Australian licensing relief for foreign financial service providers postponed by Federal election

Licensing exemptions for foreign financial services providers (FFSPs) which were expected to become law will be postponed again.

The reforms were contained in the Treasury Laws Amendment (Miscellaneous Measures) Bill 2024, which were before the upper House of the Federal Parliament for approval. However, with the Australian Government calling a Federal election today, Parliament is prorogued and all Bills not passed into legislation now lapse. Although the Senate has a right to meet following the prorogation, it has not historically exercised this right and it is unlikely that this will occur before the general election on 3 May 2025.

The Bill will not automatically be restored to the stage it had previously reached following the election and must be reintroduced in the next Parliament. There is currently no certainty when (or if) that will happen. In the meantime, ASIC’s transitional relief arrangements remain in place and it is possible that it extends these to provide clarity for FFSPs.

With the information we have at this stage, FFSPs may wish to consider the following options:

• Entities which currently rely on the sufficient equivalence relief or limited connection relief may continue to do so until 31 March 2026.

• Entities which propose to begin providing a financial service for the first time before 1 April 2026 may rely on the limited connection relief, if eligible.

• For all other entities, FFSPs may apply to ASIC for temporary individual licensing relief from the requirement to hold an AFS licence.

Please don’t hesitate to contact us if we can assist you with any of the above.