ASIC consults on foreign financial services provider rules

Australia’s financial regulator, the Australian Securities and Investments Commission (ASIC), is seeking feedback on draft guidance and proposed transitional arrangements for its new foreign financial services provider (FFSP) regime. ASIC announced the consultation on 6 November 2026; the regime is scheduled to commence on 8 April 2027, and comments on the proposals close on 4 December 2026, according to ASIC’s published notice.

ASIC’s proposals cover three areas: guidance on the new regime, an extension of existing transitional relief, and conditional class relief for certain global operating models. ASIC says the measures are intended to support an orderly transition, provide greater certainty for FFSPs and accommodate some global operating models while maintaining regulatory safeguards.

The proposed guidance would explain which statutory exemptions may be available, their eligibility criteria and conditions, and the initial and ongoing notifications that FFSPs must give ASIC. It would also describe ASIC’s approach to administering the regime, including the requirement to notify the regulator of significant enforcement actions against an FFSP in its overseas jurisdiction. ASIC is asking whether its draft explanations of the exemptions and their conditions are appropriate.

For firms relying on ASIC’s existing sufficient equivalence or limited connection relief, ASIC proposes a six-month extension. Those relief arrangements are due to expire on 31 March 2027; under the proposal, they would continue until 1 October 2027. ASIC says affected FFSPs would need to transition to the new regime or apply for an Australian financial services (AFS) licence, as appropriate.

ASIC also proposes repealing two existing instruments. It proposes to repeal Instrument 2020/198 on 30 September 2027. ASIC says that repeal would not automatically cancel a foreign AFS licence. A foreign AFS licensee that does not apply to cancel its licence and instead relies on a new-regime exemption would still need to comply with applicable AFS licence obligations. ASIC proposes to repeal Instrument 2020/199 when the amendment instrument commences, because the new professional investor exemption would replace that relief.

The new regime’s professional investor exemption may apply when an FFSP provides financial services from outside Australia to professional investors in Australia. ASIC says some firms use global operating models in which trading, risk management and operational functions move between offices in different time zones. Under those arrangements, staff in Australia may support a service that is principally provided, supervised and managed offshore.

ASIC is proposing conditional class relief that would allow individuals in Australia to support an offshore FFSP’s provision of financial services. The proposed relief would be limited to cases where:

In considering whether a service is principally provided from offshore, ASIC says relevant factors may include where responsibility, decision-making, execution, booking, risk ownership and supervision sit. ASIC proposes that the class relief would expire after five years and is asking whether its scope, conditions and proposed assessment factors are clear, appropriate and workable.

The consultation concerns how some foreign firms may provide financial services in Australia without an AFS licence by relying on an exemption, as well as the transition from existing relief. For readers comparing brokers, it is a reminder to distinguish the firm’s legal entity, the jurisdiction in which it operates and the client group a particular exemption covers. ASIC’s proposals specifically refer to professional investors, wholesale clients and institutional investors; they do not establish that any particular broker or service qualifies.

The proposals are not a final determination of an individual firm’s regulatory status. Nor does an exemption or licence, by itself, establish that every product or client arrangement has the same protections. Readers checking a broker should verify the relevant entity and its status on ASIC’s register, and consider whether the information relates to the jurisdiction and type of client relevant to them.

ASIC is also seeking information about expected upfront and ongoing compliance costs or savings, possible changes firms might otherwise make to their operating models, practical difficulties or unintended consequences, and any effect on Australian institutional investors’ access to offshore products, markets, liquidity or expertise. It asks respondents to provide specific examples and dollar estimates where possible.

According to ASIC, the new FFSP regime is set out in Schedule 2 to the Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Act 2026. It is due to replace the current ASIC relief framework for FFSPs on 8 April 2027.

The regime provides exemptions from the requirement to hold an AFS licence for FFSPs that provide financial services from outside Australia to professional investors; are regulated by comparable regulators and provide services to wholesale clients; or make a market for certain derivatives traded on a prescribed licensed market. An FFSP intending to rely on one or more statutory exemptions must notify ASIC and meet the conditions for the relevant exemption.

ASIC also says the new regime introduces a fast-track process for FFSPs applying for an AFS licence. The notice describes an exemption from the “fit and proper” test in this process, but the published description provided here does not set out the condition attached to that exemption.

ASIC says it will consider the likely regulatory impacts before settling the final instruments and guidance. Feedback is due by 5 pm AEDT on 4 December 2026 and can be sent to [email protected]. Respondents may submit anonymously or use an alias; ASIC notes that it cannot contact anonymous respondents to discuss their feedback if needed. Feedback will not be treated as confidential unless the respondent specifically requests that all or part of it be treated as confidential.

The new regime’s stated commencement date is 8 April 2027. ASIC’s notice does not give a date for finalising the consultation proposals, so firms and clients will need to check ASIC’s published updates for the final guidance and instruments.