AUSTRALIA Law and Practice Contributed by: Steven Pettigrove, Katrina Sharman, Luke Higgins and William Deeb, Piper Alderman
3.4 Passporting Australian financial services licences do not benefit from a broad passporting regime and cannot be used to automatically access other jurisdictions. Unlike the EU model, there is no multilateral framework that con- fers cross-border rights on Australian licensees. Instead, access to foreign markets is determined by the laws of the destination jurisdiction, which will gen- erally require: • a local authorisation; or • reliance on limited exemptions (if available). Reforms to Australia’s foreign financial service pro- vider regime, which will be implemented in 2027, are expected to provide a clearer pathway for overseas licensees from peer jurisdictions to enter the Austral- ian market. The sale of blockchain and crypto-asset services in Australia is subject to the territorial scope of Australian financial services and consumer protection laws, rath- er than any bespoke cross border licensing regime. Where a crypto-asset constitutes a “financial prod- uct” or where a person provides financial services in relation to it to clients in Australia, the provider must generally hold an AFSL or rely on an exemption. ASIC has made clear that Australian law applies where digi- tal assets are marketed, sold or services are provided to Australian users, including from offshore and that reliance on offshore or decentralised structures does not displace these obligations. Accordingly, a foreign provider selling crypto-asset services into Australia may be required to: • obtain an AFSL authorising the relevant activi- ties (eg, dealing, advising or operating a financial product); • comply with retail disclosure obligations, including the preparation of a PDS, TMD and FSG; and • comply with ongoing conduct obligations (includ- ing acting efficiently, honestly and fairly) and other 4. Cross-Border Services 4.1 Marketing
regulatory requirements under the Corporations Act. Marketing Restrictions In relation to marketing, Australia does not impose crypto-specific advertising rules comparable to those in some other jurisdictions. However: • where a crypto-asset is a financial product, mar- keting is subject to financial product–specific restrictions, including prohibitions on hawking and requirements that disclosures are clear, accurate and not misleading; • where a crypto-asset is not a financial product, its promotion remains subject to general consumer law, including the prohibition on misleading and deceptive conduct; and • ASIC has emphasised that many digital asset offer- ings will fall within existing financial services laws, meaning that marketing must be consistent with those frameworks. Consistent with this, ASIC enforcement activity in the crypto-asset space has frequently focused on mar- keting representations and “fin-fluencers”, including claims regarding returns, risk, licensing status and product characteristics. Reverse Solicitation Exemption The reverse solicitation exemption allows a foreign financial service provider to provide financial services to an Australian client without holding an AFSL where the service is provided at the client’s own initiative, rather than being the result of marketing or induce- ment into Australia. It is narrowly construed, as any prior marketing, pro- motion or conduct within the jurisdiction will generally preclude reliance on the exemption, meaning the pro- vider will instead be taken to be carrying on a financial services business in Australia and will be required to obtain a licence. 4.2 White Labelling External firms can enter the Australian market using white-label models via the corporate authorised rep- resentative (CAR) framework.
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