More uncertainty in relation to the bill to enact FFSP AFSL exemptions

Summary

The bill to enact new FFSP AFSL exemptions did not pass the Senate on the last sitting day of the year, Friday 29 November 2024.  

If the next general election has not been called before 4 February 2025, Parliament will resume on that date and will be in a position to consider a revised form of the bill in the remaining sitting days before the election is called. If the bill is not passed before the election is called then the bill will lapse.  

Background

• The passporting exemptions and limited connection exemption from the need to hold an Australian financial services licence (AFSL) that have been used by foreign financial services providers (FFSPs) since 2003 are due to expire on 31 March 2026 (see our earlier article of 31 July 2024).
• A bill was introduced into Parliament to introduce new FFSP exemptions in 2022 but that bill lapsed on the calling of the general election in 2022 (see our earlier article of 11 April 2022).
• In November 2023, following a change in Government, a second bill was introduced into Parliament, to introduce new AFSL exemptions for FFSPs (see our article of 30 November 2023) (Bill).
• In early 2024, the Senate Economics Legislation Committee considered the draft Bill (see our article of 16 February 2024). The Committee delivered its report on the draft Bill on 10 May 2024, which recommended the Bill be passed and noted there was “widespread support” for the AFSL exemptions for FFSPs (see our article of 10 May 2024).
• The Bill was agreed to by the House of Representatives on 9 October 2024, and subsequently introduced and read for the first time by the Senate on 10 October 2024.

Update

The Bill included a superannuation related tax change which was unrelated to the FFSP AFSL exemptions and which has proven to be controversial, with the result that the Bill was not passed by the Senate on the last sitting day of the year, Friday 29 November 2024. 

The Senate has now divided the Bill into two separate bills.

The new Treasury Laws Amendment (Miscellaneous Measures) Bill 2024 (New Bill) contains the provisions relating to the FFSP AFSL exemptions (but not the superannuation related tax changes which are in a separate bill).

If the next general election has not been called before 4 February 2025, Parliament will resume on that date and will be in a position to consider the New Bill in the remaining sitting days before the election is called (expected to be up to 10 sitting days).  

If the New Bill is not passed before the election is called then the New Bill will lapse, as occurred in 2022.

The general election must be held at the latest by 24 May 2025.