ASIC has released Consultation Paper 315 Foreign financial services providers: Further consultation (CP 315) which proposes to provide licensing relief for foreign financial services providers of funds management services in Australia to professional investors in conjunction with its new foreign AFS licensing regime. Background.

CP 315 sets out ASIC’s proposal to:

• Provide funds management relief – foreign providers will be exempt from the requirement to hold an Australian Financial Services (AFS) licence to provide services to professional investors in Australia. ASIC proposes a cap on the scale of activities that may be undertaken in Australia; and
• Repeal the licensing relief known as ‘limited connection’ relief as it previously proposed in Consultation Paper 301 Foreign financial services providers (CP 301). Foreign financial services providers may still access the proposed new funds management relief and the licensing exemptions in the Corporations Act 2001 and Corporations Regulations 2001.

The current ‘limited connection’ relief is due to expire on 30 September 2019. ASIC will extend the relief for a further six months until 31 March 2020 while it consults with stakeholders on the funds management relief and repeal of the ‘limited connection’ relief. ASIC proposes a transition period of six months to 30 September 2020 should it proceed with the repeal of the ‘limited connection’ relief, enabling foreign providers to seek an AFS licence if applicable.

ASIC will be implementing the foreign AFS licensing regime for foreign financial services providers relying on the licensing relief known as ‘sufficient equivalence’ relief.

The new foreign AFS licensing regime will commence on 1 April 2020. Foreign providers currently relying on the sufficient equivalence relief will have a transition period of 24 months from 1 April 2020 to comply with the new regime, including for example to submit an application for a foreign AFS licence and have the application assessed by ASIC.