Where things stand
On 23 March 2026, the Australian Securities and Investments Commission (ASIC) released Consultation CS 47, seeking feedback on its proposal to remake ASIC Corporations (Managed Discretionary Account Services) Instrument 2016/968 (ASIC Instrument 2016/968). They have not issued a formal consultation paper, rather they are seeking feedback through a simple consultation process.
ASIC Instrument 2016/968 provides conditional relief from several key requirements in the Corporations Act 2001 (Cth) (Corporations Act) for managed discretionary account (MDA) providers and external MDA custodians. Without it, MDA services would be caught by the managed investment scheme provisions in Chapter 5C, the product disclosure provisions in Chapter 6D, and the financial product disclosure requirements in Part 7.9 of the Corporations Act. The instrument also modifies the Chapter 7.7 disclosure provisions to provide conditional relief for statements of advice and financial services guides.
ASIC is seeking feedback on two questions:
- Whether the instrument should be extended.
- If so, whether substantive and/or simplification changes should be made to its policy settings and terms.
Relief under the ASIC Instrument 2016/968
An MDA is a facility under which a client's portfolio assets are managed at the discretion of another person (the MDA provider), subject to agreed limitations. The MDA provider exercises trading discretion, that is, the authority to make and implement investment decisions without prior reference to the client for each transaction.
ASIC considers that an MDA generally falls within the definition of both a ‘managed investment scheme’ and a ‘facility for making a financial investment’ under the Corporations Act. However, ASIC has recognised that MDA providers perform more limited functions than responsible entities of registered schemes, which is the policy rationale underpinning the conditional relief.
MDA providers who comply with the conditions of ASIC Instrument 2016/968 receive relief from:
- The requirement under section 601ED(5) of the Corporations Act to register the MDA as a managed investment scheme.
- The requirement to prepare a product disclosure statement under Part 7.9 of the Corporations Act.
- The securities disclosure and related provisions in Parts 6D.2 and 6D.3 of the Corporations Act for securities held on behalf of the client under the MDA.
The relief is conditional. MDA providers must comply with obligations in ASIC Instrument 2016/968 and ASIC Regulatory Guide 179: Managed discretionary accounts, including:
- Holding an Australian financial services licence with the relevant authorisations.
- Providing additional disclosure in the financial services guide given to each client about the MDA.
- Entering into an MDA contract with each client that includes certain prescribed terms and an investment program complying with the requirements of the relief.
- Ensuring the investment program is reviewed at least once every 13 months.
- Acting honestly and in the best interests of the client, exercising reasonable care and diligence, and giving priority to the client's interests.
- Managing conflicts of interest.
- Complying with asset holding requirements, including holding client portfolio assets in trust and ensuring assets are held separately from the provider's own property.
- Maintaining professional indemnity insurance and fraud insurance.
- Complying with client reporting and record-keeping requirements.
- Maintaining and having audited adequate internal control procedures to ensure compliance with the licensee’s obligations relating to the provision of MDA services.
- Notifying ASIC in writing of any material breach of the conditions of the relief or the financial services laws within 10 business days.
What’s next
Consultation closes on 28 April 2026 at 5PM (AEST).
ASIC is also consulting on proposals to increase net tangible assets requirements for responsible entities and other fund operators, and expressly identified MDA providers as a category of AFSL holder not currently subject to an NTA requirement, for which ASIC is considering introducing one.
Read our insight on the proposals to increase NTA requirements for responsible entities and other fund operators here.