Foreign financial service providers still waiting for licensing clarity, but new Bill offers some hope

The Australian regulatory landscape for foreign financial service providers (FFSPs) has been the subject of future uncertainty for some time. Currently, many FFSPs from sufficiently equivalent jurisdictions can rely on an exemption to holding an AFS licence where they provide financial services to Australian wholesale clients under ASIC Corporations (Amendment) Instrument 2024/497. However, this relief is set to expire on 31 March 2026 and has not been extended.

Last week, a new Bill was introduced into Federal Parliament to propose new licensing exemptions for FFSPs seeking to provide financial services to investors in Australia. The Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Bill 2025 substantially reintroduces the exemptions in the Superannuation (Better Targeted Superannuation Concessions and Other Measures) Imposition Bill 2023, which was first introduced in November 2023 but lapsed earlier this year.

If passed, the Bill will create three new licensing exemptions, replacing the current limited connection relief and sufficient equivalence relief regimes. However, these amendments will only take effect 12 months after Royal Assent. ASIC is expected to make an announcement regarding the extension of the transitional relief shortly, which will hopefully provide FFSPs with clarity on the licensing regime come 31 March 2026. With the introduction of the new Bill, we expect ASIC to extend the current transitional relief, although no announcement has been made yet. If, however, it doesn't, FFSPs currently relying on the relief to provide financial services to Australian wholesale clients will need to consider their options for continuing to provide financial services to persons in Australia post-31 March 2026.

We will update you once ASIC has made its announcement.