ASIC Corporations (Amendment) Instrument 2025/871

Explanatory Statement

ASIC Corporations (Amendment) Instrument 2025/871

This is the Explanatory Statement for ASIC Corporations (Amendment) Instrument 2025/871.

The Explanatory Statement is approved by the Australian Securities and Investments Commission (ASIC).

Summary

1.       ASIC Corporations (Amendment) Instrument 2025/871 (Amending Instrument) amends ASIC Corporations (Custody Standards for Providers of Custodial and Depository Services) Instrument 2024/17 (Principal Instrument) to allow omnibus account structures for digital assets that are financial products under specified conditions.

Purpose of the instrument

1.       The purpose of the Principal Instrument is to specify minimum regulatory obligations that must be complied with by a person holding financial products or a beneficial interest in financial products when providing a custodial or depository service. Through notional subsection 912AAC(1) the Principal Instrument only applies to those who provide a custodial or depository service under section 766E of the Corporations Act 2001 (the Act), which is a service provided in relation to financial products.
2.       Such persons (the custodian) must ensure that they, and any person the custodian directly or indirectly engages to hold custodial property, holds the custodial property separately from:
   1.    property in which the custodian or the person holding the custodial property has an interest; and
   2.    any other person other than the client, unless an exception applies.
3.       Notional subparagraph 912AAC(5)(b)(A) of the Act allows for custodians to custody certain types of financial products in omnibus accounts for their customers, subject to maintaining appropriate record keeping arrangements and reconciliation procedures in notional subsection 912AAC(6). The Principal Instrument currently limits omnibus accounts to a deposit taking facility of a body carrying on a business of accepting money on deposit including rights under that facility, securities, and derivatives.
4.       The purpose of the Amending Instrument is to include digital assets, in the exceptions to the custody of certain types of financial products in omnibus accounts under notional paragraph 912AAC(5)(b), and to define ‘digital asset’ in notional subsection 912AAC(16).

Consultation

1.       ASIC undertook a general consultation through Consultation Paper 381: Updates to INFO 225: Digital assets: Financial products and services (CP 381). CP 381 considered extending omnibus accounts, as referenced in the Principal Instrument, to any digital asset that is a financial product. CP 381 sought feedback on whether extending omnibus client accounts would be appropriate for digital assets that are financial products.
2.       Submissions noted that use of omnibus structures is a widespread practice across the industry, providing operational efficiencies in terms of speed and transaction costs. They also stated that omnibus structures are utilised by some entities for risk mitigation and cybersecurity.
3.       The Amending Instrument responds to concerns that there would be a significant cost, loss of efficiency and compliance burden to a large portion of the industry to restructuring existing omnibus systems to implement blockchain segregation of individual client assets.
4.       In October 2025, ASIC undertook a public consultation on the proposed amendment instrument in CS-032 Proposed relief for certain stablecoins and wrapped tokens, and extension of omnibus accounts for digital asset custody. ASIC has not made any changes to the instrument as a result of the consultation.
5.   Feedback supported the use of omnibus account structures for digital asset custody, with some requesting further details on how digital asset businesses can undertake record-keeping and reconciliation procedures. Consistent with the principles-based obligations that apply to any financial product represented in any technological form, ASIC has not provided any further detailed obligations for custodians of digital assets that are financial products. A service provider’s arrangements for meeting the minimum standards may vary depending on the particular assets, and the nature and scale of the services provided. Regulatory Guide 133 Funds management and custodial services: Holding assets contains some good practice measures for custodians of digital assets.
6.   ASIC has consulted with the Office of Impact Analysis (OIA) in relation to whether an Impact Analysis is required. OIA advised that the preparation of an Impact Analysis was not required as the proposal is likely to impact an immaterial proportion of Australian businesses.

Operation of the instrument

1.   Item 1 of Schedule 1 of the Amending Instrument amends notional subparagraph 912AAC(5)(b)(A) to extend the omnibus account exception to digital assets that are financial products. The amendments also fix an identified issue with numbering of paragraphs and subparagraphs in subsection 912AAC(5) in the Principal Instrument.
2.   Item 2 of Schedule 1 of the Amending Instrument inserts the definition of digital asset to which the exemption applies. Digital asset is defined as “a digital representation of value or rights (including rights to property), the ownership of which is evidenced cryptographically and that is held and transferred electronically by:

1.    a type of distributed ledger technology; or
2.    another distributed cryptographically verifiable data structure.”

Legislative instrument and primary legislation 

1.   The subject matter and policy implemented by the Amending Instrument is more appropriate for a legislative instrument rather than primary legislation because the Amending Instrument amends the Principal Instrument, which is itself a legislative instrument. 

Duration of the instrument

1.   The Amending Instrument will be repealed under section 48A of the Legislation Act 2003.

Legislative authority

1.   The delegate of ASIC makes this instrument under paragraph 926A(2)(c) of the Act.  
2.   Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power is to be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend or vary any such instrument.
3.   The Amending Instrument is a disallowable legislative instrument under section 42 of the Legislation Act 2003. 

Statement of Compatibility with Human Rights 

1.   The Explanatory Statement for a disallowable legislative instrument must contain a Statement of Compatibility with Human Rights under subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011. A Statement of Compatibility with Human Rights is in the Attachment.

Attachment

Statement of Compatibility with Human Rights

This Statement of Compatibility with Human Rights is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.  

ASIC Corporations (Amendment) Instrument 2025/871

Overview

1.       The purpose of this instrument is to amend ASIC Corporations (Custody Standards for Providers of Custodial and Depository Services) Instrument 2024/17 to allow omnibus account structures for digital assets that are financial products under specified conditions.

1.       ASIC Corporations (Custody Standards for Providers of Custodial and Depository Services) Instrument 2024/17 allows custodians to custody certain types of financial products in omnibus accounts for their customers, subject to maintaining appropriate record keeping arrangements and reconciliation procedures in notional subsection 912AAC(6).

Assessment of human rights implications

1.       This instrument does not engage any of the applicable rights or freedoms.

Conclusion

1.       This instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.