ASIC Reissues Regulatory Guide 121: Updated Guidance for International Financial Services Businesses in Australia
The Australian Securities and Investments Commission (ASIC) has reissued Regulatory Guide 121 (RG 121) to offer updated guidance for individuals and companies outside Australia seeking to conduct financial services business within the country. This revised version replaces the previous guidance issued in June 2013, ensuring that stakeholders have access to the latest regulatory information.
Key Updates to Regulatory Guide 121
The updated RG 121 introduces several important changes designed to clarify the requirements for foreign financial service providers (FFSPs) and enhance understanding of Australia’s financial services regulatory framework. The main updates include:
- Removal of Outdated References: The revised guide eliminates references to expired or repealed Australian Financial Services (AFS) licensing relief, including any class relief previously granted to FFSPs and foreign collective investment schemes. This streamlining helps to ensure that the guidance is current and relevant.
- Clarified Licensing Exemptions: Descriptions of AFS licensing exemptions and relief have been amended to accurately reflect the options currently available to international businesses. This adjustment aims to provide clearer guidance on navigating the licensing landscape.
- Updated Interpretation of ‘Carrying on a Business’: The guide now includes updated descriptions of the courts’ interpretation of what constitutes “carrying on a business in Australia.” This section outlines general indicators and relevant factors that determine when an activity may be considered business conduct, including the nuances of one-off transactions that could qualify.
- Current Legal and Regulatory Framework: References to financial products and services, the obligations of AFS licensees, applicable legislation, and ASIC’s regulatory documents have been updated to align with the current legal and regulatory environment. This ensures that international entities have the most accurate and relevant information at their disposal.
Understanding the Financial Services Regime in Australia
RG 121 serves as an essential resource for foreign entities looking to navigate Australia’s financial services regime. The guidance includes crucial information on:
- AFS Licensing Requirements: It outlines when an individual or company from outside Australia must obtain an AFS license to engage in financial services activities within the country.
- Exemptions from Licensing: The guide specifies circumstances under which foreign individuals or companies may be exempt from holding an AFS license.
- Obligations of AFS Licensees: It provides insights into the obligations that come with being an AFS licensee, ensuring that foreign businesses are aware of their responsibilities while operating in Australia.
Enhancing Clarity for International Financial Services Providers
By reissuing RG 121, ASIC aims to enhance the clarity and accessibility of information for foreign financial service providers seeking to establish or continue their operations in Australia. The revisions reflect ASIC’s commitment to fostering a transparent and robust financial services environment while ensuring that international businesses have the necessary guidance to comply with local regulations.
The updated RG 121 stands as a vital tool for those looking to enter the Australian financial market, offering a comprehensive understanding of the legal landscape and the requirements for doing business in the country.
