ASIC Relaxes License Deadline for Foreign Financial Firms

The deadline for foreign firms needing an Australian financial services license has been extended by a year.

The Australian Securities and Investments Commission (ASIC) has relaxed its deadline for foreign financial services providers (FFSPs) in Australia to hold a financial services license in the country.

Originally, FFSPs needed to have an Australian financial services license secured by the end of this September if they wanted to continue to offer their services within the country. On Friday, however, ASIC announced that it has extended the deadline until September 30, 2019.

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However, the extended deadline does come with some conditions. FFSPs can only provide specified financial services in Australia if the regulation in their country of origin has been assessed and deemed adequate by ASIC. In particular, the regulation must be considered “sufficiently equivalent to the Australian financial services licensing regime.”

In Consultation Paper 301 the Australian regulator proposed a modified licensing regime for FFSPs. This would see the deadline extended even further until September 30, 2020. However, this would only come into effect if ASIC proceeds with the changes.

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ASIC Keeps a Close Eye on Digital Assets

While ASIC may be relaxing the deadline for FFSPs it is still keeping a watchful eye on cryptocurrencies, particularly in the form of scams. On Thursday, the watchdog revealed that it had taken action to stop numerous proposed initial coin offerings (ICOs) or token-generation events. The regulator also stopped the issue of a Product Disclosure Statement. This was for a crypto-asset managed investment scheme.

ASIC identified that the consistent problems of the above-mentioned products included the use of misleading, or even, deceptive marketing and sales materials and the lack of an Australian financial services license, among other issues.

John Price, ASIC commissioner
John Price
Source: LinkedIn

In Thursday’s statement, ASIC Commissioner John Price said: “If you raise money from the public, you have important legal obligations. It is the legal substance of your offer – not what it is called – that matters.

“You should not simply assume that using an ICO structure allows you to ignore key protections there for the investing public and you should always ensure disclosure about your offer is complete and accurate.”

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