The Treasury of the Australian Government issued a consultation paper 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.
Cutting the Red Tapes
The Aussie government first outlined its intentions to consider options to restore the previously ‘well-established’ regulatory relief for FFSPs in the 2021-2022 budget.
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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.
Last month, the Australian financial market regulator, known as ASIC, extended its temporary relief to all FFSPs operating in the country till March 31, 2023. This allows the companies to temporarily operate in the country without an Australian Financial Services (AFS) license.
“Since 2003, Australian Securities and Investments Commission (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“On 31 March 2020, ASIC repealed the sufficient equivalence relief and limited connection relief and replaced them with a foreign AFSL regime and a narrower funds management relief.”