In March 2020, the Australian Securities & Investments Commission
(ASIC) introduced changes to the Australian financial services (AFS)
licensing regime for FFSPs − the foreign fund managers, foreign investment
managers, foreign asset managers, offshore investment vehicles, foreign
banks and foreign brokers, who wish to conduct financial services
activities in Australia.
In Australia, an AFS licence is generally required to conduct a financial
services business. Under the new regime, the exemption previously available
to FFSPs operating under the 13 regulatory regimes similar to Australia’s
such as Hong Kong, United States, United Kingdom and Singapore, will no
longer apply and this cohort will need to be licensed from Australia from
31 March 2022.
Meanwhile, new FFSP entrants must now be authorised under an AFS licence to
conduct financial services in Australia.
Currently, there are four main pathways available for FFSPs who are seeking
to operate in Australia under the new regime which are outlined below.
1. Apply directly for a Foreign AFS licence.
2. Professional investors can seek an exemption under the new “Funds
Management Relief” provisions. These apply to FFSPs in limited and narrow
circumstances such as where the FFSP is only carrying on a financial
services business in Australia for engagement in “inducing conduct” in
relation to the provision of “funds management financial services”. This
pathway only extends to certain “professional investors” which are subject
to a narrow definition under the relief provisions.
3. Appointment as a Corporate Authorised Representative under an AFS
licence through an AFS licensee.
4. If the first three options above are not viable, the FFSP must hold a
standard full AFS licence. This will require the preparation and lodgement
of all documents required by ASIC and for the FFSP to then comply with all
of the obligations of an AFS licensee.
Further details on these changes are available on ASIC’s website or by
contacting
Polar 993
an Australian Financial Services Licence holder specialising in
Corporate Authorised Representative appointments for domestic and
offshore investment managers and trustee services for wholesale funds
and managed investment trusts.