[Open – closing date: 08 September 2023] Licensing exemptions for foreign financial services providers

The Australian Government is seeking input from stakeholders on proposed legislation regarding licensing exemptions for FFSPs. The exposure draft legislation outlines four key exemptions:
1. Comparable Regulator Exemption: This exemption allows FFSPs regulated by comparable foreign regulators to provide financial services to wholesale clients in Australia without the need to hold an Australian financial services license.
2. Professional Investor Exemption: FFSPs operating from outside Australia can offer financial services to professional investors within Australia without requiring an Australian financial services license.
3. Market Maker Exemption: FFSPs involved in making markets for tradable derivatives on specified licensed markets are exempted from the requirement to hold an Australian financial services license.
4. Fit and Proper Person Test Exemption: To expedite the licensing process for FFSPs seeking to establish permanent operations in Australia, those regulated by comparable foreign regulators are exempted from the fit and proper person assessment when applying for an Australian financial services license to serve wholesale clients.
As a reminder, foreign financial services providers encompass a wide range of financial activities, such as banking, wealth management, investment funding, market making, and financial advisory services. Their presence in the Australian market promotes competition and provides Australian investors access to global investment opportunities. Additionally, FFSPs play a crucial role in diversifying investment options for Australia’s superannuation industry, contributing to the management of retirement savings.
The objective of these amendments to the Corporations Act is to facilitate cross-border financial services while ensuring regulatory oversight of FFSPs in Australian financial markets. These exemptions aim to streamline regulatory requirements for FFSPs, making it easier for them to operate in Australia.
Interested parties have the opportunity to provide feedback on this consultation until 8 September 2023. This legislative proposal reflects the government’s efforts to strike a balance between facilitating international financial services and maintaining regulatory oversight in the Australian financial market.