ASIC consults on relief for FFSPs of funds management to Australian investors

The Australian Securities and Investments Commission (ASIC) has proposed to provide licensing relief for foreign financial services providers (FFSPs) of funds management services in Australia to professional investors.

The regulator said that, as a result of the responses to its earlier consultation paper, it was seeking feedback on the proposal to give ‘funds management’ relief to foreign financial services providers (FFSPs) providing ‘funds management financial services’ to professional investors in Australia, subject to a cap on the scale of those services.

ASIC’s further consultation would set out proposal to:

  • Provide funds management relief – under which foreign providers would be exempt from the requirement to hold an Australian Financial Services (AFS) licence to provide services to professional investors in Australia
  • repeal the licensing relief known as ‘limited connection’; relief as we previously proposed in the earlier consultation paper

The regulator said that its new proposal reflected earlier feedback from industry that there was a need for Australian professional investors to access funds management financial services outside Australia and that this proposal aimed to strike an appropriate balance between facilitating cross-border investment as well as maintaining Australian market integrity and investor protection.

“As a result of the responses to CP 301, we are now seeking feedback on our proposal to give ‘funds management’ relief to FFSPs providing ‘funds management financial services’ to professional investors in Australia, subject to a cap on the scale of those services. We are also repealing the limited connection relief,” ASIC said in the paper.

“We indicated that our policy objective was to strike an appropriate balance between cross-border financial services facilitation, market integrity and investor protection. Our proposals were based on the principles outlined in Regulatory Guide 54 Principles for cross-border financial regulation (RG 54).”

Also, the current limited connection relief was due to expire on 30 September, 2019 and was expected to be extended for a further six months until 31 March 2020.

ASIC issued in 20033 Class Order which provided licensing relief to foreign financial services providers with a limited connection to Australia providing services to wholesale clients.

Under the current proposal, the regulator would be looking to repeal the limited connection relief, it said.




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