Investment Funds 2025

AUSTRALIA Law and Practice Contributed by: Michael Lawson, Nicole Brown, Lizzie White and Tamaryn Leach, MinterEllison

benefit from class order relief, exempting them from the need to hold an AFSL, including by virtue of the “sufficient equivalence” relief (also known as “passport relief”) and “limited connec - tion” relief, subject to transitional arrangements. Since then, there has been further consulta - tion and draft legislation in relation to the FFSP regime, most recently resulting in the Treasury Laws Amendment (Better Targeted Superannua - tion Concessions and Other Measures) Bill 2023 being introduced to Parliament in November 2023. This Bill, which was recently split out into a further Bill (containing the FFSP exemptions), seeks to introduce: • a comparable regulator exemption – similar to ASIC’s current “sufficient equivalence” relief, this will be available to FFSPs that provide financial services to wholesale clients and that are regulated by regulators approved by the Government (and not ASIC as is currently the case); • a professional investor exemption – available where: (a) an FFSP provides a financial service to a “professional investor”; (b) the service is provided from outside Australia or during a permitted “marketing visit”; and (c) the FFSP reasonably believes that provid - ing the same or similar service would not contravene any laws in the location where it is provided from or where the FFSP’s head office and principal place of busi - ness are located (it will replace ASIC’s current “limited connection” relief); • a market maker exemption – available where an FFSP is making a market for derivatives that can be traded on a licensed market prescribed by the regulations from outside Australia (exchange-traded futures only), and

the FFSP reasonably believes that making a market in derivatives would not contravene any laws in the location where it is provided from or where the FFSP’s head office and principal place of business are located; • an exemption from the fit and proper person assessment – available to FFSPs authorised to provide substantially the same financial services in a comparable regulatory regime to wholesale clients to fast-track the licensing process. If passed, the exemptions are proposed to take effect on 1 April 2025. However, there is some uncertainty in relation to this date, given that Parliament will not sit again until early in 2025. During this transition period, ASIC has extend - ed relief to enable FFSPs to continue relying on passport relief. Currently, FFSPs that relied on this relief exemption before 31 March 2020 may continue to do so until 31 March 2026. For FFSPs not relying on the relief at this date, ASIC will consider individual temporary relief appli - cations seeking relief in the same form as the passport relief. FFSPs may also still rely on limited connection relief to provide financial services to wholesale clients in Australia until 31 March 2026. This relief allows FFSPs operating outside Australia to provide financial services to wholesale clients in Australia. Please see 2.3.3 Local Regulatory Require- ments for Non-local Managers for further dis- cussion regarding the FFSP regime. Unfair Contracts Regime Following a 12-month transition period, on 9 November 2023, the updated unfair contract terms (UCT) regime commenced. Reforms to the Competition and Consumer Act 2010 (Cth)

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