As anticipated in our previous update, today Treasury released a consultation paper on options to restore previously well-established regulatory relief for Foreign Financial Services Providers (FFSPs), and options to create a fast-tracked licensing process for those that wish to establish a more permanent operation in Australia.
Stakeholder feedback is sought on the following three options for licensing relief:
- restore previous relief – this would involve either restoring the sufficient equivalence relief and limited connection relief as it applied before it was repealed on 31 March 2020; or restoring the sufficient equivalence relief but continuing with the funds management relief in place of the limited connection relief;
- FFSP relief for certain financial services provided to wholesale clients (this would only apply to FFSPs regulated by certain overseas regulatory authorities and would be subject to certain conditions); or
- FFSP relief for all financial services provided to wholesale clients (this would also only apply to FFSPs regulated by certain overseas regulatory authorities and would be subject to certain conditions).
In relation to the fast-tracking of the licensing process for FFSPs, the consultation is seeking feedback on the following options:
- streamlining the application of the current ‘fit and proper person’ test;
- implementing a modified licensing regime for FFSPs dealing with wholesale clients (this would only apply to FFSPs regulated by certain overseas regulatory authorities that are IOSCO signatories); or
- providing automatic licensing for FFSPs holding an existing equivalent overseas licence to provide financial services to wholesale clients.
The closing date for submissions on the consultation paper is 30 July 2021. A link to the Treasury website and a copy of the consultation paper can be found here.