APRA updates exemption from section 66 of the Banking Act 1959

APRA has finalised changes to a class exemption that allows certain foreign entities to use restricted terms such as bank, banker or banking when issuing debt securities in Australian wholesale capital markets, releasing its response to consultation on 23 July 2026. Section 66 of the Banking Act 1959 restricts the use of these terms in connection with a financial business unless APRA has given written consent, and the relevant exemption previously applied only to foreign banks.

Following consultation that began in June 2025 and an interim response in September 2025, APRA has expanded the exempt class under Banking exemption No. 2 of 2026 to include foreign bank holding companies, foreign bank treasury companies, multilateral development banks and foreign subsidiaries of Australian banking groups, in addition to foreign banks already covered. All four submissions received during consultation supported broadening the exemption, with some respondents recommending it be extended even further than APRA ultimately proposed. The exemption allows eligible entities to use the restricted words in connection with raising funds through debt securities issues in the wholesale capital markets and distributing related information to wholesale investors, subject to conditions including that the relevant issues not require disclosure under Part 6D.2 of the Corporations Act 2001 and not be offered in parcels below a specified value.

Entities that previously fell outside the exempt class and therefore needed individual APRA consent to use a restricted term in connection with wholesale debt issuance may now rely on the broadened class exemption instead, reducing the administrative burden associated with seeking case by case approval. Other aspects of the exemption, including the conditions attached to its use, remain unchanged from the prior instrument.