You can see the rules and regulations in other jurisdictions.
ASIC has entered into a range of cooperation agreements with international regulators to take a closer look at the approach taken by fintech companies in other countries, in order to bring fairness to the manner in which these businesses are treated across borders. These cross-border arrangements assist with information gathering on market movements and trends, referrals of fintech entities, and results from proof of concepts and innovation challenges. Moreover, some agreements seek to gain better insight into how fintech ventures are regulated elsewhere, so that they will be addressed equitably in different regions.1
Exemption from a comparable regulator. Generally, foreign financial services providers (FFSPs) in Australia have relied on ASIC's passport exemption from the requirement to hold an AFSL in order to provide financial services to wholesale clients. In March 2020, the passport relief was repealed (subject to a 24-month transition period) and replaced with a new regime that required FFSPs to apply for a foreign AFSL (i.e., a modified form of an AFSL). In 2021 the Australian government declared that it would weigh up options to bring back a reworked edition of the passport exemption. Following a primary consultation period, the Treasury published draft rules (the Draft FFSP Bill) seeking to execute a 'comparable regulator exemption'. This measures up to the erstwhile passport exemption, accompanied with revised conditions and an augmented list of certified jurisdictions. Post the consultation for the Draft FFSP Bill which finished on 12 January 2022, at present it has not been established into law.1
Professional investor exemption. Australia has an AFSL exemption enabling Foreign Financial Service Providers (FFSPs) to provide a range of financial services to professional investors from outside the country. The Draft FFSP Bill suggests broadening this exemption, so long as certain conditions concerning the FFSP's physical operation are met. The consultation around the Draft FFSP Bill ended on 12 January 2022 and is yet to become legislation.1
FFSPs not carrying on business in Australia that are deemed to be conducting financial services activities due to inducing people from Australia to use their services can avail of 'limited connection relief'. Nevertheless, the Australian Securities and Investment Commission (ASIC) has announced that this relief will expire on 31 March 2023, a decision which is also upheld in the Draft FFSP Bill.1
Australian presence. To conduct business in Australia, foreign businesses, including fintechs, must register with ASIC if they wish to access Australian customers. It is possible to establish a local presence (e.g., incorporate an Australian subsidiary) or establish a branch office in Australia. An entity is more likely to be required to register in Australia if its business activities are more systemic, repetitive, or continuous.1
When it comes to marketing foreign financial services, if the initial contact has come from an Australian customer then an offshore provider can usually address questions, pitch and distribute products. In circumstances where the approach was unsolicited and involved credit activities that are regulated by the National Credit Act, the provider must have an ACL regardless of how it was contacted.1
The flow of foreign currency into or out of Australia is not restricted by foreign exchange or currency control. AUSTRAC, however, requires cash reporting. To control tax evasion, money laundering and organised crime, AUSTRAC must receive reports of transfers of $10,000 or more (or the equivalent in foreign currency) and suspicious transactions from reporting entities (such as banks, building societies, and credit unions). According to AUSTRAC, reporting entities must also submit an annual AML/CTF compliance report unless an exemption applies, which collects information about whether a reporting entity's risk assessments and compliance programs are appropriate for money laundering and terrorism financing.1
