There is welcome news for Foreign Financial Service Providers (FFSPs). After years of regulatory uncertainty, Australia has now established a clear and enduring pathway for FFSPs seeking exemption from the Australian financial services licensing (AFSL) regime.
These exemptions were introduced by Schedule 2 to the Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Act 2026 (Cth) (Act). The Act passed both Houses of Parliament on 1 April 2026 and received Royal Assent on 8 April 2026. The new exemptions will commence 12 months after assent.
The Act amends the Corporations Act 2001 (Cth) to embed three FFSP licensing exemptions directly into legislation, replacing the transitional relief regime that ASIC has extended multiple times in recent years.
While the current transitional relief is due to expire on 31 March 2027 (see ASIC’s announcement), it is anticipated this may be aligned with the new regime’s commencement date of 8 April 2027 to avoid any regulatory gap.
The new exemptions
Under the new framework, FFSPs will not be required to hold an AFSL where they fall within one of the following exemptions (and meet the relevant conditions):
- Comparable regulator exemption – available to FFSPs regulated by a foreign regulator assessed by the relevant Australian Minister as comparable, allowing services to be provided to wholesale clients in Australia.
- Professional investor exemption – permits FFSPs to provide financial services to Australian clients, provided those services are limited to professional investors.
- Market maker exemption – applies where an FFSP makes a market for derivatives that are able to be traded on a prescribed licensed market.
What this means for FFSPs
For FFSPs currently relying on historical exemptions or transitional relief, this reform provides long-awaited certainty. However, it also presents a timely opportunity to reassess existing arrangements and ensure activities align with the scope and conditions of the new statutory regime.
For those considering entering the Australian market, the introduction of a permanent framework removes a key barrier and offers greater confidence in planning Australian operations.
Next steps
If you are currently relying on transitional relief, or are considering providing financial services in Australia, now is the time to review your position and prepare for the transition to the new regime.
Our financial services team would be pleased to assist you in navigating these changes and ensuring compliance with the new framework.