In this Funds Update for 17 April 2026:
- Treasury consultation on reforms to the Compensation Scheme of Last Report
- FFSP exemptions take effect 9 April 2027
- 70% of paper lodgements to ASIC now enabled for email
Treasury consultation on reforms to the Compensation Scheme of Last Report
On 7 April 2026, Treasury opened a consultation and released an Options Paper, seeking feedback on reform options to support the ongoing sustainability and effective operation of the Compensation Scheme of Last Resort (CSLR).
The options paper observes that large scale failures have driven the costs of the CSLR beyond those anticipated when the CSLR was first establish established and that the sustainability of the CSLR will come under further pressure as claims in relation to the collapses of Shield and First Guardian Master Funds enter the system.
The CSLR is funded by annual levies (currently capped at $20 million per sector) on the following sectors:
- Licensees that provide personal advice to retail clients on relevant financial products;
- Credit providers
- Credit Intermediaries
- Securities dealers.
The options paper seeks feedback on a 'waterfall framework' for future special levies, for any funding shortfall to be allocated sequentially across up to three tiers, reflecting the relative connection of sub-sectors to the underlying losses:
- Tier 1 Primary sub-sector: up to $20 million (in addition to the $20 million annual levy cap);
- Tier 2 Connected sub-sector/s: up to $40 million per sub-sector; and
- Tier 3 Retail-facing sub-sectors: up to $30 million per sub-sector.
The options paper seeks feedback on two options to levying the managed investment scheme (MIS) sector, as a connected sub-sector in the waterfall framework:
- a broad-based levy on all registered MISs; or
- targeting the levy so that it does not apply to the low risk segment of the market that is less likely lead to claims on the CSLR being made. The options paper notes the difficulty of determining what is a 'low risk' MIS.
Submissions to the consultation are open until 22 May 2026.
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FFSP exemptions take effect 9 April 2027
The new Australian financial service license (AFSL) exemptions for foreign financial service providers (FFSPs) including the “comparable regulator exemption” and the “professional investor exemption”, will come into effect on 9 April 2027.
On 8 April 2026, the Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Act 2026 (Act) received Royal Assent. Under the Act, the AFSL FFSP exemptions will commence on 9 April 2027.
The current transitional arrangements extending the passporting and limited connection FFSP exemptions are due to expire on 31 March 2027 but we expect these transitional arrangements to be extended so that there is no gap before the new FFSP exemptions take effect.
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70% of paper lodgements to ASIC now enabled for email
On 2 April 2026, ASIC announced that 70% of paper lodgements are now enabled for submission by email. 30 additional forms are now available for email lodgement from 31 March 2026 and there are 88 forms now available for email lodgement.
Certain forms related to foreign companies can now be lodged by email for the first time.
You can see the complete list of forms that can be lodged by email here.
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Fiona Smedley
Partner, Sydney
Disclaimer
The articles published on this website, current at the dates of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action.