Ready, set, DAP: ASIC drops bumper Digital Asset Framework consultation

In April this year, Australia passed legislation recognising digital asset and tokenised custody platforms as two new types of financial products. These reforms establish a bespoke regulatory framework for custodial digital asset exchanges and trading platforms that is integrated within the existing Australian financial services framework. Today, ASIC released its draft guidance, standards and financial requirements which support these reforms. For exchanges, the headline items are new capital requirements, restrictions on trading against clients, new best execution obligations and a long list of operational rules. The consultation is open until 27 November 2026.

What has been released

ASIC has released Consultation Paper 392 Digital asset law reform implementation: Proposed standards and guidance (CP 392). It is the first detailed view of how ASIC will implement the Corporations Amendment (Digital Assets Framework) Act 2026 (DAF Act), which commences on 8 April 2027 and creates two new financial products, digital asset platforms (DAPs) and tokenised custody platforms (TCPs). The package contains the consultation paper and four attachments.

• Attachment 1 is draft Regulatory Guide 000 Digital asset platforms and tokenised custody platforms (draft RG 000), covering the perimeter, licence authorisations, licensee obligations and operator disclosure.

• Attachment 2 is a draft asset-holding standards instrument to be made under s912BE of the Corporations Act 2001 (Cth) (Asset-Holding Standards).

• Attachment 3 is a draft transactional and settlement standards instrument to be made under s912BF (T&S Standards).

• Attachment 4 is a draft financial requirements instrument with three alternative net tangible assets (NTA) models.

Part 2 of CP 392 also proposes updates to INFO 225 addressing public digital token infrastructure, wrapped tokens and custodial staking, and a rule (applying to all AFS licensees) excluding “restricted stablecoins” from counting towards NTA.

ASIC stresses the drafts are illustrative and may change considerably, but they are detailed enough that exchanges should be testing their business models against them now.

Important dates:

a)    27 November 2026 – Submissions close

b)    March 2027 – Final instruments and guidance published

c)     8 April 2027 – DAF Act commences and DAP/TCP licence applications open

d)    7 October 2027 – Deadline for existing operators to apply for a licence or variation

1.    Financial requirements and the $14 million question

Every licensee providing financial services in relation to a DAP or TCP will be subject to the RG 166 solvency and positive net assets requirements, a $50,000 surplus liquid funds requirement if it holds more than $100,000 of client money, and the adjusted surplus liquid funds requirement if it transacts with clients as principal. Operators will also be subject to tailored cash needs requirements (a 12-month cash flow projection approved by the board each quarter) and tailored audit requirements, both modelled on the IDPS (investor directed portfolio service) regime, together with an NTA requirement under one of three models.

Under each model, an operator whose underlying assets are all held by third-party custodians qualifies for a concessional NTA equal to the greatest of $200,000, 0.5% of average underlying assets (capped at $7 million) and 10% of average revenue. Otherwise, the requirement is as follows.

• Model 1 sets NTA at the greater of $14 million and 10% of average revenue.

• Model 2 reduces the $14 million floor to $7 million where no underlying asset of the platform is a financial product.

• Model 3 sets a base of the greatest of $2 million, 0.5% of average underlying assets (capped at $14 million) and 10% of average revenue, plus cumulative add-ons for agency ($500,000), neutral trading venue and principal ($1 million) models. CP 392 states the neutral venue add-on as $750,000 while the draft instrument says $500,000, which ASIC will need to reconcile.

At least half of required NTA (and not less than $200,000) must be held in cash or cash equivalents, and 100% in liquid assets. All thresholds are CPI-indexed.

For most Australian exchanges, which self-custody at least part of client holdings, Models 1 and 2 mean $7 million to $14 million of NTA. ASIC accepts that the models appear to set higher minimums than the UK, EU, Singapore and Hong Kong, whose regimes it puts at roughly A$80,000 to A$5.4 million before scaling, but argues the comparison is not like-for-like because those regimes require narrower tier 1 capital. That argument sits uneasily with ASIC’s statement in the same section that its financial requirements are not prudential and that it does not directly monitor them. A fixed floor that does not scale with size will fall hardest on smaller domestic exchanges and is likely to favour large offshore groups, a competition question ASIC asks directly.

2.     No trading against clients

Section 14 of the draft T&S Standards prohibits a DAP operator, and its related bodies corporate, from buying or selling underlying assets as principal through the operator’s platform or any DAP issued by the operator or a related body corporate. The only exceptions are where the operator acts as agent, or where the client has instructed that the order be executed with the operator as principal counterparty (and, for matched principal trades, neither side is the operator or a related entity). Instant buy and convert products should fit within the second exception. An in-house desk quoting on the operator’s own order book will not.

This ban would restrict an in-house or affiliated desk providing liquidity in pairs that would otherwise be thin. The ban would push that liquidity to unrelated third parties. ASIC asks whether there are circumstances in which principal trading through the platform should be permitted.

3.     Liquidity providers and market makers

Liquidity is where the principal trading ban, the T&S Standards and the commercial reality of Australian exchanges meet. ASIC’s standards do not stop an operator sourcing liquidity from outside Australia, but anyone providing liquidity or market making on a DAP must be engaged under an enforceable written agreement with the operator. Section 22 of the draft T&S Standards builds on that requirement, and prescribes:

(a)   a written liquidity support arrangement;

(b)   stress and intervention terms; and

(c)   disclosure.

Where affiliated market makers fit

Because of the principal trading ban, a related body corporate cannot quote on the operator’s own platform. The drafts still leave room for group liquidity elsewhere. A tied dealer may execute every client order by matched principal trade or back-to-back with a single named related body corporate, and a tied broker may route every order to a group venue offshore. Groups may therefore separate a tied dealer instant buy channel backed by group liquidity from an order book relying only on unrelated providers.

4.     Your business model now drives your obligations

Draft RG 000 introduces separate issue authorisations for custody-only DAPs, DAPs acting as agent, DAPs acting as principal (including matched principal) and DAPs acting as trading venue provider, as well as TCPs. A platform running more than one model will need more than one authorisation, and the T&S Standards apply differently to each.

• Order matching DAPs must operate in a fair, orderly and transparent manner with non-discretionary matching, publish their settlement arrangements, and make pre-trade (for order books) and post-trade data available free of charge through a continuous, real-time, machine-readable feed.

• Agency DAPs owe best execution and must maintain access to at least two adequate liquidity sources.

• Principal (OTC), tied broker and tied dealer models are exempt from best execution, subject to disclosure. The tied broker model, where the Australian operator routes every order to a single venue run by a related body corporate, is expressly accommodated. The operator must tell clients if that venue is not ASIC-regulated and that they cannot trade if it becomes unavailable.

• Where a platform offers more than one execution method, the client must select the method for each order.

5.     Custody, client money and potential debanking problems

The Asset-Holding Standards closely follow the existing custody, IDPS, MDA (managed discretionary account) and responsible entity asset-holding instruments. Underlying assets must be held on trust, under Pt 7.8 where it applies, or under another arrangement (such as bailment) that is legally effective and gives reasonably effective protection on insolvency. Foreign law arrangements must be assessed and recorded. Omnibus wallets are permitted, subject to attributable records, reconciliation each business day, a written policy reviewed every 13 months and correction of any shortfall within two business days. Operators remain responsible for third-party custodians and sub-custodians, whose agreements must contain detailed mandatory terms.

Client money is where exchanges will feel the most friction. Money that is not client money under Pt 7.8 must still be held in trust under an arrangement governed by Australian law. ASIC is not proposing relief from Pt 7.8, but openly acknowledges that debanking may leave operators unable to maintain a compliant s981B account, and asks what alternatives it should consider. Exchanges with first-hand banking experience should put it on the record. ASIC is not proposing to require domestic custody, but is seeking views on an emergency fallback giving the local entity access to private keys if an offshore parent fails.

6.     Operational rules at a glance

Obligation	What the drafts propose
Platform rule changes	28 days’ written notice of any material change
Withdrawals	No material restriction on withdrawal except for legal, fraud, cyber, sanctions or AML/CTF reasons. Fees capped at reasonable cost
Staking and lending	Written disclosure and express authorisation. Cannot be a condition of holding assets or keeping an account. Clients must be able to exit without withdrawing.
Wallet reporting	Quarterly report to ASIC of wallet structures and addresses within 10 business days, plus notice of material changes
Token identifiers	Unique identifier per class of token (such as ISO 24165, where practicable) and a public list. ETH, ERC-20 ETH and ETH on a layer 2 are separate classes.
Listing and delisting	Admission and monitoring arrangements for all tokens, whether or not financial products. On delisting, publish, notify all clients and keep trading for 7 days where reasonably practicable
Shelf space and own tokens	No benefit for preferencing a token, except reasonable cost recovery. Conflicts arrangements for tokens the operator or its group issues or has a financial interest in.
Misconduct	Prohibition in platform rules, published intervention rights, and notice to ASIC whenever a client is suspended or terminated for misconduct.

7.     Perimeter points to watch

• No CAR model for issuers. A DAP or TCP cannot be issued under a corporate authorised representative appointment, and the authorised intermediary exemption is unavailable except for related bodies corporate.

• Outsourcing will not avoid the regime. An operator remains responsible for anything done by its agents, and a trading platform does not escape DAP status by outsourcing custody.

• Existing licensees already authorised to deal in digital assets that are financial products will still need to add DAP authorisations.

8.     Welcome developments

• ASIC will count experience gained in unregulated activities over the past 10 years towards responsible manager competence under RG 105 Option 5, which helps crypto-native applicants.

• Alternative compensation arrangements may be accepted where professional indemnity cover genuinely cannot be obtained.

• Electronic disclosure relief will be extended to the DAP/TCP Guide, which may be combined with the FSG, and anticipated regulations will remove the need for a PDS for underlying financial products with no identifiable issuer or an overseas issuer with no PDS available.

• Custodial staking offered by a licensed operator will not be a separate managed investment scheme or financial product.

• The INFO 225 update will also indicate that a network where only KYC-approved participants can validate is unlikely to be public digital token infrastructure, and that licensing turns on present conduct, not a future decentralised state.

Next steps

This consultation underlines the rapid transformation of the digital asset industry as it becomes integrated into global regulated markets. This poses new compliance obligations and challenges, but regulatory certainty also unlocks new opportunity. At nearly 200 pages, this is a bumper consultation and there is a lot of detail to digest. That detail is important and will impact how Australian digital asset businesses operate on a day-to-day basis and the viability of some business models. ASIC is encouraging feedback from industry and digital asset businesses that are affected should consider making submissions individually or via industry bodies. 

Written by Steven Pettigrove and Will Deeb