The Australian Securities and Investments Commission (ASIC) has made the decision to prolong transitional relief for foreign financial services providers (FFSPs). Initially, it was set to lapse in March 2024. Currently, these entities have until 31 March 2025 before they are mandated to obtain an Australian financial services (AFS) license to conduct their transactions with the country's wholesale clients.

ASIC Extends Transitional Relief for FSSPs

The consideration of regulatory relief measures is underway, as FFSPs offer Australian investors a gateway to worldwide investment opportunities and introduce foreign investments to various sectors within the nation.

Implemented through the ‘ASIC Corporations (Amendment) Instrument 2023/588’, this move additionally postpones the activation of the ‘ASIC Corporations (Foreign Financial Services Providers — Funds Management Financial Services) Instrument 2020/199’ until 1 April 2025.

This specific instrument provides licensing relief for select FFSPs, allowing them to offer funds management financial services to distinct groups of Australian professional investors without the need for a local license.

ASIC is extending for a further 12 months the transitional relief for foreign financial services providers from the requirement to hold an Australian financial services licence when providing financial services to Australian wholesale clients https://t.co/TV5TQoQ8jK

— ASIC Media (@asicmedia) August 8, 2023

“During this extended transitional period, ASIC ASIC The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the Read this Term will consider new applications for individual temporary licensing relief, or new standard or foreign AFS license applications, from entities that cannot rely on the transitional relief,” ASCI commented.

This change means FFSPs that possess or are subsequently given a foreign AFS license can persist in managing their financial operations in Australia under the approval granted by ASIC.

This is not the first time ASIC has decided to take such a step, and the deadline has been pushed back for several years. It happened in 2021, then in 2022 and now in 2023. Earlier this year, ASIC presented draft reporting rules for foreign brokers who offer their services to Aussie clients. The new rules are expected to take effect in October 2024.

ASIC Reports $109 Million in Civil Penalties

At the beginning of August, the Australian regulator presented a report summarizing its activities for the first six months of 2023. ASIC's enforcement update highlighted over $109.1 million in civil penalties in the half-year up to June 30, 2023. During this period, 125 individuals were charged, 70 investigations were initiated, and another 144 investigations are currently ongoing.

"Promoting market integrity and addressing misconduct that places consumers and investors at risk are enduring priorities for ASIC," Sarah Court, the Deputy Chairwoman of ASIC, commented. "Our commitment to insider trading and market manipulation deterrence continues, and we expect further action for related misconduct in the coming months."

In addition to direct enforcement actions, ASIC published an update on its interventions against greenwashing, urging financial institutions to improve their anti-fraud strategies. In one of its latest enforcement actions, ASIC sued Vanguard Australia for allegedly misrepresenting the compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term of some of its investments with environmental, social, and corporate governance (ESG) standards.