On 10 September 2019, the Australian Securities & Investments Commission (ASIC) issued an announcement extending the “passport” class order relief and “limited connection” relief for foreign financial services providers (FFSPs) to 31 March 2020. FFSPs relying on passport or limited connection relief can continue to provide certain financial services in Australia to wholesale clients without needing to hold an Australian financial services licence (AFSL) until 31 March 2020.
At the end of 2018, ASIC announced that it will be proceeding with the proposal to repeal passport relief and limited connection relief for FFSPs and will implement a new regime which will require FFSPs to apply for a foreign AFSL. ASIC initially stated that passport relief and limited connection relief would cease from 30 September 2019, to allow sufficient time to review the consultation submissions and engage further with industry participants. You can read our previous insight here.
ASIC Corporations (Amendment) Instrument 2019/202 extends the licensing relief in the following instruments:
- ASIC Corporations (Repeal and Transitional) Instrument 2016/396 and ASIC Corporations (CSSF-Regulated Financial Services Providers) Instrument 2016/1109, which relate to FFSPs providing financial services on the basis that their home regulatory regime has been assessed by ASIC as having a licensing regime that is sufficiently equivalent to Australia’s regime; and
- ASIC Corporations (Foreign Financial Services Providers—Limited Connection) Instrument 2017/182, which relates to FFSPs providing financial services that are limited to inducing wholesale clients to use the provider’s financial services.
Passport relief and limited connection relief will cease from 31 March 2020.
FFSPs relying on passport relief will have 24 months (until 31 March 2022) to transition to a foreign AFSL or satisfy licensing requirements in some other way. FFSPs relying on limited connection relief will have until 30 September 2020 to transition to a foreign AFSL or satisfy licensing requirements in some other way.
In July 2019, ASIC republished Regulatory Guide 176 for FFSPs applying for a foreign AFSL which you can read here.