Key points

• The Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Bill 2025 (the Bill) contains amendments in 4 separate areas.
• Schedule 1 will amend the Insurance Contracts Act 1984 to create a strict liability offence and civil penalty to prohibit insurers from using protected genetic information in making life insurance contract decisions (as well as making a related amendment to the Disability Discrimination Act 1992).
• Schedule 2 will amend the Corporations Act 2001 to provide certain foreign financial services providers exemptions in relation to the requirement to hold an Australian financial services licence and an exemption from the ‘fit and proper person’ test in an application for a Australian financial services licence.
• Schedule 3 standardises legislative provisions, particularly appropriation provisions, in relation to Australia’s contributions to a range of multilateral development banks and the International Monetary Fund.
• Schedule 4 will repeal a legislated requirement that financial advisers annually register with the Australian Securities and Investment Commission, which is scheduled to commence on 1 July 2026. This requirement was originally legislated in 2021 in response to a recommendation of the Hayne Royal Commission that financial advisers should be required to register.
• On 27 November 2025, the Bill was referred to the Senate Economics Legislation Committee for inquiry and report by 26 February 2026. Submissions closed on 21 January 2026.

Introductory Info

Date of introduction: 26 November 2025
House introduced in: House of Representatives
Portfolio: Treasury
Commencement: The amendments in Schedule 1 commence 6 months after Royal Assent. The commencement of the amendments in the other schedules is outlined below.

Purpose of the Bill

The purpose of the Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Bill 2025 (the Bill) is to amend the Insurance Contracts Act 1984 (IC Act) to prohibit insurers from using certain genetic testing information in life insurance contract decisions as well as making a related amendment to the Disability Discrimination Act 1992 (DD Act).

The Bill will also:

• amend the Corporations Act 2001 to establish exemptions to the requirements to hold an Australian financial services licence (AFS licence) for certain foreign financial service providers and an exemption from the ‘fit and proper person’ test in applications for AFS licences (Schedule 2)
• make amendments to a range of legislation relating to Australia’s contributions to multilateral development banks (MDBs) and the International Monetary Fund (Schedule 3)
• repeal a requirement (derived from a Hayne Royal Commission recommendation) that financial advisers should register annually with the Australian Securities and Investment Commission (ASIC) before it comes into effect on 1 July 2026 (Schedule 4).

On 27 November 2025, the Bill was referred to the Senate Economics Legislation Committee for inquiry and report by 26 February 2026. Submissions closed on 21 January 2026.

Key provisions and issues

Schedule 1—Limiting the use of genetic information by life insurers

Background

The use of genetic information by the insurance industry has been a longstanding area of policy concern. In 2003, the Australian Law Reform Commission (ALRC) inquiry report Essentially Yours into the protection of genetic information included recommendations that a ‘range of safeguards and improved policies and practices should be applied to the insurance industry’s use of genetic information (including family history) for underwriting purposes’ (p. 36). While there was some support for a ban on the use of genetic information, the ALRC’s view was that ‘a departure from the fundamental principle underlying the market in voluntary, mutually rated personal insurance in Australia, namely, equality of information between the applicant and the insurer, cannot be justified at this time.’ (p. 691)

In 2018, a Parliamentary Joint Committee on Corporations and Financial Services (PJCCFS) inquiry report into the Life Insurance Industry recommended that the Financial Services Council (FSC), in consultation with the Australian Genetic Non-Discrimination Working Group, assess the consumer impact of imposing a moratorium on life insurers using predictive genetic information (Recommendation 9.1).

In 2019, the FSC introduced an industry-based Moratorium on Genetic Testing which limited the use of genetic test results when assessing applications for life insurance up to prescribed policy limits. For example, life insurers would not be able to use genetic test result information for policies up to thresholds of $500,000 for death or total permanent disability. However, above the specific thresholds, genetic testing results could be requested or used by an insurer. In July 2023, the Moratorium was included as Appendix A of the Life Insurance Code of Practice (currently under review).

In June 2023, Monash University published the Final Stakeholder Report from a study titled ‘(A‑GLIMMER) Australian Genetics & Life Insurance Moratorium: Monitoring the Effectiveness and Response’. The report found that the Moratorium was ‘inadequate to address and prevent genetic discrimination in life insurance’ and recommended that it should be ‘replaced with a legislative model of prohibition.’ (p. 5)

Between November 2023 and January 2024, the Treasury consulted on use of genetic testing results in life insurance underwriting. The consultation paper (Use of Genetic Testing Results in Life Insurance Underwriting) noted that the Monash University study had found that the ‘existing moratorium continues to discourage consumers from participating in both established clinical genetic testing, which may identify a need for potentially life-saving treatment, and medical research involving genetic testing.’ (p. 4)

In September 2024, the Albanese Government announced it would ‘end the ability to discriminate based on adverse predictive genetic test results by banning their use in life insurance underwriting’:

This decision places Australia as a world leader in removing barriers to genetic testing by stopping the use of adverse predictive test results in life insurance.

Advocates have campaigned for this change over the last decade. The Government has taken this step in partnership with the community to support Australians.

This ban is underpinned by extensive stakeholder engagement and consultation, and will ensure that all Australians can reap the benefits offered by this technology. Consumers will still be able to choose to disclose a favorable genetic test result.

Further consultation on the proposed ban was undertaken by Treasury in February 2025 and draft legislation was released for consultation in September 2025.

Key issues and provisions

Part 1—Main amendments

Key definitions

The main amendment in Part 1 will be inserting a new Division 5 regulating the use of protected genetic information in relation to contracts for life insurance in Part IV of the IC Act which currently addresses disclosures and misrepresentations.

In particular, proposed section 33F will define protected genetic information about an individual as information about:

• whether an individual (or a genetic relative) has undergone, intends to undergo, or has been recommended to undergo, genetic testing
• any genetic testing undergone by the individual (or genetic relative), including the results of such testing.

However, the scope of this term will usually not extend to where there has been a clinical diagnosis of a disease based on or informed by genetic testing (definitions of these terms will be inserted into section 11 and proposed section 33E).

Other key definitions are also inserted into section 11 of the IC Act. The term life insurance contract decision means where an insurer decides:

• whether or not to enter, or offer to enter into, a proposed contract of life insurance
• the terms and conditions on which the insurer enters, or offers to enter into, a proposed contract of life insurance
• whether or not to propose or accept an extension, variation or reinstatement of a contract of life insurance
• the terms or conditions on which the insurer proposes or accepts an extension, variation or reinstatement of a contract of life insurance.

The Explanatory Memorandum (EM) states this broad definition is ‘intended to capture the full range of decisions an insurer may make in relation to an insured’s application for a contract of life insurance …’ (p. 13)

The term life insurance underwriting is also inserted in section 11 meaning ‘any assessment of risk associated with an individual that is intended to inform a life insurance contract decision’.

Strict liability offence and civil penalty

Proposed section 33H will create both a strict liability offence and civil penalty for insurers who use protected genetic information in life insurance underwriting.

The strict liability offence (proposed subsection 33H(1)) would be committed where:

• an insurer makes a life insurance contract decision in relation to a contract of life insurance or proposed contract of life insurance
• in making that decision, the insurer takes into account the results of underwriting conducted in relation to a life insured and
• protected genetic information about the life insured was solicited or used for the purpose of the underwriting by the insurer or any other person who conducted or assisted with the underwriting.

The term solicit is broadly defined in proposed section 33G to mean where a person:

• requests, incentivises or otherwise induces or encourages another person to provide protected genetic information or to provide a kind of information that includes protected genetic information
• requests or recommends that an individual undergo genetic testing whether or not the individual undergoes the genetic testing.

The maximum penalty for the strict liability offence would be 60 penalty units ($19,800).

Contravention of the civil penalty (proposed subsection 33H(2)) incorporates the same elements as the strict liability offence. The maximum civil penalty provided in the proposed provision is 5,000 penalty units ($1,650,000). However, section 75D, which provides for higher pecuniary penalties in some circumstances, particularly for body corporates, will apply. The amount of a penalty unit (currently $330) will be indexed on 1 July 2026 (section 4AA, Crimes Act 1914).

There will be an exception to both the strict liability offence and the civil penalty where a person being life insured, their treating medical practitioner or their agent consents to providing the protected genetic information (proposed subsection 33H(3)). This requires that the protected genetic information was not solicited by the insurer (or underwriter), that appropriate written consent was obtained, and that the use of the information does not ‘disadvantage the insured, any life insured or any third party beneficiary under the contract’ in relation to the life insurance contract decision.

Review of the operation of the provisions

Proposed section 33J provides for regular reviews of the operation of the provisions to be inserted by the Bill. The reviews must consider whether the provisions are ‘effective in providing reasonable certainty to individuals about the use of protected genetic information in relation to contracts of life insurance’ and have ‘any unintended consequences’. The reviews must be conducted ‘after each fifth anniversary of the commencement’ and tabled by the Minister in each House of the Parliament within 15 sitting days.

Part 2—Other amendments

Part 2 contains other related amendments to the IC Act and the DD Act. In particular, section 46 of the DD Act provides certain exemptions for discrimination on the basis of disability in refusing to offer, or the terms and conditions of, superannuation and insurance where this is based upon actuarial or statistical data and is ‘reasonable’. Item 5 would insert proposed subsection 46(3) which would limit these exemptions in relation to life insurance policies by providing that ‘… discrimination based on protected genetic information… about a person is taken not to be reasonable…’

The Bill will amend the duties concerning disclosure and misrepresentation in the IC Act to reflect the restriction on the use of protected genetic information in life insurance contract decisions. Section 20B imposes a duty on the insured to take reasonable care not to make a misrepresentation to an insurer before a contract of insurance is entered into. Item 7 inserts proposed subsection 20B(5A) to clarify it is not a misrepresentation to not disclose protected genetic information for contracts of life insurance. Similarly, proposed subsection 21(3A) will provide the insured’s duty of disclosure in section 21 ‘… does not require the disclosure of protected genetic information about a life insured’.

Proposed section 25A also provides that an insured is not taken to have made a misrepresentation before a contract of life insurance was entered into merely because the insured did not disclose protected genetic information about a life insured.

Currently section 47 limits where an insurer can exclude liability where the insured was not aware (or a reasonable person could not be expected to have been aware) of a pre-existing sickness or condition. Item 10 remakes this provision by distinguishing between a contract of life insurance and other contracts. In relation to contracts of life insurance, proposed subsection 47(4) provides that in determining the insured’s awareness (or reasonable awareness) of pre-existing sickness or disability, certain circumstances must be disregarded:

• whether the insured (or their genetic relative) had a disease that is of a genetic nature and is a thing prescribed by the regulations or
• whether the insured (or their genetic relative) has a genetic predisposition to a disease where they had not received a clinical diagnosis for that disease at the time that the contract of life insurance was entered into, and the genetic predisposition is not a thing prescribed by the regulations.

The EM notes that capacity to make regulations will ‘allow the Government to provide certainty and clarity to individuals and insurers in a timely manner, particularly in response to medical advancements that may necessitate changes to the scope of what section 47 applies to’ (p. 29).

Issues

The proposed ban has received support including from the Council of Australian Life Insurers (CALI) whose members will be primarily regulated by the amendments. CALI stated in 2024 that it supported ‘a ban on the use of genetic test results in insurance underwriting to help empower Australians to better manage their health’.

However, the EM’s impact analysis acknowledges that the information asymmetry created by the ban between consumers and insurers may cause ‘adverse selection’ (p. 130):

Adverse selection occurs when a consumer, who is aware of a genetic test result indicating that they are at high risk of an early death or disablement, seeks a life insurance policy or level of cover that they otherwise would not have sought … At its most extreme, adverse selection has the potential to threaten the viability of a market or lead to insurers amending product offerings to moderate any impacts (including through increasing premiums across the pool). While significant impacts are not anticipated in this instance (due to disclosure requirements surrounding diagnosed conditions and an applicant's relevant personal and family medical history), scheduling regular reviews of the impact of any restrictions will enable Government to promptly identify and address any such concerns.

Schedule 2—Licensing exemptions for foreign financial institutions

Background

The term foreign financial services provider (FFSP) covers a range of financial services which may be provided within Australia by entities based overseas including banking, investment funding, wealth management, market making, and financial advisory services. Under the Corporations Act, a person who carries on a financial services business in Australia must hold an AFS licence covering the provision of the financial services unless an exemption applies (section 911A). There are a number of requirements an applicant must pass to be granted an AFS licence including a ‘fit and proper person’ test (section 913BA). Once granted licenses, AFS licensees are subject to range of obligations in providing financial services (section 912A).

There are range of exemptions from this requirement and since 2003 ASIC has provided licensing relief for certain FFSPs. In particular, some licensing relief has been provided for FFSPs providing services to ‘wholesale clients’ (defined in section 761G). ASIC outlines (pp. 8–9) these are clients who pass either:

• a product value test ($500,000 or more)
• an individual wealth test (net assets of $2.5 million or gross income of $250,000 for the last two financial years) or
• a sophisticated investor test (where the AFS licensee provides a statement they have reasonable grounds to believe that the investor has the experience to assess and understand the merit, value and risks of the financial product).

In February 2025, a PJCCFS inquiry recommended amendments to the Corporations Act to remove ‘the subjective elements of the sophisticated investor test and introduce objective criteria…’ (Recommendation 2).

In the 2021–22 Budget, the Morrison Government announced it would consult on options for regulatory relief for FFSPs from requirements to hold AFS licences ‘in order to reduce duplicate regulatory requirements’ (p. 190). This relief was to be limited to ‘FFSPs that deal with wholesale clients and professional investors’ and the consultation would also examine options ‘to create a fast-track licensing process for FFSPs who wish to establish more permanent operations in Australia’ (p. 190). This Treasury consultation was undertaken in July 2021.

In February 2022, the Treasury Laws Amendment (Streamlining and Improving Economic Outcomes for Australians) Bill 2022 was introduced which included the legislative amendments in Schedule 2 (with some minor changes outlined in the EM, p. 3). However, the Bill lapsed at dissolution of the 46th Parliament.

The Schedule 2 provisions were also part of the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 (Better Targeted Bill) as Schedule 7. The Better Targeted Bill was considered by the Senate Economics Legislation Committee and the majority report welcomed the proposed amendments and acknowledged ‘the widespread support for these measures among submitters and other stakeholders’ (p. 50). The Better Targeted Bill was also considered by the Senate Standing Committee for the Scrutiny of Bills which highlighted the operation of proposed section 911F (discussed below).    

In December 2025, ASIC extended transitional exemptions for certain FFSPs from the requirement to hold an AFS licence in specified circumstances for an additional 12 months to 31 March 2027.

Key provisions and issues

Schedule 2 amends the Corporations Act to provide licensing exemptions for FFSPs dealing with certain Australian clients. These exemptions will apply to entities that:

• provide financial services from outside Australia to professional investors (the professional investor exemption)
• are regulated by comparable regulators and provide financial services to wholesale clients (the comparable regulator exemption) or
• provide financial services that involve making a market for derivatives that are able to be traded on a specified licensed market (the market maker exemption).

Schedule 2 also establishes a fast-track licensing process for persons seeking to establish more permanent operations in Australia by providing an exemption for persons regulated by comparable regulators from the ‘fit and proper person test’ when applying for an AFS licence to provide financial services to wholesale clients.

In his second reading speech, the Minister stated that this licensing relief would ‘facilitate access by Australian professional and wholesale investors to global investment opportunities so that they can diversify their financial holdings’ (p. 19):

This improves outcomes for millions of Australians as these services are commonly used by superannuation funds and institutional investors, among other financial firms.

This relief has generally been provided by way of an ASIC instrument. The legislation and this schedule in the bill will elevate the relief to primary law and improve oversight for the regulator.

This gives certainty to the industry that financial institutions and eligible investors can access the financial products and services offered by foreign financial service providers.

Professional investor exemption

Currently section 911A contains a number of exemptions to the requirement to hold an AFS licence. Item 3 will insert proposed paragraph 911A(2)(eo) which will outline a new professional investor exemption. The term professional investor is defined in section 9 of the Corporations Act and applies to a number of categories such as AFS licensees, trustees of large superannuation funds, bodies regulated by the Australian Prudential Regulation Authority, listed entities, persons controlling at least $10 million in assets and certain public authorities.

The professional investor exemption will apply where:

• the financial service is provided only to professional investors
• the person provides the financial service from a place outside of Australia (except during limited marketing visits)
• the person’s head office and principal place of business are located at one or more places outside of Australia
• the person reasonably believes that providing the same or substantially the same financial service would not contravene any law applying in the person’s principal place of business, head office, or the place from where the financial services are provided
• the person notifies ASIC they intend to rely on this exemption.

However, proposed section 911F provides that the regulations may provide that the exemption does not apply to particular kinds of financial services, products or professional investors. When the Senate Scrutiny of Bill Committee previously considered this proposed provision as part of another Bill, it raised concerns and sought clarification from the Treasurer regarding how it would operate. It noted (pp. 24–25):

Provisions enabling delegated legislation to modify the operation of primary legislation are akin to Henry VIII clauses, which authorise delegated legislation to make substantive amendments to primary legislation (generally the relevant parent statute) …

The committee is also concerned when provisions enable delegated legislation to exempt persons or entities from the operation of primary legislation. These provisions have the effect of limiting, or in some cases removing, parliamentary scrutiny.

Following a ministerial response, the Committee drew its scrutiny concerns ‘to the attention of senators and leaves to the Senate as a whole the appropriateness of proposed section 911F providing that regulations can provide for exemptions to the professional investor exemption as set out in primary legislation’. (pp. 55–56)

Comparable regulator exemption

ASIC has provided transitional ‘sufficient equivalence’ regulatory relief to certain FFSPs where they are regulated by certain overseas regulators (such as the Financial Conduct Authority in the United Kingdom). Proposed paragraph 911A(2)(ep) will create a similar exemption where:

• the financial service is provided only to wholesale clients
• the person is a foreign company or is a partnership formed outside of Australia
• the person has and maintains authorisations, registrations or licences (however described) necessary to legally provide the same or substantially the same financial service in a place outside of Australia
• the regulator administering those authorisations, registrations or licences for the comparable jurisdiction is a regulator determined by the Minister under proposed section 911W
• the person notifies ASIC they intend to rely on this exemption.

Proposed section 911W will allow the Minister to determine, by legislative instrument, overseas regulators that administer broadly comparable regulatory regimes of authorisations, registrations or licences. The Minister must have regard to a range of matters in making these determinations including whether the overseas regulatory regime ‘produces broadly comparable outcomes’, any relevant advice from ASIC and whether the relevant ‘regulatory regime is broadly consistent with the Objectives and Principles of Securities Regulation, developed by the International Organization of Securities Commissions (IOSCO)’.

Market maker exemption

Proposed paragraph 911A(2)(eq) will also create an exemption for persons providing a financial service ‘making a market’ for derivatives that are able to be traded on a specified licensed market prescribed in regulations. The meaning of ‘makes a market’ draws from section 766D where a person ‘makes a market’ for a financial product if they regularly state ‘the prices at which they propose to acquire or dispose of financial products on their own behalf’ and ‘other persons have a reasonable expectation that they will be able to regularly effect transactions at the stated prices’ (with some specified exceptions).

The market maker exemption will have similar requirements to the professional investor exemption (discussed above). This includes that it will only apply where the person reasonably believes that providing the same or substantially the same financial service would not contravene any law applying in the person’s principal place of business, head office, or the place from where the financial services are provided.

Conditions and notification requirements

The proposed exemptions will be subject to a range of conditions and contravention of a condition may result in a civil penalty (proposed subsection 911G(4)). For the professional investor exemption these conditions include:

• complying with ASIC’s reasonable requests for assistance in relation to its functions and powers (proposed subsection 911H(2)) and ASIC directions for specified information relating to the person’s financial services or business (proposed section 911J)
• giving notice of the exemption to each recipient of financial service (proposed section 911K)
• notifying ASIC of any changes to contact details (proposed section 911L)
• if the financial service business is carried on predominantly within Australia, the person must do all things necessary to ensure that the financial services are provided efficiently, honestly and fairly (proposed section 911M)
• notifying ASIC of any contravention of a condition for an exemption (proposed section 911Q)

As well as the above conditions, persons relying on the comparable regulator and market maker exemptions must also notify ASIC they agree to submit to the non-exclusive jurisdiction of Australian courts for proceedings relating to the relevant financial services brought by ASIC (or another Commonwealth authority) and to comply with any resulting court orders (proposed subsection 911H(3)).

Additionally, the conditions for the comparable regulator exemption include:

• having a local agent in Australia (proposed subsection 911P(2))
• notifying ASIC that the person consents to ASIC and the comparable regulator sharing information about the person (proposed subsection 911N(2))
• notifying ASIC of any significant enforcement action, disciplinary action or investigation undertaken against the person (proposed subsection 911N(4)).

ASIC will have powers to cancel the use of the exemptions by FFSPs as well as to vary or impose additional conditions. For example, ASIC may, in writing, cancel an exemption from applying if it reasonably believes a person is not a ‘fit and proper’ person (proposed section 911S). ASIC’s powers in relation to the exemptions will be subject to procedural safeguards such as requirements to first give a ‘show cause notice’ to persons (for example, proposed section 911T).

Proposed subsections 911A(5AA)-(5AD) set out the requirements for persons who intend to rely on the exemptions to notify ASIC including the form of notification and timing rules.

Fast track licensing – exemption from ‘fit and proper person’ test

Currently, section 913B outlines the preconditions for ASIC to grant an AFS licence including that the applicant satisfies the ‘fit and proper person’ test.

The Bill’s amendments will insert proposed subsection 913B(2A) which will exempt certain foreign companies and partnerships from this requirement. This can occur where:

• the applicant is a foreign company or is a partnership formed outside of Australia
• the licence would be restricted to the provision of financial services to wholesale clients
• the applicant already holds ‘authorisations, registrations or licences’ to legally provide ‘the same or substantially the same financial services’ overseas issued by a comparable regulator.

The exemption would draw on the ‘comparable regulator’ provision discussed above (proposed section 911W) which would be determined by the Minister.

Section 914B relates to applications for the conditions on an AFS licence to be varied. Subsection 914B(2) provides that ASIC may refuse to vary a condition if the ‘fit and proper person’ test is not satisfied. Proposed subsection 914B(2A) would apply the same exemption outlined above for foreign companies or partnerships with comparable regulators.

The EM notes that the purpose of the exemptions from the ‘fit and proper’ person test is to ‘fast-track the licensing process and reduce the administrative burden’ for foreign companies or partnership formed overseas which are regulated by a comparable regulator (p. 79).

Commencement

The amendments in Schedule 2 will commence 12 months after Royal Assent.

Issues

The proposed AFS licence exemptions in Schedule 2 attempt to resolve a complex issue—the optimal framework to allow Australians to benefit from accessing FFSPs while maintaining the regulatory safeguards delivered by requiring persons providing financial services to obtain AFS licences from ASIC. In discussing its concerns regarding earlier proposed reforms for FFSPs, ASIC noted (p. 27):

ASIC is in the invidious position that if two entities engaged in the same misconduct such as not acting efficiently, honestly or fairly involving Australian clients and the activity occurred in Australia and one held an AFS licence and the other did not, there would be two different regulatory responses to the misconduct.

For example, ASIC does not have the ability to apply the same regulatory response such a [sic] seeking a civil penalty for the misconduct by an FFSP. We would generally be reliant on the overseas regulator to take the relevant regulatory action for such misconduct by the FFSP under its regime. This may mean we may not achieve the intended deterrent effect when addressing misconduct by an FFSP as we would when addressing misconduct by an AFS licensee.

Similarly, the proposed exemptions from the ‘fit and proper person’ test are likely to encourage applications for AFS licenses by foreign companies and partnerships who may provide financial services to Australian wholesale clients. However, this exemption will also limit the capacity of ASIC to reject applications and increase its reliance on overseas ‘comparable regulators’ to appropriately assess and regulate applicants for AFS licences.

Schedule 3—Multilateral development banks

Background

Multilateral development banks (MDBs) are generally international financial institutions established by two or more nation states to support economic growth and other outcomes in developing countries. Australia is a member and contributor to a number of MDBs including the World Bank Group, the Asian Infrastructure Investment Bank and the Asian Development Bank. Australia is also a member of the International Monetary Fund (IMF), an international financial institution which facilitates financial stability, monetary cooperation and economic growth including by providing assistance to countries in crisis.

The amendments in Schedule 3 will standardise some features of the legislative frameworks which facilitate Australia’s involvement with several MDBs and the IMF. These include amendments to:

• Asian Development Bank Act 1966
• Asian Infrastructure Investment Bank Act 2015
• European Bank for Reconstruction and Development Act 1990
• International Finance Corporation Act 1955 (IFC Act)
• International Monetary Agreements Act 1947 and International Monetary Agreements Act1960
• Multilateral Investment Guarantee Agency Act 1997 (MIGA Act).

New appropriation provisions

A special (or standing) appropriation is a legislative provision which authorises a payment to be made by the Commonwealth from the Consolidated Revenue Fund. The amendments will introduce standardised special appropriations into the legislative framework for MDBs. The EM highlights the key features of the proposed provisions (pp. 88–89):

The new appropriations support any payments necessary to meet relevant financial obligations to MDBs.

The amendments define ‘relevant financial obligation’ in each Act. A relevant financial obligation is any obligation (contingent or otherwise) that satisfies the following requirements:

• the obligation must require (or could require) Australia to make one or more payments;
• the obligation must have been undertaken or imposed under an agreement, arrangement or resolution of a specific kind;
• the obligation must relate to providing financial accommodation in support of the purpose of the MDB;
• if the obligation is undertaken or imposed after commencement of the amendments, the notification requirements must be met; and
• the obligation must not be an obligation that is excluded by the Minister.

The EM acknowledges that the proposed appropriations provisions ‘do not have a direct dollar-figure limit’ (p. 88):

This is appropriate as it allows the Commonwealth flexibility to enter into new arrangements or agreements with MDBs. However, the amounts of money that could be appropriated is indirectly limited … [T]he appropriations only allow money to be appropriated for Australia meeting financial obligations under an agreement, arrangement or resolution of a specific kind with an MDB. The appropriations are therefore strictly limited to the policy objective of supporting Australia’s participation with MDBs. Further, new financial obligations, or increases in amounts of existing financial obligations, are subject to Parliamentary scrutiny through the disallowance process. These oversight mechanisms ensure the Commonwealth is limited in its use of the standing appropriations.

In particular, after commencement, new obligations, or increases in amounts of existing relevant financial obligations, will require notice to be given by the Minister by legislative instrument. These notices would be subject to disallowance and may only commence after the disallowance period outlined in subsection 42(1) of the Legislation Act 2003.

Issue of securities and delegation

The amendments will also standardise provisions to allow the Treasurer to make and issue securities in place of payments to ‘ensure Australia can issue promissory notes or similar securities to satisfy its relevant financial obligations to the MDBs’ (EM, p. 93). These securities must be non-negotiable, non-interesting bearing and payable to the MDB on its par value on demand.

The amendments will also allow the Treasurer to delegate, in writing, the power to make and issue securities for this purpose to senior Treasury officials. Persons exercising these delegated powers must comply with the Minister’s written directions.

Incorporation of certain MDB agreements by reference

Currently, the MIGA Act includes the text of the MIGA Convention in Schedule 1 of the legislation. In the IFC Act, the definition of the IFC Agreement (section 3) contains references to previous amendments and the Treasurer may also give notice of amendments to the IFC Agreement by legislative instrument (section 5A). The Bill will simplify the references to these agreements in these pieces of legislation.

In the definitions of a ‘relevant financial obligation’, ‘the Agreement’ and ‘Convention’ for the MIGA Act and the IFC Act, the Bill’s amendments would incorporate the IFC Agreement and the MIGA Convention by reference to each respective agreement, as in force for Australia from time to time. The EM states this would mean that ‘future amendments made to the respective agreements will be automatically incorporated into domestic legislation on coming into effect at international law.’ (p. 95)

While the EM characterises this approach as ‘consistent with modern drafting practice’ (p. 94), the Senate Standing Committee for the Scrutiny of Bills has previously provided guidance that the incorporation of legislative provisions by reference to other documents ‘… raises the prospect of changes being made to the law in the absence of parliamentary scrutiny’ (p. 22). Relevant to this issue, the EM states (p. 95):

The amendments do not alter the entry into force or application of the IFC Agreement or MIGA Convention for Australia.

As any future amendments to the IFC Agreement or MIGA Convention will constitute a treaty action, the decision to accept those amendments will be subject to Australia’s treaty making procedures, such as consideration by the Joint Standing Committee on Treaties and approval by relevant Ministers. This will provide appropriate parliamentary oversight of any proposed amendments.

The amendments in Schedule 3 will commence the day after Royal Assent.

Schedule 4—Repealing Stage 2 financial adviser registration

The final report of the Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry included a recommendation that the law should be amended to establish a new disciplinary system for financial advisers which ‘requires all financial advisers who provide personal financial advice to retail clients to be registered’ (Recommendation 2.10). The report argued that mandatory individual registration would have a number of benefits. These included:

• formalising the existing Financial Advisers Register ensuring valuable information is available to the public
• facilitating the operation of a central disciplinary body
• ensuring the central disciplinary body can impose sanctions that have effect even if an adviser leaves a particular AFS licence holder or professional association
• facilitating the introduction of additional requirements for advisers directed at raising standards in the industry (p. 213).

Further, the report considered that a system of mandatory individual registration could impress upon ‘financial advisors that they occupy a position of trust, and that their entitlement to continue to occupy that position of trust depends on their obeying the law and other standards …’ (p. 214)

The Morrison Government introduced the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Act 2021 (Better Advice Act) to respond to this recommendation by amending the Corporations Act to allow for a two-stage registration process for financial advisers. Stage 1 involved a one-off registration process obliging AFS licensees to apply to ASIC to register their financial advisers by providing additional information on their authorised advisers. ASIC was to use this information to update the Register of Relevant Providers also (also known as the Financial Advisers Register). In relation to the Stage 1 process, ASIC’s guidance noted:

The registration requirement is an ongoing obligation and is separate to the requirement for AFS licensees to authorise and appoint a relevant provider to the Financial Advisers Register. From 16 February 2024, AFS licensees must authorise, appoint and register a relevant provider before the relevant provider can lawfully provide personal advice to retail clients on relevant financial products.

Under the proposed Stage 2 registration process, individual financial advisers would be obliged to apply to register themselves and this registration would remain in force until the end of the next financial year. This was intended to coincide with the roll out of a new Australian Business Registry System administered by the Australian Taxation Office replacing the Financial Advisers Register administered by ASIC (EM, Better Advice Act, p. 53).

The amendments requiring financial advisers to register as part of the Stage 2 registration process were to commence on a date fixed by proclamation, but no later 1 July 2026 (contained in Schedule 2 of the Better Advice Act). However, on 10 February 2025, the Albanese Government announced:

… the Government will no longer proceed with Stage 2 of the registration process for financial advisers established by the Better Advice Act. This stage would have required individual advisers to register annually with [ASIC] from 1 July 2026.

Financial advisers are already registered by their authorising Australian Financial Services licensees under Stage 1. Not proceeding with Stage 2 removes unnecessary red tape on individual advisers.

Schedule 4 of the Bill will repeal Schedule 2 of the Better Advice Act and its commencement provision so that the obligations on unregistered ‘relevant providers’ not to provide ‘personal advice to retail clients in relation to relevant financial products’ do not commence. The EM clarifies (p. 5):

This maintains the current system which requires AFS licensees to apply to ASIC to register their authorised financial advisers. This is consistent with the objective of reducing regulatory burden for individual advisers and maintaining a functioning and effective disciplinary system.

The Schedule 4 amendments will commence on 30 June 2026 (the day before the scheduled commencement of Schedule 2 of the Better Advice Act).