Australia: Eagerly Awaits Foreign Financial Service Providers’ Legislation

Jun 07 2022

In February this year we provided an update on the introduction of the draft legislation providing relief to Foreign Financial Services Providers (FFSPs) in Australia.

As we discussed back in February the draft legislative pack provided three significant potential exemptions for FFSPs namely:

Professional Investor Exemption
Comparable Regulator Exemption
Fit and Proper Person Test Exemption

It was expected that the legislation would have been passed in the Autumn session of Parliament and in plenty of time to give FFSPs the opportunity to understand the relevance of each exemption and make decisions about which one to apply for noting that the expiry of the existing Class Order Relief program was scheduled for 31 March 2023.

However there was a general election held in Australia a couple of weeks ago and as the proposed FFSP legislation had not been passed by the time the election was called it then lapsed. The general election resulted in a change of Government here and as a result we are unsure when and whether the FFSP legislation introduced back in February 2022 will be passed in its current form. Enquiries have been made of the new Government but, as this legislation was not a high priority issue during the election, the industry has been unable to get any meaningful signals from Government as to its future prospects.

Accordingly we think that we will all have to wait until the dust settles with the new Government before we get any real indication of the way forward for FFSPs. The longer this takes to resolve the more likelihood there is that the proposed date of 31 March 2023 for the termination of the existing Class Order program will again have to be extended.