New Australian Licensing Requirements for Foreign Financial Service Providers managing funds on behalf of Australian Wholesale Investors

The rules are changing

The Australian Securities & Investments Commission (ASIC) recently announced changes to licensing requirements affecting Foreign Financial Services Providers (FFSPs).

The changes mean many FFSPs will need to obtain a Foreign Australian Financial Service Licence (FAFSL) in order to continue operating.

Fund managers operating Non-Australian funds with FUM from domestic Australian Wholesale Investors will be required to obtain an FAFSL.

FFSPs have previously relied on exemptions including ‘passport’ or ‘limited connections’ to provide relief from the requirement to hold an Australian Financial Services Licence (AFSL) in Australia. These exemptions have been repealed and Non-Domestic funds will now need to take one of the following actions:

Return funds to Australian Wholesale investors, or
Apply for and maintain a valid Foreign Australian Financial Services Licence, or
Establish a relationship with a domestic Australian Financial Services Licensee.

What’s changing?

FFSPs operating under relief exemptions will be required to obtain an FAFSL in order to continue providing services to Australian wholesale clients.

What’s the impact?

Australia remains the world’s 4th largest pension market with nearly $2 trillion FUM*. ASIC’s changes commence from 31 March 2020 with the first round of exemption expires.

Next Steps?

Certain exemptions and transitional periods may apply. Stay informed and explore your options. A domestic based Licensee such as Boutique Capital can offer assistance.

Boutique Capital specialises in providing tailored advice to managers, including simple, turnkey licensing and compliance solutions.