The update concerns ASIC's regulatory framework for how Australian Financial Services licensees manage client money through cash common funds, which is a core investment services operational requirement for firms handling client assets.
Cash common funds function as low-risk, liquid value stores for client money management, aligning with Cash Equivalents characteristics, though the primary focus is on the operational/conduct framework rather than the product itself.
Specialism
The update concerns ASIC's proposal to remake a legislative instrument governing how AFS licensees must handle and segregate client money in cash common funds, which is a core safeguarding obligation under financial services law.
Mandatory inheritance: Safeguarding is a child of Governance, so Governance must be raised as the secondary tag.
2026-05-06 19:42:17·kgurnani@vixio.com
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Fair, strong and efficient financial system for all Australians.
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TITLE: Australia's Securities Regulator Proposes to Remake Legislative Instrument on Client Money in Cash Common Funds
BODY:
On March 2025, the Australian Securities and Investments Commission (ASIC) announced its proposal to remake ASIC Corporations (Client money - Cash common funds) Instrument 2016/671, which is scheduled to expire on 1 October 2026.
The instrument enables Australian Financial Services (AFS) licensees to deposit client money into cash common funds, provided the fund is also a registered scheme. ASIC has assessed that the instrument is operating effectively and continues to form a necessary and useful part of the legislative framework. The effect of the instrument will remain unchanged when remade. The instrument provides flexibility to licensees in managing client money while maintaining consumer protections under Section 981B of the Corporations Act 2001 (Corporations Act). The current instrument extended relief previously provided under ASIC Class Order [CO 04/1063].
ASIC is seeking feedback from stakeholders on the proposal to remake the instrument. Submissions should be sent to rri.consultation@asic.gov.au by 5 pm Australian Eastern Standard Time (AEST) on Tuesday 19 May 2026. The consultation period allows AFS licensees, industry bodies, consumer advocates, and other interested parties to provide input on the proposed remake before the current instrument expires.
**References:**
ASIC Newsroom: ASIC proposes to remake legislative instrument about client money held in cash common funds
ASIC proposes to remake legislative instrument about client money held in cash common funds | ASIC Newsroom Print Share Twitter Facebook LinkedIn Email 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. ASIC Corporations (Client money - Cash common funds) Instrument 2016/671 is due to expire on 1 October 2026. ASIC is proposing to remake this instrument because we have assessed the instrument is operating effectively and continues to form a necessary and useful part of the legislative framework. The effect of this instrument will remain unchanged when remade. Providing feedback Submissions should be sent to rri.consultation@asic.gov.au by 5 pm AEST on Tuesday 19 May 2026 . Background Instrument 2016/671 enables client money received by an AFS licensee to be deposited into a cash common fund if the fund is also a registered scheme. It gives flexibility to licensees in dealing with client money while retaining the consumer protections provided by s981B of the Corporations Act 2001 (Corporations Act). This instrument extended the relief that was provided in ASIC Class Order [CO 04/1063] . Download CS 52 ASIC proposes to remake legislative instrument in relation to client money held in cash common funds ASIC is Australia’s corporate, markets and financial services regulator.