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On 26 November 2025, Parliament introduced a new bill to enact new foreign financial service provider (FFSP) exemptions to the need to hold an Australian financial services licence (or AFSL).
Background
- The passporting exemptions and limited connection exemption which operate to exempt foreign financial services providers (FFSPs) from the need to hold an Australian financial services licence (AFSL) when providing financial services to wholesale clients in Australia and are due to expire on 31 March 2026 (see our earlier article of 31 July 2024).
- In 2022 the Government had proposed a bill to introduce legislation to replace the passporting exemptions and limited connection exemption with new FFSP exemptions called the 'comparable regulator exemption' and the 'professional investor exemption'.
- The 2022 bill lapsed on the calling of the general election in 2022 (see our earlier article of 11 April 2022).
- A second bill to introduce the new FFSP exemptions was introduced into Parliament in 2023 (see our earlier article of 30 November 2023).
- The second bill contained some contentious superannuation reforms and so was split in late 2024 so that the FFSP exemptions could be proposed again in Parliament in a stand alone third bill: the Treasury Laws Amendment (Miscellaneous Measures) Bill 2024 (Third Bill).
- The Third Bill was not passed before the 2025 general election was called, and lapsed (see our article of 28 March 2025).
- On 26 November 2025, a fourth bill was introduced by the Government to legislate the new FFSP exemptions: the Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Bill 2025 (Fourth Bill).
- Update
The FFSP exemptions contained in the Fourth Bill are very similar to those in the Third Bill but there are two key changes:
- The Fourth Bill has removed section 911H(3) which had provided
that the assistance that the Australian Securities &
Investments Commission (ASIC) may reasonably
request from the FFSP may include the FFSP showing ASIC its books
or giving ASIC a copy of its books.
- This is a pleasing development for FFSPs who were concerned that it would not be proportionate or reasonable for ASIC to have access to their books relating to their whole business just because of the FFSP's use of these exemptions or that ASIC's access to their books may conflict with the laws of the FFSP's home jurisdiction.
- Under the Fourth Bill, for ASIC to access the books of a FFSP under section 911H(2), that access must be reasonably requested in relation to the performance of ASIC's functions or exercise of ASIC's powers.
- FFSPs using the professional investor exemption do not have to agree to the jurisdiction of the Australian courts and laws for any proceedings brought by ASIC or another Commonwealth body (section 911H(3) has been removed).
If the Fourth Bill is passed, the FFSP exemptions in it will come into force 12 months after the Fourth Bill receives Royal Assent.
ASIC has not yet announced a further extension of the transitional arrangements for the current FFSP AFSL exemptions (the passporting exemptions and limited connection exemption), which are set to expire on 31 March 2026. If the Fourth Bill is passed, it is expected that the current transitional arrangements will continue until the Fourth Bill comes into force.
We will continue to monitor the status of the Fourth Bill and provide an update when one becomes available.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
