In brief
On 6 November 2026, ASIC released simple consultation CS 68. CS 68 relates to the implementation of the statutory framework covered in our April 2026 update which introduces new Australian financial services licence (AFS licence) exemptions for foreign financial services providers (FFSPs).
ASIC did not issue a consultation paper. Instead, it has released a draft regulatory guide and two draft instruments for comment.
In short, ASIC proposes to:
- extend the existing sufficient equivalence relief and limited connection relief for six more months so that the relief ends on 30 September 2027 rather than 31 March 2027
- publish a rewritten Regulatory Guide 176 explaining the new exemptions, their conditions and how to notify ASIC of an FFSP’s intention to rely on a new exemption
- scrap the funds management financial services relief before it commences (it is currently due to commence on 1 April 2027), on the basis that the new professional investor exemption replaces it
- end the foreign AFS licence regime by repealing the foreign AFS licensee instrument on 30 September 2027
- introduce new licensing relief for “follow the sun” operating models
The draft regulatory guide and supporting material explain that ASIC will accept notifications to rely on one of the new AFS licence exemptions through the ASIC Regulatory Portal (Portal) and no supporting documentation will be required.
The consultation period is open until 5pm on 4 December 2026. Any feedback can be provided to ASIC by email to: rri.consultation@asic.gov.au.
What FFSPs should do and when to do it by
Before 4 December 2026
- Decide whether to make a submission to ASIC, directly or through an industry body.
Before 8 April 2027
- Map every Australian-facing financial service you provide, the client type (professional investor or wholesale client) and the relief you rely on today.
- Consider the conditions of the new AFS licence exemptions.
- Determine the new exemption (or AFS licence) for each service, noting the current ASIC proposal that the funds management financial services relief be repealed before it commences.
- Set up your access to the Portal and gather the information needed for notification. Diarise the 30 business day notification window for each service.
Before 30 September 2027
- Complete your transition from sufficient equivalence or limited connection relief to a new exemption or an AFS licence.
- Foreign AFS licensees should decide whether to keep, vary or cancel their licence. If the licence is kept, arrangements will need to be in place to comply with new obligations that will apply.
What Australian superannuation funds, sovereign wealth funds and other investors should do
- Ask offshore managers and counterparties which exemption they will rely on from 8 April 2027 and when they will notify ASIC. Consider covering this in subscription documents and side letters.
- Confirm how each of your investing entities and vehicles is classified (professional investor, institutional investor or wholesale client), particularly vehicles that qualify only because they control $10 million.
- Expect to receive client notices from FFSPs relying on the new exemptions, and keep them on file.
- Watch for any regulations limiting the scope of the professional investor exemption.
A quick recap
For more than 20 years, many offshore banks, brokers and fund managers have provided financial services to Australian wholesale clients without holding an AFS licence under ASIC’s "sufficient equivalence" and "limited connection" relief. That relief has been extended many times while the Government developed a permanent solution.
That solution is Schedule 2 to the Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Act 2026 (Cth). Schedule 2 commences on 8 April 2027. It creates three new exemptions from the requirement to hold an AFS licence:
- Professional investor exemption: for services provided from outside Australia to professional investors only, with limited marketing visits allowed (28 days per representative each financial year, counting only days spent with clients or prospective clients).
- Comparable regulator exemption: for foreign companies and foreign partnerships that serve wholesale clients and hold the licences they need from a regulator the Minister has named as a "comparable regulator". This replaces sufficient equivalence relief.
- Market maker exemption: for making a market in derivatives traded on licensed markets prescribed by regulation.
Each of the new AFS licence exemptions requires the FFSP to provide a notice to ASIC (from 15 business days before to 15 business days after the service first starts) and to comply with ongoing conditions. These include reporting any breach of a condition to ASIC within 30 business days, with no materiality threshold. We covered the new law in more detail in our April 2026 update.
Key takeaways from CS 68
A) Proposed extension of transitional relief period cures the current 7 day gap and provides more time to consider the new AFS licensing exemptions
As the law stands today, the current transitional relief which applies to sufficient equivalence relief instruments and limited connection relief ends on 31 March 2027, but the new exemptions do not commence until 8 April 2027. That leaves at least a seven-day gap (1 to 7 April 2027) in which an FFSP relying on sufficient equivalence or limited connection relief would not have the benefit of one of the new AFS licence exemptions made available under the new statutory regime.
ASIC’s proposed extension closes that gap and provides FFSPs a transition window from 8 April 2027 to 30 September 2027. If the extension is implemented as proposed, during that window, FFSPs may continue to rely on their existing AFS licensing relief and prior to the expiry of the transition window, notify ASIC of reliance by each relevant entity on a new exemption, or apply for an AFS licence. If an FFSP applies for an AFS licence during the transition window and it is not granted before the expiry of the transition window, the FFSP would need to rely on an AFS licence exemption in the interim period before the AFS licence is granted, to continue providing financial services to Australian clients.
B) Notifications of reliance for the new AFS licence exemptions to be submitted on the ASIC Regulatory Portal and no supporting documentation is required
ASIC will accept notifications to rely on one of the new AFS licence exemptions through its online Portal. Some of the key points are as follows:
- one entity can notify reliance on several exemptions but each entity (including in the same group) seeking to rely on one or more exemptions must notify ASIC separately;
- supporting documents will not be needed;
- FFSPs will be asked to prepare and provide the following on the Portal:
- entity details, ARBN or foreign registration number
- head office and principal place of business
- primary contact details
- jurisdiction(s) of service origin and/or the jurisdiction(s) in which the FFSP is authorised
- Australian agent details (where relevant)
- the exemption(s) that the FFSP proposes to rely on
- the financial service(s) to be provided by the FFSP (and product types to which those services relate)
- the date the FFSP will start to provide the financial services in reliance on the relevant exemption(s)
Unlike the existing professional investor and sufficient equivalence relief, the statutory framework which introduces the new professional investor and comparable regulator exemptions does not generally restrict the scope of the exemptions to certain financial services or financial products unless regulations are introduced to do so. However, it appears that the notification process will require FFSPs to specify the scope of services and products to be provided by the FFSP under the relevant exemption(s). This requirement will need to be dealt with carefully, as it could in practice limit the scope of services and products an FFSP can provide under a new exemption.
In contrast to the current sufficient equivalence exemptions, it appears that supporting documents will not be required to be lodged. The FFSP can meet relevant exemptions conditions by confirming its agreement in the Portal approved form (for example, consenting to information sharing between ASIC and the comparable regulator and agreeing to submit to the non-exclusive jurisdiction of the Australian courts).
ASIC does not say if additional requisitions may be issued to the FFSP during the notification process.
C) ASIC proposes to end the foreign AFS licence regime by repealing the foreign AFS licensee instrument on 30 September 2027
ASIC has issued a draft instrument which, if implemented in its current form, will repeal the foreign AFS licensee instrument on 30 September 2027.
The repeal of the foreign AFS licensee relief instrument will not cancel existing foreign AFS licences. A foreign AFS licensee may retain its AFS licence but it will convert to a standard AFS licence. Consequently, the full suite of obligations that apply to standard AFS licensees will apply to each foreign AFS licence that is not cancelled before 1 October 2027.
A decision to retain or cancel a foreign AFS licence should involve a comprehensive assessment of whether the foreign AFS licensee is able to comply with the significant uplift in obligations that will apply to it post cancellation of the foreign AFS licensee relief.
Foreign AFS licensees may instead decide to cancel their licences and transition to one of the new AFS licence exemptions.
D) ASIC proposes to issue narrow licensing relief for “follow the sun” operating models
ASIC recognises that some global financial services groups run “follow the sun” operating models, where staff in Australia support services that are run and supervised offshore. Where those services are provided from within Australia the professional investor exemption is unlikely to apply. In summary, the draft instrument issued by ASIC would provide AFS licensing relief to permit limited implementation of such operating models in Australia, without an AFS licence, in circumstances where:
- the FFSP carries on its business predominantly outside Australia;
- an Australian-based individual representative supports the provision of the service because of time-zone differences, and the service as a whole is mainly provided from offshore;
- the FFSP has a related body corporate that holds an AFS licence covering the provision of the financial service and is responsible and liable for the provision of the financial service by the Australian-based representative; and
- the FFSP ensures the service is provided efficiently, honestly and fairly.
The relief does not apply if the service relates to a product traded on a designated financial market or to an investment located in Australia, if the revenue and expenses are booked in Australia, or if substantive responsibility or supervision sits in Australia.
Importantly, the relief is only available for services provided to "institutional investors". This is the professional investor definition minus the category of persons who qualify only because they control at least $10 million.
Before utilising a representative in Australia, FFSPs should identify if any other Australian law consequences may arise from doing so, such as having to register with ASIC as a foreign company if carrying on business in Australia.
E) ASIC proposes to repeal funds management financial services relief before it commences
The funds management financial services relief has been deferred many times and was due to commence on 1 April 2027. ASIC proposes to repeal it before then, because it considers the professional investor exemption replaces it. This proposal will be a new development for many FFSPs and their clients.
The funds management financial services relief was narrow and had some technical limitations. If implemented, it would have permitted the provision of defined “funds management financial services” only to a short list of "eligible Australian users" (broadly, superannuation trustees of funds with net assets of at least $10 million, APRA-regulated bodies, responsible entities, certain wholesale trust trustees and exempt public authorities other than local councils), and was drafted so that only FFSPs regulated by an IOSCO multilateral MOU signatory may obtain the benefit of the AFS licensing relief it would provide. By contrast, the professional investor exemption permits the provision of any and all financial services to all categories of professional investors (as defined under the Corporations Act), and does not require the FFSP to be regulated by any particular foreign regulator.
If the repeal of this relief instrument is implemented, fund managers and others who planned to rely on it will need to consider an alternative licensing solution.
F) No comparable regulators named yet, and AFS licence issues for fund vehicles
As at the release of CS 68, no comparable regulators have been named, and no licensed markets have been prescribed for the market maker exemption. ASIC’s draft regulatory guide confirms that an FFSP from a jurisdiction without a named regulator cannot rely on the comparable regulator exemption. The same list also forms the basis for the new "fast track" exemption from the fit and proper person test for AFS licence applications.
The Explanatory Memorandum suggests that the first list is likely to include the US SEC, the Federal Reserve and OCC, the CFTC, the Monetary Authority of Singapore, the Hong Kong SFC, BaFin, Luxembourg’s CSSF, the UK FCA and PRA, the Danish FSA, Sweden’s Finansinspektionen, France’s AMF and ACPR, and the Ontario Securities Commission. We also understand that the list is likely to include Norway’s Finanstilsynet. Until the list is made, however, this remains an expectation only.
ASIC also recognises that various types of financial services and products defined under Australian law may not exactly match the way financial services and products are provided in other jurisdictions and that they will generally follow the definitions under Australian law in considering whether a person holds an appropriate licence or authorisation in the foreign jurisdiction. This means it will be important to consider and seek advice on how foreign licences or authorisations ‘equate’ to relevant financial services and products in Australia.
For funds, there is a further issue. The comparable regulator exemption requires the person providing the service to hold the licences and authorisations it needs from a comparable regulator. In many fund structures the manager is licensed or otherwise authorised by a regulator, but the fund vehicle or its general partner is not. Where the vehicle (or its general partner or trustee) provides financial services itself, it must obtain an AFS licence or the benefit of an AFS licence exemption.
At paragraph 16, ASIC’s draft guide states that:
“The requirement to hold any authorisations, registrations, or licences only applies where there is a specific requirement in the comparable jurisdiction that an entity must hold an authorisation, registration, or licence to provide the same or substantially the same financial service. If it would otherwise be legal to provide that financial service in the comparable jurisdiction without an authorisation, registration or licence, you are not required to hold a relevant authorisation, registration or licence in order to rely on the comparable regulator exemption.”
We consider that the intended breadth of this statement warrants further inquiry. For instance, which regulator “administers” the relevant licensing regime for an unlicensed vehicle, and must that regulator be a named comparable regulator for the purposes of the exemption? Questions such as these will be important to resolve noting that if an FFSP is unable to rely on the comparable regulator exemption, it will be limited to providing financial services to a more limited subset of wholesale clients, being professional investors under the professional investor exemption (to the extent the FFSP is able to satisfy the conditions of that exemption).
Note that trusts and contractual funds that are neither companies nor partnerships do not themselves fit within the comparable regulator exemption as the FFSP must be a “foreign company” or “partnership”.
G) Important guidance from ASIC in the draft regulatory guide
The draft regulatory guide provides some important guidance regarding the new AFS licence exemptions and conditions. By way of example, the regulatory guide:
- (at para 47) clarifies that relying on the comparable regulator exemption does not, of itself, require an FFSP to register as a foreign company
- (at para 37) provides factors that may be relevant in assessing whether the financial services business you carry on is predominantly in Australia for the purposes of considering the application of the condition to ensure that financial services provided in reliance on an exemption are provided efficiently, honestly and fairly
- (at para 22) suggests that FFSPs relying on the professional investor exemption should maintain records of their representatives’ marketing visits to Australia (note that the regulatory guide does not provide guidance as to whether the “marketing visits” label limits the scope of services that may be provided by the representative while relying on the exemption)
- (at para 23) notes that to rely on the professional investor exemption or the market maker exemption, you must reasonably believe that providing the same or substantially the same financial services as you intend to provide in Australia would not contravene any law applying in the place from which you are providing the financial service, where your head office or principal place of business is located. A “reasonable belief” requires the existence of facts sufficient to create such a belief in a reasonable person in your position. For example, you could undertake reasonable inquiries, including obtaining legal advice (if necessary), to determine whether you have complied with this condition
- (at paras 41-45) provides guidance on the requirement to notify ASIC under the comparable regulator exemption of significant enforcement actions, disciplinary actions and investigations in other jurisdictions
The draft regulatory guide does not provide clarity on one important requirement in the Explanatory Memorandum relating to the comparable regulator exemption. The Explanatory Memorandum states that a financial service may only be provided from within Australia, the jurisdiction of the comparable regulator or another jurisdiction in which the comparable regulator is able to regulate the FFSP. We refer to this requirement in our April 2026 update.
