A bill before Parliament will, if passed, restore and extend licensing relief for foreign financial services companies dealing with Australian investors.

The government got around to introducing one piece of financial services legislation during the Parliamentary sitting that finished last week.

Treasury Laws Amendment (Streamlining and Improving Economic Outcomes for Australians) Bill 2022 includes provisions that provide exemptions from the requirement to hold an Australian financial services licence in the following cases:•    where services are provided outside Australia to professional investors; and•    where the provider is regulated by comparable regulation overseas and provides services to wholesale clients.

The provisions cover banking, investment funding, wealth management, insurance and financial advisory services.

The bill restores former regulatory relief in this area. ASIC had provided various types of licensing relief for many years but made changes in 2020 that narrowed the relief available. 

The bill replaces several ASIC regulations with measures the government says restore reliefs and also address ASIC’s concerns.

The government says safeguards include a requirement for an entity to notify ASIC if it is relying on the relief and a power that allows ASIC to impose conditions.

The bill also includes an exemption from the fit and proper person test for entities regulated by comparable regulation overseas, when applying for an Australian financial services licence.

This provision is designed to create a fast-track licensing process for foreign financial services providers that intend to establish permanent operations in Australia.