has announced it is extending the transitional relief for foreign financial services providers (FFSPs) from the requirement to hold an Australian financial service licence (AFSL) to 31 March 2024. These transitional arrangements for the sufficient equivalence relief and limited connection relief were due to expire on 31 March 2023. ASIC has also delayed the commencement of the funds management relief until 1 April 2024. See here for ASIC’s media release.
This further extension comes as the industry awaits the enactment of a new regime of AFSL exemptions for FFSPs. The Treasury Laws Amendment (Streamlining and Improving Economic Outcomes for Australians) Bill 2022 (Bill), was introduced into Parliament in February this year but lapsed due to the Federal election. This Bill included the detail on the new regime, which was designed to strike a balance between removing barriers to entry to the Australian market for FFSPs, whilst maintaining adequate regulatory oversight. For an in-depth overview of what was proposed under the Bill, please see our article here.
Pending the introduction of the new FFSP regime, ASIC has confirmed that it will consider new applications for individual temporary licensing relief, or new standard or foreign AFSL applications, from entities that cannot rely on the transitional relief. In addition, FFSPs who have been issued a foreign AFSL can continue to rely on it to provide financial services. For FFSPs looking to enter the market now and who do not have the benefit of the transitional relief arrangements, it will be important to consider their options, to ensure they remain compliant but that market opportunities are not missed.