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Easier for overseas providers to operate

THE Australian Securities and Investments Commission (ASIC) has revised its policy statement PS176 to make it easier for wholesale foreign financial services providers (FFSPs) to operate in the Australian market.

The revisions clarify how PS176 should apply under amendments to the law made by the Financial Services Reform Act 2003.

According to ASIC Director of Regulatory Policy, Mark Adams, they are part of ASIC's "ongoing facilitation of financial services in Australia by foreign financial services providers."

In essence, the revisions will assist FFSPs to make the case to ASIC for recognition of equivalent regulation by overseas regulatory authorities, the requirement for ASIC to grant relief from the financial services licensing regime.

There are many individual revisions, but essentially they clarify how ASIC will identify the relevant overseas regulatory autho,rity of an FFSP in its assessment of that FFSP's application for relief under PS176.

They also facilitate six-monthly notification (replacing a previous continuous requirement) by FFSPs of significant changes to an individual FFSP's regulatory regime and any enforcement actions against it by its overseas regulator/s.

PS176 governs ASIC's powers under the Corporations Act 2001 to provide relief from the financial services licensing regime for FFSPs that are regulated by overseas regulatory authorities.

The relief is provided where an FFSP can satisfy ASIC that its overseas regulatory authority is sufficiently equivalent to regulation by ASIC and where there are effective cooperation arrangements between ASIC and that overseas regulatory authority.