Foreign financial services providers who provide or seek to provide financial services to persons in Australia.
What do you need to do?Ensure foreign financial services providers check their licensing status before coming to Australia or offering financial products to persons in Australia.
Partner
T +61 2 9296 2478
Sydney
Jim Boynton
Damien Richard
Author
Mark McFarlane
ASIC continues to take regulatory action against foreign financial services providers - 5 August 2008
In recent weeks the Australian Securities and Investments Commission (ASIC) has written to certain offshore financial services providers threatening regulatory action for targeting Australian clients where those foreign providers do not hold an Australian financial services licence or rely on an appropriate exemption.
The Australian licensing regime regulates foreign financial service providers who provide or seek to provide financial services to persons in Australia. There is no exclusion from the licensing regime on the basis that services or products are only provided or offered to institutional or high net worth individuals.
Common types of financial services regulated by ASIC include asset management, the issue, acquisition disposing and offering of financial products (eg. shares, limited partner interests, bonds, notes, derivatives etc), issuing documents about financial products (eg. offering documents, confidential or private offering or placement memoranda, other marketing materials and research reports) and providing custody services.
The licensing regime covers hedge funds, private equity funds, mutual funds, notes, derivatives and applies to promoters and sponsors of such financial products. The licensing regime also covers asset managers, investment banks, broker-dealers and other persons who facilitate dealing in or provide advice about financial products.
Certain financial services provided by certain foreign persons who are regulated by a limited number of foreign regulators (passporting exemption) can apply for an exemption. To do so they must lodge certain documents with ASIC and ASIC must accept its application before they can provide financial services in reliance on the passporting exemption.
Implementing the passporting exemption is cost effective (around A$5,000) and quick (two to three weeks).
If relief is not available for a foreign provider of financial services under the passporting relief other exemptions might apply but specific advice should be sought.