Announcement date
17 February 2022
Link to announcement
https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r6857
Problem being addressed
A person who carries on a financial services business in Australia must hold an Australian Financial Services Licence (AFSL) unless an exemption applies. Since 2003, licensing relief has been provided to Foreign Financial Service Providers (FFSPs) servicing wholesale clients where the FFSP is already regulated by a sufficiently equivalent regulatory regime or has only a limited connection to Australia. With effect from 31 March 2020, the Australian Securities and Investment Commission (ASIC) repealed and replaced this relief with two new forms of relief: the 'foreign AFSL regime' and 'funds management relief'. While the introduction of a 'foreign AFSL' removed some regulatory duplication, some regulatory and process duplication remained, thereby making it difficult and costly for FFSPs seeking to be licensed in Australia.
Proposal
Introduce legislation to enact new relief that will establish:
- the comparable regulator exemption, which exempts FFSPs from the requirement to hold an AFSL where they are regulated by a regulator of a comparable regulator regime;
- the professional investor exemption, which allows FFSPs, located in any jurisdiction, to offer all financial services from outside Australia to professional investors; and
- the fit-and-proper person assessment exemption, which exempts FFSPs from fit-and-proper assessments when applying for an AFSL to provide services to wholesale clients
Assessed RIS outcome
Adequate
Regulatory burden
The Department of the Treasury estimates that this measure will result in an expected regulatory saving of $19.2 million per annum, on average, over 10 years.