ASIC consults on foreign financial services provider changes

ASIC is consulting on changes to the foreign financial services provider (FFSP) regime, which takes effect on 8 April 2027.

The extension of existing transitional relief for FFSPs by six months until 1 October 2027, and the provision of conditional class relief under the new professional investor exemptions are up for consultation.

The proposed conditional class relief would be limited to FFSPs with a related AFS licensee and cover financial services provided mainly offshore to institutional investors.

ASIC expects FFSPs relying on this relief to ensure activities in Australia are carried out efficiently, honestly and fairly, but it is seeking ideas on its proposed scope, conditions and practical operation.

ASIC also plans to publish regulatory guidance and provide an explanation of how providers can notify the regulator of the exemptions they intend to rely on under the new regime.

The proposed guidance explains the new regime, its statutory exemptions, eligibility criteria and conditions.

ASIC also wants conditional class relief for eligible FFSPs whose global operating models may fall outside the new professional investor exemption. Subject to conditions, the relief would allow individuals in Australia to support financial services principally provided offshore by an FFSP to Australian institutional investors.

Currently, FFSPs can obtain a licensing exemption for providing financial services from outside Australia to professional investors or by being regulated by comparable regulators and providing services to wholesale clients or making a market for certain derivatives traded on a prescribed licensed market. The exemptions are covered by the Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Act 2026 under Schedule 2.

ASIC said the proposals aim to give industry regulatory certainty and support a smooth transition to the new regime, which is designed to improve Australian professional and wholesale investors' access to global markets by exempting certain providers from holding an AFSL.

ASIC is taking feedback until December 4.

Treasury introduced changes to licensing exemptions for FFSPs in 2023 in a bid to better facilitate cross-border financial services while ensuring regulatory oversight.