ASIC has released draft regulatory guidance for foreign financial services providers, proposes to extend transitional relief for foreign financial service providers for six months and provide conditional class relief under the new professional investor exemption to accommodate certain global operating models. ASIC is seeking feedback on these proposals by 4 December 2026.
Where things stand
The new foreign financial service provider (FFSP) regime under Schedule 2 to the Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Act 2026 commences on 8 April 2027. The new FFSP regime replaces the current FFSP relief framework for FFSPs providing financial services to professional and wholesale clients in Australia comprising sufficient equivalence relief, limited connection relief and the FFSP licensing regime which are due to expire on 31 March 2027.
On 6 November 2026, ASIC released proposed draft Regulatory Guide 176 Foreign financial services providers and proposals to extend transitional relief for FFSPs under the current FFSP relief framework by six months and provide conditional class relief under the new professional investor exemption to accommodate certain global operating models. ASIC states that it intends these proposals to support an orderly transition, provide greater certainty for FFSPs and accommodate certain global operating models while maintaining appropriate regulatory safeguards.
Proposed guidance and relief
Key proposed changes:
- Regulatory guidance: ASIC proposes to publish draft Regulatory Guide 176 Foreign financial service providers (Draft RG 176) to explain the new FFSP regime, available statutory exemptions, eligibility criteria, applicable conditions and the initial and ongoing notifications to ASIC that FFSPs must comply with under the new FFSP regime. Draft RG 176 also includes guidance on ASIC’s approach to administering various aspects of the new FFSP regime, including the notification requirement in relation to significant enforcement actions in overseas jurisdictions.
- Extension of transitional relief: ASIC proposes to extend existing transitional relief for FFSPs - the existing sufficient equivalent and limited connection relief - by six months, until 1 October 2027. FFSPs that rely on the current relief will need to transition to the new FFSP regime or apply for an Australian financial services licence (AFSL), as appropriate. ASIC also proposes to repeal ASIC Corporations (Foreign Financial Services Providers—Funds Management Financial Services) Instrument 2020/199 because the professional investor exemption under the new regime replaces that relief.
- Conditional institutional investor class relief: ASIC proposes to provide conditional class relief under the new professional investor exemption to accommodate certain global operating models, for example where individuals in Australia may support a financial service that is principally provided from, supervised, and managed offshore. The proposed relief would be available only where:
- the FFSP has a related entity that holds an AFSL
- the relevant financial service is principally provided from offshore and relates to an offshore financial product
- the financial services are provided to institutional investors in Australia
- the FFSP ensures that activities provided under the relief are provided efficiently, honestly and fairly.
ASIC proposes that relevant considerations in determining whether a financial service is principally provided from offshore may include the locations of responsibility for the service, decision-making, execution, booking, risk ownership and supervision.
Conditional institutional investor class relief is proposed to expire after five years.
New FFSP licensing exemptions
The new FFSP regime commencing on 8 April 2027 provides exemptions from the requirement to hold an Australian financial services licence for FFSPs that:
- provide financial services from outside Australia to professional investors (the ‘professional investor exemption’)
- are regulated by comparable regulators and provide financial services to wholesale clients (the ‘comparable regulator exemption’)
- make a market for certain derivatives traded on a prescribed licensed market (the ‘market maker exemption’).
FFSPs must notify ASIC if they intend to rely on any statutory exemption and must comply with its conditions. ASIC will publish more information about the notification process on its website before the new regime starts.
The new FFSP regime also provides a ‘fast track’ exemption from the ‘fit and proper’ test for FFSPs that apply for an AFSL if they are authorised to provide financial services in a comparable overseas regulatory regime.
For further information on these exemptions, refer to our article on the new FFSP licensing exemptions.
What’s next
ASIC is seeking feedback on proposals to support the transition to the new FFSP regime including:
- Regulatory guidance: whether the Draft RG 176 on the new exemptions available to FFSPs and the conditions associated with relying on an exemption are appropriate.
- Extension of transitional relief: whether the proposed transitional arrangements are appropriate and useful, and any practical issues associated with the repeal of transitional relief.
- Conditional institutional investor class relief: whether the proposed scope and conditions of the relief are clear, appropriate and workable, and whether the factors ASIC should consider in determining whether a financial service is principally provided from offshore are clear and appropriate.
ASIC also seeks feedback on the regulatory impacts of these proposals, including expected upfront and ongoing compliance costs or savings, and additional feedback in relation to the conditional class relief.
Submissions are due by 5pm (AEDT) on 4 December 2026.