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We are not joking – on 1 April 2026, the Federal Parliament really did pass laws to introduce new Australian financial services licence (AFSL) exemptions for foreign financial service providers (FFSPs).
After over a decade of uncertainty, FFSPs and their Australian clients will now have some certainty in relation to the FFSP AFSL exemptions, following the passing of the Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Act 2026 (Act).Schedule 2 of the Act sets out the new FFSP AFSL exemptions including the “comparable regulator exemption” and the “professional investor exemption”.
Background
- The passporting exemptions and limited connection exemption which have operated since 2003 to exempt certain FFSPs from the need to hold an AFSL when providing financial services to wholesale clients in Australia are due to expire on 31 March 2027 (see our earlier article of 5 December 2025).
- After several years of attempts to introduce legislation to replace the passporting exemptions and limited connection exemption with new FFSP AFSL exemptions, a fourth bill (the Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Bill 2025)was introduced in the Federal Parliament in November 2025 (see our article of 26 November 2025).
- Late last year this fourth bill was referred to the Senate Economics Legislation Committee and then reintroduced to Federal Parliament in March 2026.
Update
- This fourth bill has now been passed and gives effect to the following for qualifying FFSPs:
- the “comparable regulator exemption” (to effectively replace the passporting exemptions);
- the “professional investor exemption” (to effectively replace the limited connection exemption); and
- the “market maker exemption”.
- The date of the fourth bill changed from 2025 to 2026 during its passage through the Federal Parliament but there were no changes to Schedule 2 (which contains the terms of the FFSP AFSL exemptions).
- The Act is currently awaiting Royal Assent.
- The Act provides that the new FFSP AFSL exemptions will take effect 12 months after the day the Act receives Royal Assent.
- We anticipate that the transitional arrangements for the current FFSP AFSL exemptions (the passporting exemptions and limited connection exemption) may be extended from 31 March 2027 to the anniversary of the date that the Act receives Royal Assent, so that there is no gap between the FFSP exemptions.
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.
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