FFSP AFS licensing exemptions reintroduced in Australian Parliament

The Federal Government yesterday introduced the Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Bill 2025 (Amendment Bill). Schedule 2 to the Amendment Bill – “Licensing exemption for foreign financial service providers” – sets out the Government’s proposed legislative exemption for foreign financial service providers (FFSPs).

Prior to the 2025 election, the previous government attempted to introduce substantially the same reforms as set out in Schedule 2 to the Amendment Bill in Schedule 7 of the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 (Previous Bill). However, the Previous Bill was not passed before the dissolution of Parliament for the 2025 election. Schedule 2 to the Amendment Bill represents the most recent development in the review of the FFSP regulatory regime that ASIC commenced in 2016.  

A person that carries on a financial services business in Australia must hold an Australian financial services (AFS) license in accordance with section 911A(1) of the Corporations Act 2001 (Cth) (Corporations Act). Schedule 2 to the Amendment Bill provides FFSPs with three exemptions to the Corporations Act requirement to hold an AFS license. These include exemptions from the requirement to hold an AFS license for persons:

1. that provide financial services from outside Australia to professional investors (Professional Investor Exemption);
2. regulated by comparable regulators and that provide financial services in Australia to wholesale clients (Comparable Regulator Exemption); and
3. that provide financial services that involve making a market for derivatives that can be traded on a specified licensed market (Market Maker Exemption),

(together, the Proposed Changes).

For more details on the Proposed Changes, please see our previous article published on 6 December 2023, ‘FFSP AFS Licensing exemptions tabled in the Australian Parliament’. 

Currently, the Australian Securities and Investments Commission (ASIC) has temporary relief in place for FFSPs providing financial services in Australia. This temporary relief is set to expire on 31 March 2026. While the new regime proposed by Schedule 2 to the Amendment Bill will replace this relief, it is expected that ASIC will extend the current relief period until 31 March 2027. We expect ASIC to announce this shortly.