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CS 52 ASIC proposes to remake legislative instrument about client money held in cash common funds

simple consultation – 52

Released 5 May 2026. Comments close 19 May 2026.

ASIC is seeking feedback on its proposal to remake a legislative instrument to allow Australian financial services (AFS) licensees to pay clients’ money into a cash common fund.

The proposed legislative instrument to be remade is ASIC Corporations (Client money - Cash common funds) Instrument 2016/671 due to sunset on 1 October 2026.

We have assessed the instrument and determined that it is operating effectively and efficiently. Consequently, it continues to form a necessary and useful part of the legislative framework.

Under the proposal, the effect of the instrument will remain unchanged.

A consultation paper was not issued for this consultation.

Providing feedback

We invite feedback on this proposal from industry and interested stakeholders. Submissions should be sent to rri.consultation@asic.gov.au by 5 pm AEST on Tuesday 19 May 2026.

You may choose to remain anonymous or use an alias when providing feedback. However, if you do remain anonymous, we will not be able to contact you to discuss your feedback should we need to.

We will not treat your feedback as confidential unless you specifically request that we treat the whole or part of it (such as any personal or financial information) as confidential.

Please see our privacy policy for more information on how we handle personal information, your rights to seek access to and correct personal information, and your right to complain about breaches of privacy by ASIC.

Background

Under the Legislation Act 2003, legislative instruments are repealed, or ‘sunset’, after 10 years, unless ASIC acts to preserve them.

ASIC Instrument 2016/671 enables client money received by an AFS licensee to be deposited into a cash common fund, provided the fund is also a registered scheme.

It is intended to provide flexibility to licensees in dealing with client money while retaining the consumer protections provided by section 981B of the Corporations Act 2001.

This instrument extended the relief that was originally provided in ASIC Class Order [CO 04/1063] IR 04-47 ASIC provides relief for client money held in cash common funds.

Consultation feedback and ASIC's response

Released 1 October 2026

ASIC received one submission in response to our consultation that requested stronger justification for the remaking of ASIC Instrument 2016/671 or, alternatively, stronger conditions in the Instrument.

ASIC is not aware of adverse information in relation to AFS licensees relying on the relief in ASIC Instrument 2016/671. Therefore, we consider that stronger conditions are not warranted in the Instrument, noting that the Instrument will already limit the investments for client money in cash common funds to fixed interest securities and negotiable instruments.

ASIC is of the view that the relief in the Instrument:

  • continues to be a useful part of the legislative framework because it addresses the uncertainty about whether client money can be paid into cash common funds; and
  • maintains the consumer protections safeguards associated with holding client money imposed by Pt 7.8 of the Corporations Act 2001 by only allowing client money to be placed in accounts or registered cash schemes operated by licensed entities.

Submissions

(non-confidential submissions)

  1. Michael Sanderson (PDF 87 KB)

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