FFSP AFSL Exemptions Bill referred to Senate Economics Legislation Committee

Background 

On 30 November 2023, the Treasury Laws Amendment (Better Targeted Superannuation Concessions) Imposition Bill (Bill) was tabled in the House of Representatives, which included new exemptions from holding an Australian financial service licence (AFSL) for foreign financial service providers (FFSPs). 

The tabled Bill was slightly different to the exposure draft which was published by Treasury for consultation in August 2023 as noted in our article here. 

Status update  

We have made a submission to the Senate Economics Committee that we would support an amendment to section 911F to insert an express requirement that regulations may only disapply the professional investor exemption in relation to particular kinds of financial products, financial services or professional investor ‘in exceptional circumstances’. 

We do not expect any further legislative progress on the Bill until after the Senate Economics Committee releases its report, expected to be around 19 April 2024. 

We will continue to monitor the status of the Bill in the coming weeks. 
 

• On 30 November 2023, the Bill was introduced, and had its second reading moved. 
• On 7 December 2023, the Bill was referred to the Senate Economics Legislation Committee (Senate Economics Committee) for consideration “to carefully investigate this legislation and provide interested stakeholders with the opportunity to comment on the legislation”. A report is expected from the Senate Economics Committee around 19 April 2024. Interested persons are able to make submissions by no later than 23 February 2024. Details of how to make a submission can be found here. 
• In January 2024, the Bill was considered by the Senate Standing Committee for the Scrutiny of Bills (Scrutiny Committee). 
  • The Scrutiny Committee considered the proposed section 911F in the Bill, which enables regulations to modify the operation of the primary legislation (akin to a “Henry VIII clause”) by narrowing the scope of the ‘professional investor’ exemption, by passing regulations to provide that the ‘professional investor’ exemption cannot be used in relation to particular kinds of financial products or services, or investors. 
  • The Scrutiny Committee noted that the explanatory memorandum to the Bill stated that the proposed section 911F powers would only be exercised in ‘exceptional circumstances’ and asked the Treasurer:
    • what would constitute ‘exceptional circumstances’, and to provide examples and whether there is any guidance or relevant matters to be considered in exercising this regulation power; and
    • whether proposed section 911F of the Bill can be amended to include an express requirement that the regulations may only prescribe financial products, services, or classes of such as, being exempt from the professional investor exemption ‘in exceptional circumstances’.