ASIC Corporations (Amendment) Instrument 2025/799

Explanatory Statement

ASIC Corporations (Foreign Financial Services Providers) Instrument 2025/798 and ASIC Corporations (Amendment) Instrument 2025/799

This is the Explanatory Statement for ASIC Corporations (Foreign Financial Services Providers) Instrument 2025/798 (the Transitional Instrument) and ASIC Corporations (Amendment) Instrument 2025/799 (the Extension Instrument).

The Explanatory Statement is approved by the Australian Securities and Investments Commission (ASIC).

Summary

1.              The Transitional Instrument and the Extension Instrument continue in effect relief from AFS licensing requirements for certain foreign financial services providers (FFSPs) until 31 March 2027.

Purpose of the instrument

1.              The purpose of the Transitional Instrument and the Extension Instrument is to continue in effect ASIC’s sufficient equivalence relief and limited connection relief for FFSPs until 31 March 2027, pending the outcome of the Government’s law reform about regulation of FFSPs.

ASIC’s sufficient equivalence relief

1.              Prior to 2016, ASIC conditionally exempted FFSPs from the requirement to hold an Australian financial services licence when providing specified financial services in Australia where:
   1.           the financial services are provided to wholesale clients only;
   2.           the financial services are regulated by an overseas regulatory authority;
   3.           the regulatory regime overseen by the overseas regulatory authority is sufficiently equivalent to the Australian regulatory regime;
   4.           there are effective cooperation arrangements between the overseas regulatory authority and ASIC; and
   5.           the FFSP meets all the relevant conditions of the relief.
2.              That relief was provided under seven legislative instruments:
   1.           ASIC Class Order [CO 03/1099] UK FCA regulated financial service providers
   2.           ASIC Class Order [CO 03/1100] US SEC regulated financial service providers
   3.           ASIC Class Order [CO 03/1101] US Federal Reserve and OCC regulated financial service providers
   4.           ASIC Class Order [CO 03/1102] Singapore MAS regulated financial service providers
   5.           ASIC Class Order [CO 03/1103] Hong Kong SFC regulated financial service providers
   6.             ASIC Class Order [CO 04/829] US CFTC regulated financial services providers
   7.           ASIC Class Order [CO 04/1313] German BaFin regulated financial service providers.
3.              In September 2016, ASIC made ASIC Corporations (Repeal and Transitional) Instrument 2016/396 to repeal these seven legislative instruments and provide transitional relief to preserve the effect of these legislative instruments to enable ASIC to conduct a review of the policy settings underlying the relief.
4.              In November 2016, ASIC made ASIC Corporations (CSSF-Regulated Financial Services Providers) Instrument 2016/1109 on similar terms to [CO 03/1099]. The instrument was issued for a fixed period to be consistent with the expiry of the relief contained in ASIC Corporations (Repeal and Transitional) Instrument 2016/396.
5.              The Transition Instrument and Extension Instrument further extend ASIC’s sufficient equivalence relief until 31 March 2027 pending the outcome of the Government’s law reform about regulation of FFSPs.

ASIC’s limited connection relief

1.              In September 2003, ASIC made ASIC Class Order [CO 03/824] Licensing relief for foreign entities with limited connection to Australian wholesale clients to provide relief from the requirement to hold an AFS licence where the person providing the financial services is:
   1.           not in this jurisdiction;
   2.           dealing only with wholesale clients; and
   3.           carrying on a financial services business by engaging in conduct that is intended to induce people in this jurisdiction to use the financial services the person provides, or is likely to have that effect: see s911D(1) (‘inducing conduct’).
2.              This relief was continued in effect by ASIC Corporations (Foreign Financial Services Providers – Limited Connection) Instrument 2017/182.
3.          The limited connection relief is intended to ensure that infrequent, arms-length transactions by a FFSP with Australian wholesale clients would not require a licence where there is a limited connection between the FFSP and Australia. It was largely made due to concerns that overseas counterparties to derivatives and foreign exchange transactions may be caught engaging in ‘inducing’ activities under section 911D of the Act, requiring an AFS licence, when issuing financial products to Australian wholesale clients. This would require those overseas counterparties to be licensed to enter into derivatives and foreign exchange contracts on an ad hoc basis with Australian wholesale clients.
4.          The Extension Instrument further extends ASIC’s limited connection relief until 31 March 2027 pending the outcome of the Government’s law reform about regulation of FFSPs.

ASIC’s funds management relief

1.          In March 2020, ASIC issued ASIC Corporations (Foreign Financial Services Providers—Funds Management Financial Services) Instrument 2020/199, which provides licensing relief to providers of funds management financial services to some categories of Australian professional investors.
2.          The commencement of the funds management relief has been delayed pending the outcome of the Government’s law reform about regulation of FFSPs. The Extension Instrument further delays the commencement date until 1 April 2027.

Law reform about regulation of FFSPs

1.          In November 2025, the Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Bill 2025 (Bill) was introduced into Parliament.
2.          The Bill will provide licensing exemptions for FFSPs dealing with certain Australian clients. These exemptions will apply to entities that:
   1.           provide financial services from outside Australia to professional investors (professional investor exemption); 
   2.           are regulated by comparable regulators and that provide financial services to wholesale clients (comparable regulator exemption); or 
   3.           provide financial services that involve making a market for derivatives that are able to be traded on a specified licensed market (market maker exemption).
3.          The Bill also establishes a fast-track licensing process for persons seeking to establish more permanent operations in Australia by providing an exemption for persons regulated by comparable regulators from the fit and proper person test when applying for an AFS licence to provide financial services to wholesale clients.
4.          The licensing exemption regime under the Bill is expected to commence 12 months after the Bill receives Royal Assent. In order to ease transition for entities that are currently relying on ASIC’s sufficient equivalence relief or limited connection relief, the Transitional Instrument and Extension Instrument will allow those entities to continue to rely on the relevant relief until 31 March 2027. ASIC will consider whether any adjustment to this date is necessary once a commencement date for the Bill is set.

Operation of the instrument

Transitional Instrument

1.          Section 6 defines the seven repealed ASIC FFSP Class Orders whose operation is to be preserved.
2.          Subsection 7(1) provides that the exemptions specified in the repealed ASIC Class Orders continue to apply by force of the Transitional Instrument, in the circumstances and on the conditions specified in relation to the exemption.
3.          Subsection 7(2) provides that an exemption that continues to apply by force of subsection 7(1) applies provided any person relying on the exemption:
   1.           was able to rely on the exemption (as continued in force by ASIC Corporations (Repeal and Transitional) Instrument 2016/396) on 31 March 2020; and
   2.           complies with any written notice given by ASIC directing the person to give to ASIC, within the time specified in the notice, a written statement containing specified information about the financial service business operated by the person in this jurisdiction.
4.          Section 8 provides that the exemption ceases on 31 March 2027.
5.          The Transitional Instrument commences on the day after it is registered.
6.          Section 7 of the Transitional Instrument is a remake of item 1(1) of Sch 2 of ASIC Corporations (Repeal and Transitional) Instrument 2016/396, which is scheduled to sunset on 1 October 2026.
7.          Section 10(b) of the Acts Interpretation Act 1901 (AIA) provides that ‘where an Act contains a reference to a short title…of another Act as originally enacted…then, where that other Act has been repealed and re-enacted, with or without modifications, the reference shall be construed as including a reference to the re-enacted Act as originally enacted and as amended from time to time’. This provision also applies to legislative instruments through section 13(1)(a) of the Legislation Act 2003, which provides that ‘the [AIA] applies to any instrument so made as if it were an Act and as if each provision of the instrument were a section of an Act’.
8.          Section 46(1)(a) of the AIA applies to the construction of non-legislative instruments as if it were an Act. ASIC’s individual relief instruments made under section 926A of the Corporations Act are such non-legislative instruments.
9.          The effect of these provisions is that references to ASIC Corporations (Repeal and Transitional) Instrument 2016/396 in an ASIC individual relief instrument can be construed as references to the Transitional Instrument. For example, where an individual relief instrument provides that it will cease to have effect at the same time as ASIC Corporations (Repeal and Transitional) Instrument 2016/396 ceases to have effect, that individual relief instrument can be construed as ceasing at the same time as the Transitional Instrument ceases.

Extension Instrument

1.          Item 1 of Schedule 1 amends ASIC Corporations (CSSF-Regulated Financial Services Providers) Instrument 2016/1109 by preserving the effect of the instrument until 31 March 2027, but an FFSP would only be able to rely on this instrument if it was able to rely on the instrument as at 31 March 2020.
2.          Item 2 of Schedule 1 amends ASIC Corporations (Foreign Financial Services Providers—Limited Connection) Instrument 2017/182 by preserving the effect of the instrument until 31 March 2027.
3.          Item 3 of Schedule 1 amends ASIC Corporations (Foreign Financial Services Providers—Funds Management Financial Services) Instrument 2020/199 by delaying the commencement of the instrument until 1 April 2027.
4.          Item 4 of Schedule 1 repeals a note in ASIC Corporations (Foreign Financial Services Providers—Funds Management Financial Services) Instrument 2020/199 that is no longer necessary.
5.          The Extension Instrument commences on the day after it is registered.

Legislative instrument and primary legislation 

1.          The subject matter and policy implemented by the Transitional Instrument and Extension Instrument are more appropriate for a legislative instrument rather than primary legislation because they extend the operation of ASIC relief which is currently provided through legislative instruments.
2.          The Transitional Instrument and Extension Instrument will become unnecessary if the Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Bill 2025 is passed.

Duration of the instrument

1.          The effect of the instrument is to extend the duration of ASIC’s sufficient equivalence relief and limited connection relief for FFSPs for a further 12 months, pending the outcome of the Government’s law reform about regulation of FFSPs.

Legislative authority

1.          ASIC makes the Transitional Instrument under paragraph 911A(2)(l) of the Act and the Extension Instrument under subsection 926A(2) of the Act.
2.          Paragraph 911A(2)(l) of the Act provides that ASIC may exempt a person from the requirement to hold an Australian financial services (AFS) licence for a financial service they provide in circumstances where the provision of the service is covered by an exemption specified by ASIC in writing and published in the Gazette.
3.          Subsection 926A(2) of the Act provides that ASIC may exempt a class of persons from all or specified provisions of Part 7.6 of the Act, other than Divisions 4 and 8 of Part 7.6.
4.          Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

Statement of Compatibility with Human Rights 

1.          The Explanatory Statement for a disallowable legislative instrument must contain a Statement of Compatibility with Human Rights under subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011. A Statement of Compatibility with Human Rights is in the Attachment.

Attachment

Statement of Compatibility with Human Rights

This Statement of Compatibility with Human Rights is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.  

ASIC Corporations (Foreign Financial Services Providers) Instrument 2025/798 and ASIC Corporations (Amendment) Instrument 2025/799

Overview

1. ASIC Corporations (Foreign Financial Services Providers) Instrument 2025/798 and ASIC Corporations (Amendment) Instrument 2025/799 continue in effect relief from AFS licensing requirements for certain foreign financial services providers until 31 March 2027.

Assessment of human rights implications

2. This instrument does not engage any of the applicable rights or freedoms  

Conclusion

3. This instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.