ASIC RG 258: Foreign Financial Services Provider Licensing and Relief

FFSP regime overview

Foreign financial services providers (FFSPs) offering financial services to Australian clients from outside Australia must generally hold an Australian Financial Services Licence (AFSL). An exception to this requirement exists where a provider qualifies for relief.

ASIC Regulatory Guide 258 'Foreign financial services providers' details ASIC’s approach to FFSP licensing and relief. The current FFSP framework provides options including a foreign AFS licence, available to providers from jurisdictions with comparable regulatory regimes, and a funds management financial services licence option.

Recent reforms, introduced by the Treasury Laws Amendment (Better Targeted Tax Concessions) Act 2024, have refined the FFSP framework, particularly for fund managers servicing wholesale Australian clients. The original intention of the FFSP framework was to balance facilitating access to Australian markets with ensuring appropriate regulatory oversight.

Foreign AFS licence regime

A foreign AFS licence is granted under section 911A of the Corporations Act 2001. This licence is subject to modified conditions compared to an Australian financial services licence.

Eligibility for a foreign AFS licence requires the applicant to be regulated in a ‘sufficiently equivalent’ overseas jurisdiction. ASIC must have notified an arrangement with that overseas jurisdiction for this to be the case. Currently notified jurisdictions include the United Kingdom (FCA), United States (SEC/CFTC), Hong Kong (SFC), Singapore (MAS), Germany (BaFin), Luxembourg (CSSF) and Ontario (OSC), among others.

Foreign AFS licensees are permitted to provide a defined range of financial services to wholesale clients in Australia. A condition of holding a foreign AFS licence is the obligation to comply with the foreign regulatory requirements and to notify ASIC of any breaches of those requirements.

Funds management financial services licence

The funds management financial services licence enables eligible Foreign Financial Services Providers (FFSPs) to offer funds management financial services to professional investors in Australia. This licensing pathway is specifically designed for fund managers providing managed investment products to Australian institutional investors.

To be eligible for this licence, FFSPs must satisfy fit and proper person criteria and receive confirmation of good standing from their home country regulator.

Licence holders are subject to reduced conduct obligations but remain under ASIC’s regulatory oversight. The conditions for this relief are detailed in ASIC instruments and are subject to ongoing eligibility requirements.

Limited connection and other relief

FFSPs with a limited connection to Australia may have previously been eligible for relief under ASIC Class Order CO 03/824. This limited connection relief has been progressively narrowed over time. FFSPs that are no longer eligible for this relief must either apply for an Australian Financial Services Licence (AFSL) or restructure their operations.

Failure to comply with the conditions of any relief granted can result in ASIC withdrawing that relief and taking enforcement action. FFSPs operating under relief are subject to ongoing reporting obligations, including notifying ASIC of changes to their overseas regulatory status.

ASIC continues to review the FFSP framework and is consulting on further refinements to the regulatory approach.