AUSTRALIA Trends and Developments Contributed by: Michael Lawson, Nicole Brown, Lizzie White and Tamaryn Leach, MinterEllison
Laws Amendment (Better Targeted Superannua - tion Concessions and Other Measures) Bill 2023 (the “November 2023 Bill”). The November 2023 Bill includes some important improvements for FFSPs, with the Treasury taking on board indus - try feedback during the consultation period for the August 2023 Bill. Notable changes include that: • the dealing exclusion was removed as a con - dition of the professional investor exemption; and • the “efficiently, honestly and fairly” condition have been qualified such that they only apply where the FFSP carries on a financial services business, predominantly in Australia. In the meantime, on 4 August 2023, ASIC released ASIC Corporations (Amendment) Instrument 2023/588 to extend the existing relief for FFSPs until 31 March 2025, the result being that FFSPs could continue to rely on the pass - port relief and limited connection exemptions for a further year. On 30 July 2024, ASIC extend - ed the existing relief for FFSPs by another 12 months until 31 March 2026 by way of ASIC Cor - porations (Amendment) Instrument 2024/497. The decision was presumably made as a pre- emptive step to allow Parliament further time to consider the November 2023 Bill and undertake due process (if required). Notably, the passport relief is only available to an entity if that entity was relying on the exemption before 31 March 2020. Because of this, ASIC has indicated that it will consider new temporary licensing relief applications for FFSPs that were not relying on the passport relief as of 31 March 2020. FFSPs already validly relying on the passport relief (relief for FFSPs already covered by regu -
lations sufficiently equivalent to those in Aus - tralia) can continue to do so until 31 March 2026. New applications for this relief can only be made under an application for individual relief in the same form as the passport relief (ie, providing an avenue for new FFSPs to have access to relief in the form of the passport relief). FFSPs that have been granted a foreign AFSL can continue operating their financial services business in Australia, although ASIC has now paused consideration of new applications for foreign AFSLs. FFSPs may still rely on the limited connection relief to allow them 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 whole - sale clients in Australia. The November 2023 Bill (which was recently split into two separate Bills – the FFSP exemptions being contained in one of those) currently has a proposed commencement date of 1 April 2025. However, there is some uncertainty surrounding this date, given the Bill has yet to be passed by Parliament – and Parliament will not sit again until early 2025. Cyber risk Most fund managers generally have mature risk management systems and processes because they are a requirement of the Australian financial services licensing regime. However, with the fre - quency and sophistication of cyber-attacks on the rise, ASIC is calling on licensees to prioritise their cyber security risks. In fact, ASIC wants it to be a “top priority”. This call to action follows ASIC Report 776, published in November 2023, summarising the results of a voluntary self- assessment survey and ultimately revealing that
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