Australian regulatory options for financial service providers

Australian regulatory options for financial service providers

As many global financial services organizations know, the Australian Securities and Investments Commission (ASIC) finalized in 2020 its regulatory guidance for Foreign Financial Services Providers (FFSPs) for the transition to the new regime. Australian license which will begin on March 31, 2022. The new license The scheme is being introduced to replace the Class Order license exemptions that ASIC has granted over the past 15 years to many FFSPs allowing the provision of investment management services to Australian wholesale and institutional investors.

FFSPs will have three fundamental regulatory options available to them if they wish to continue providing financial services to Australian wholesale and institutional investors after March 2022:

Each of these options is discussed below.

APPLICATION FOR A FOREIGN AUSTRALIAN FINANCIAL SERVICES (AFSL) LICENSE

A foreign AFSL will allow a FFSP to conduct the same investment management activities in Australia as in its home jurisdiction. This may include marketing their products offshore to Australian investors and providing portfolio management services. via an investment management agreement.

The ASIC guidelines for FFSPs wishing to obtain an AFSL were contained in Instrument 2020/198 (Foreign AFS Licensees Instrument) of ASIC companies (Foreign Financial Service Providers – Foreign AFS Licensees).

This instrument defines the key processes that are relevant to the request and the current obligations…

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