AUSTRALIA Law and Practice Contributed by: Michael Lawson, Nicole Brown, Lizzie White and Tamaryn Leach, MinterEllison
is widely held). The concept of “control” is widely interpreted for Australian income tax purposes. In certain circumstances, including where a for - eign entity holds 20% of the interests in an Aus - tralian fund or 40% of the interests in aggregate in an Australian fund are held by foreign entities and their associates, approval may be required by FIRB in respect of such fund investments. 2.3.2 Requirements for Non-Local Service Providers Please see 2.3.3 Local Regulatory Require- ments for Non-local Managers . 2.3.3 Local Regulatory Requirements for Non- Local Managers Non-local providers of financial services, including investment managers, have two main options for providing financial services to Aus - tralian wholesale clients in addition to the option of holding an AFSL: • they may apply for individual relief from ASIC to be relieved of the obligation to hold an AFSL (as part of ASIC’s current transitional arrangements for foreign financial services providers (FFSPs); or • they may rely on another relevant exemption from the requirement to hold an AFSL. The FFSP regime of exemptions is currently under review and in a period of transition. A new regime was initially proposed to take full effect on 1 April 2022 but has been delayed until 1 April 2025. The Australian federal government (the “federal government”) consulted on a new direction for the regime in 2021 and introduced a bill in February 2022 – albeit, when the federal government called an election in May 2022, a bill containing proposed new exemptions lapsed. A subsequent bill containing the proposed amend -
ments to the FFSP regime was introduced to Parliament in November 2023 with a proposed commencement date of 1 April 2025. However, as Parliament is not scheduled to reconvene until early in 2025, there remains uncertainty as to the timing of the passage of this bill. As a result, the current licensing and exemption arrangements for FFSPs remain in a transitional period. For further information, see The Foreign Financial Service Providers (FFSP) Regime in 4.1 Recent Developments and Proposals for Reform . 2.3.4 Regulatory Approval Process A regulated fund (typically an Australian unit trust) is known as a registered managed invest - ment scheme, meaning it is registered with ASIC. The registration process is relatively straightfor - ward and only requires that: • the trustee of the fund holds an AFSL author - ising it to be a “responsible entity” of a regis - tered managed investment scheme; • the responsible entity is an Australian public company; and • the constitution of the fund meets the require - ments of the Corporations Act. • Once ASIC receives an application for reg - istration, a decision on registration must be made within 14 days. As previously noted, a limited partnership can be incorporated within approximately two business days. Registration of VCLPs and ESVCLPs can take as little as one month, assuming all required documents have been prepared. Registration fees are modest.
16
CHAMBERS.COM
Powered by FlippingBook