A welcome development (but room for refinement): Submission on the draft FFSP Bill

10 minute read (PDF download) 12.09.2023 Richard Batten, Prayas Pradhan

Our views on the proposed reforms

The Australian Government has released Exposure Draft legislation (FFSP Bill), which seeks to codify licensing exemptions for foreign financial service providers (FFSPs). The explanatory memorandum (EM) to the FFSP Bill states that it will ‘facilitate cross-border financial services while balancing the need to ensure regulatory oversight of foreign financial services provider activity in Australia’. The FFSP Bill aims to achieve this objective by replacing the existing licensing relief for FFSPs with the following four exemptions for FFSPs:

professional investor exemption
comparable regulator exemption
market maker exemption, and
fit and proper person test exemption.

You can find our detailed overview of the proposed changes here: The New World for FFSPs

MinterEllison's submission

We have also made a submission on the draft FFSP Bill.

We generally support the proposed approach, including in particular:

the retention of a version of the ASIC's current 'sufficient equivalence' relief, referred to in the Exposure Draft as the ‘comparable regulator’ exemption;
the extension of the 'comparable regulator' exemption to the additional regulators recognised by ASIC in its revised FFSP regime as indicated in the Exposure Draft Explanatory Memorandum (EM);
providing an exemption for FFSPs who provide financial services to professional investors; and
providing an exemption from the fit and proper person requirement for FFSPs regulated by a 'comparable regulator'.

However, we do have some concerns about certain aspects of the proposed regime which we consider may prove difficult for FFSPs. These are detailed in our submission, together with suggested solutions.

You can download the full text of our submission here