ASIC has released the final details of the new regime for foreign financial service providers providing financial services to Australian wholesale clients.
This week, ASIC released the final details of the new regime for foreign financial service providers (FFSPs) providing financial services to Australian wholesale clients. We will be undertaking a detailed review of the new regime. In the meantime, we have summarised the key points:
- ASIC has not extended the dates for the new regime, despite some recent speculation to that effect. The new regimes start on 31 March 2020 (i.e. in 21 days). It has retained the two year transition period for FFSPs relying on the current sufficient equivalence relief. The only change in timing is that it has also given a two year transition period for those relying on the current limited connection relief.
- ASIC has retained a version of the funds management relief. It is, however, a very different proposal, requiring those that rely on it to be regulated by an IOSCO signatory. There is also no revenue cap any more. This relief seems very broad now and will significantly limit the need for FFSPs to apply for a foreign Australian financial services licence.
- The limited connection relief will cease to be available for new FFSPs from 1 April 2020 and for existing FFSPs from 1 April 2022.
- ASIC has not provided any extension to the current reverse solicitation exemption.
- ASIC is implementing a foreign AFS licensing regime for FFSPs relying on the ‘sufficient equivalence’ licensing relief. It will be extended beyond the current regulators (which include the SEC, FCA, MAS, HKSFC, BaFin and Luxembourg CSSF) and also apply to the Danish FSA, Swedish FI, French AMF and ACPR and Ontario OSC.
- Although ASIC has modified the licensing regime so that certain obligations will not apply, a number will still apply including:
- Ensure financial services are provided efficiently, honestly and fairly
- Have adequate arrangements for the management of conflicts of interest
- Have adequate risk management systems
- Significant breach reporting.