The Australian government has launched a consultation into proposals for relief for foreign financial service providers.
July 9, 2021, | AtoZ Markets – The Treasury of the Australian Government launched a consultation on Friday seeking feedback on its proposals for granting relief to foreign financial service providers (FFSPs).
The consultation is focused on two areas: licensing relief to FFSPs and options to fast-track the licensing process. The licensing relief can be extended to FFSPs that are similarly licensed and regulated in other jurisdictions that want to enter the Australian market and the FFSPs not based in Australia that provide financial services to their Australian clients.
“This consultation will also inform the Government on the regulatory, financial, business, and community impacts of each policy option being canvassed in this paper. This will assist the Government to better assess the costs and benefits of each option before making a final decision on the form of FFSP relief to be provided and how best to fast-track the licensing process,” the consultation paper titled ‘Relief to Foreign Financial Service Providers’ stated.
Australian government consult on options to restore regulatory relief for FFSPs
It is worthy of note that the Australian government first announced its intentions in the 2021-2022 budget to consider options to restore the previously well-established regulatory relief for FFSPs.
The regulatory relief measures are being considered as FFSPs provide Australian investors with access to global investment opportunities and bring overseas investments to several industries in the country.
As AtoZMarkets reported last month, Australian Securities and Investments Commission (ASIC) extended its temporary relief to all FFSPs operating in the country for 12 months, that is, until 31 March 2023. This allows the companies to temporarily operate in the country without an Australian Financial Services (AFS) license.
“Since 2003, ASIC provided two types of licensing relief to FFSPs in the form of ‘sufficient equivalence relief’ and ‘limited connection’ relief for the provision of financial services to wholesale clients,” the consultation paper added.
“On 31 March 2020, ASIC repealed the sufficient equivalence relief and limited connection relief and replaced them with a foreign AFSL regime and a narrower funds management relief.”
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