On 10 March 2020, ASIC published its media release announcing the new regulatory framework for foreign financial services providers (FFSPs) providing financial services to wholesale clients in Australia.
Existing licensing relief has been extended as follows:
- ASIC has provided a 2 year transition period until 31 March 2022 for FFSPs relying on the sufficient equivalence relief on 31 March 2020; and
- the limited connection relief, which was due to expire on 31 March 2020 (with a 6 month transition), has been extended until 31 March 2022 in order to provide longer transitional relief to FFSPs.
As set out in our previous update, the new framework replaces ASIC’s previous licensing exemptions for foreign providers and introduces two new regimes:
- a new foreign Australian financial services (AFS) licensing regime for FFSPs; and
- a new funds management relief allowing FFSPs to induce certain types of professional investors.
The foreign AFS licensing regime commences on 1 April 2020 and allows certain FFSPs that operate in sufficiently equivalent regimes to obtain a new foreign AFS licence.
The funds management relief will be available to foreign providers from 1 April 2022. While this type of relief is not a licence, FFSPs must notify ASIC if they wish to rely on the funds management relief.
We intend to provide you with a more detailed analysis of the updated FFSP regime in due course.
IBOR reform or LIBOR replacement represents one of the biggest changes to the financial services industry and impacts on all businesses that deal with it.