ASIC makes unique AFSL decision on foreign adviser

In outlining its latest decision on relief applications from April to September, ASIC said it granted relief to an adviser regulated by the Ontario Securities Commission in Canada from the requirement to hold an AFSL.

The applicant’s clients had requested the adviser continue to act for them for the purposes of maintaining their existing retirement and education accounts in Canada and withdrawing monies from those accounts.

ASIC said it granted relief on the basis of the unique and limited circumstances given the legal uncertainty surrounding whether the applicant could rely on the exemption in s911A(2A).

At the time relief was sought, the applicant’s clients held temporary work visas and had lodged applications for permanent residency in Australia.

However, the clients were yet to be granted Australian permanent resident status.

“Section 911A(2A) as modified by reg 7.6.02AG of the Corporations Regulations 2001, provides an exemption from the requirement to hold an AFS licence for an overseas provider of a financial service to a client in Australia as long as the provider does not engage in conduct that is intended to induce people in Australia to use the service or is likely to have that effect,” ASIC noted.

“The client must either be an Australian citizen or an Australian resident.”

ASIC said it made the decision as part of efforts to reduce red-tape and achieve a practical, positive outcome for companies seeking regulatory flexibility.

“The granting of relief, which has a net regulatory benefit, or which facilitates business or cuts red tape without harming stakeholders, is an important part of ASIC’s regulatory function and demonstrates our commitment to helping the law work better for businesses,” ASIC said.

Adrian Flores

Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.

You can contact him on [email protected].