ASIC Class Order [CO 05/308]

Administered by Department of the Treasury

Legislation au F2005L01187 Not in force Legislative Instrument

Legislation content

ASIC CLASS ORDER [05/308]

 

EXPLANATORY STATEMENT

 

Prepared by the Australian Securities and Investments Commission

 

Corporations Act 2001

 

Paragraph 911A(2)(l) – Variation

 

The Australian Securities and Investments Commission (ASIC) makes Class Order [C0 05/308] Foreign financial services providers - amendment under s911A(2)(l) of the Corporations Act 2001 (the Act). Section 911A(2)(l) provides that a person is exempt from the requirement to hold an Australian financial services licence for a financial service they provide if the provision of the service is covered by an exemption specified by ASIC in writing and published in the Gazette.

 

1. Background

 

ASIC has adopted Policy Statement 176 Licensing: Discretionary powers-wholesale foreign financial services providers [PS 176] which outlines when ASIC will grant exemptions from the requirement to hold an Australian financial services (AFS) licence to financial services providers who:

  •      provide services in Australia only to wholesale clients; and
  •      are regulated by an overseas regulatory authority. 

ASIC has granted class order relief under [PS 176] to foreign financial services providers (FFSPs) regulated by a number of overseas regulatory authorities (existing [PS 176] class orders).  The existing [PS 176] class orders are listed at the end of this Explanatory Statement.

Under these existing [PS 176] class orders, an FFSP is only exempt from the obligation to hold an AFS licence if the FFSP meets certain requirements.  These requirements include an obligation to notify ASIC as soon as practicable of the following matters (notification requirements):

  •   any significant change to the authorisation granted by the relevant overseas regulatory authority to the FFSP relevant to the actual financial services provided in Australia under the exemption;
  •   any exemptions granted to the FFSP under the relevant overseas regulatory regime;
  •   any significant changes to the relevant overseas regulatory regime relevant to the actual financial services provided in Australia under the exemption; and
  •   any enforcement or disciplinary action against the FFSP in any foreign jurisdiction by any overseas regulatory authority and the nature of such action.

 

In addition, under the existing [PS 176] class orders an FFSP’s exemption lapses unless, within 10 business days of the day on which the FFSP becomes aware (or should reasonably have become aware) of a breach of the notification requirements or certain other requirements, the FFSP has provided full particulars of the breach to ASIC and ASIC has notified the FFSP that it may continue to rely on the exemption (lapsing provisions). 

 

2. Purpose of the class order

 

The purpose of [CO 05/308] is to facilitate the administration of and compliance with class orders issued under [PS 176]. 

 

3. The class order

 

[CO 05/308] amends the notification requirements and the lapsing provisions included in the existing [PS 176] class orders.

 

Notification provisions

 

[CO 05/308] amends the notification requirements of the existing [PS 176] class orders to permit 6-monthly reporting, including nil returns, in relation to the following two notification requirements:

  •   any significant changes to the relevant overseas regulatory regime relevant to the actual financial services the FFSP is providing in Australia under any exemption; and
  •   any enforcement or disciplinary action against the FFSP in any foreign jurisdiction by any overseas regulator and the nature of such action.

These notification requirements have been modified to facilitate FFSPs' compliance with our requirements and to make the policy easier for ASIC to enforce. Other notification requirements in the existing [PS 176] class orders are not affected by [CO 05/308].

 

Lapsing provisions

 

[CO 05/0308] modifies the lapsing provisions of the existing [PS 176] class orders in order to create more realistic time periods before relief lapses.  Rather than 10 business days during which the FFSP must notify ASIC of its failure to comply with requirements of the class order and ASIC must respond, [CO 05/0308] provides that the FFSP has 15 business days during which to notify ASIC of such a failure, and ASIC has a further 30 business days to consider whether relief should continue to apply.

 

4. Consultation

 

In preparing [CO 05/308], ASIC has taken into account industry views expressed at regular industry liaison meetings.  In addition, officers of ASIC met with representatives of IBSA, certain FFSPs, and their legal representatives to discuss the details of this class order. 

 

ASIC did not undertake further consultation because [CO 05/308] is of a minor and machinery nature and does not substantially alter ASIC’s existing policy in [PS 176].

 


5. Existing [PS 176] class orders

 

ASIC has granted class order relief under [PS 176] to FFSPs regulated by:

  •   the UK Financial Services Authority (Class Order [CO 03/1099] UK FSA regulated financial service providers, as amended by Class Order [CO 04/100] Foreign financial services providers: licensing relief – amendment);
  •   the US Securities and Exchange Commission (Class Order [CO 03/1100] US SEC regulated financial service providers, as amended by Class Order [CO 04/100] Foreign financial services providers: licensing relief – amendment);
  •   the US Federal Reserve and Office of Comptroller of Currency (Class Order [CO 03/1101] US Federal Reserve and OCC regulated financial service providers, as amended by Class Orders [CO 04/100] Foreign financial services providers: licensing relief - amendment and [CO 04/213] US Federal Reserve and OCC regulated financial service providers - amendment);
  •   the Monetary Authority of Singapore (Class Order [CO 03/1102] Singapore MAS regulated financial service providers, as amended by [CO 04/100] Foreign financial services providers: licensing relief – amendment);
  •   the Securities and Futures Commission of Hong Kong (Class Order [CO 03/1103] Hong Kong SFC regulated financial service providers, as amended by [CO 04/100] Foreign financial services providers: licensing relief - amendment);
  •   the US Commodity Futures Trading Commission (Class Order [CO 04/829] US CFTC regulated financial services providers); and
  •   the Bundesanstalt für Finanzdienstleistungsaufsicht of Germany (BaFin) (Class Order [CO 04/1313] German BaFin regulated financial service providers).

These class orders were made under s911A(2)(l) of the Act.  Future [PS 176] class orders will be made under s911A(2)(h) of the Act, as a result of amendments to the Act by the Financial Services Reform Amendment Act 2003.

 

Overview

The Australian Securities and Investments Commission (ASIC) enacted Class Order [C0 05/308] under the Corporations Act 2001 to streamline and facilitate compliance for foreign financial services providers (FFSPs) who operate in Australia under specific exemptions from holding an Australian Financial Services (AFS) licence. This class order addresses the administrative burden on FFSPs by modifying the notification and lapsing provisions outlined in existing class orders issued under Policy Statement 176 (PS 176). The policy objective is to make compliance easier for FFSPs while ensuring ASIC can effectively enforce the policy. Class Order [C0 05/308] permits FFSPs to report significant changes and disciplinary actions on a six-monthly basis, and it extends the timeframe for addressing breaches of the class orders, thus providing more realistic compliance periods. This approach aims to better align with industry practices and reduce the administrative load on both FFSPs and ASIC.

Scope and Application

The ASIC Class Order [C0 05/308] under the Corporations Act 2001 applies to foreign financial services providers (FFSPs) regulated by certain overseas regulatory authorities and operating in Australia. This Class Order amends existing class orders that provide exemptions from holding an Australian financial services (AFS) licence for FFSPs providing services only to wholesale clients. The class order is applicable to FFSPs regulated by the UK Financial Services Authority, the US Securities and Exchange Commission, the US Federal Reserve and Office of Comptroller of the Currency, the Monetary Authority of Singapore, the Securities and Futures Commission of Hong Kong, the US Commodity Futures Trading Commission, and the Bundesanstalt für Finanzdienstleistungsaufsicht of Germany. The changes introduced by this Class Order are designed to facilitate the administration of and compliance with class orders issued under Policy Statement 176, specifically by modifying the notification requirements and lapsing provisions for FFSPs. The Class Order applies nationally across Australia and aims to create more realistic time periods for FFSPs to notify ASIC of any failures to comply with the requirements of the class order, thereby allowing ASIC more time to consider whether relief should continue to apply. The Class Order does not extend or restrict the application of subordinate instruments beyond the specified amendments.

Key Provisions

The main provisions of the ASIC Class Order [CO 05/308] are outlined under sections 911A(2)(l) of the Corporations Act 2001, which provides exemptions for foreign financial services providers (FFSPs) from holding an Australian financial services (AFS) licence, provided certain conditions are met. Specifically, the Class Order [CO 05/308] amends the existing requirements under Policy Statement 176, focusing on the notification requirements and lapsing provisions for FFSPs regulated by overseas authorities. The key changes include allowing for six-monthly reporting of significant changes to overseas regulatory regimes and enforcement actions against the FFSP, instead of the previous requirement for immediate reporting of any such changes or actions. Additionally, the Class Order extends the time frame for FFSPs to notify ASIC of breaches from 10 to 15 business days, and for ASIC to respond, from an unspecified period to 30 business days. The obligations imposed by the Class Order [CO 05/308] on the FFSPs include the requirement to notify ASIC within 15 business days of becoming aware of any breaches of the notification requirements or other conditions. The FFSPs must also provide full particulars of the breach and allow ASIC 30 business days to consider whether the exemption should continue to apply. Failure to meet these obligations may result in the exemption lapsing, thus requiring the FFSP to hold an AFS licence for the financial services it provides in Australia. The Class Order [CO 05/308] does not explicitly state penalties for non-compliance; however, breaches of the Corporations Act 2001 can lead to significant civil and criminal consequences. Civil penalties can include substantial fines, with the maximum penalty depending on the specific breach, but often reaching into the millions of Australian dollars for serious corporate offences. Criminal penalties can include imprisonment, with the maximum term varying based on the severity of the offence, potentially reaching up to several years for significant breaches. Additionally, ASIC has the authority to seek injunctions and other remedies to enforce compliance with the Act and its related class orders.

Legal classification tags

Area of Law
Administrative Law
Financial Services
Instrument
Regulation
Concepts
Definitions & Interpretation
Notification Requirements
Lapsing Provisions
Consultation Requirements
Catchwords
Foreign financial services providers
Exemptions from AFS licence

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.