Ongoing licensing relief granted
The securities watchdog has announced it will formalise ongoing licensing relief to trustees of wholesale equity schemes, making them exempt from having to hold an Australian Financial Services (AFS) licence when providing wholesale equity financial services.
Australian Securities andInvestments Commission (ASIC) Class Order 08/040 makes the interim licensing relief previously released in Class Order 07/74 ongoing.
Along with the change, ASIC has released Regulatory Guide 192, entitled ‘Licensing: wholesale equity venture capital scheme: trustee licensing’, which explains the licensing relief in Class Order 07/74.
Despite wholesale equity schemes having to be operated by a fund manager that already holds an AFS licence, under licensing provisions in the Corporations Act, the trustee of each of the multiple trusts in a wholesale equity scheme would be required to hold an AFS licence.
Consequently, ASIC provided a temporary exemption after it considered that requiring each trustee to hold an AFS would impose a disproportionate cost burden, especially since the fund manager that already holds an AFS licence would take responsibility for the scheme.
AUTHOR
George Liondis
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