Australia’s turning point for the digital asset industry has arrived. In April this year Parliament passed the Corporations Amendment (Digital Assets Framework) Act (2026) (the Act). The Act received royal assent on 8 April 2026 and is expected to commence on 9 April 2027.
If you operate or are thinking of building a platform that holds digital assets or tokenises real-world assets on behalf of your customers, you need to understand what is coming and how it could affect you. See our previous blog post on DAPs “Digital Asset Platforms: Navigating Australia’s New Digital Asset Regulation”.
The Act creates new categories of financial products called “tokenised custody platforms” (TCPs) and “digital asset platforms” (DAPs) within Australia’s financial services licensing (AFSL) framework. Below we break down what TCPs are, the interaction with managed investment schemes (MIS), how they differ from DAPs and what you should be thinking about to prepare for the reforms.
These changes will continue to operate alongside ASIC’s INFO Sheet 225 which deals with the treatment of digital assets under the existing financial services regime.
Why these reforms matter
Australia’s digital asset sector continues to rapidly evolve, but a regulatory gap has left billions of dollars in client assets held by intermediaries without sufficient oversight. Failed platforms, frozen withdrawals, asset commingling, inadequate disclosure and outright fraud are the regulatory context in which these reforms have been built.
The Act is designed to close that gap by creating two new types of custodial digital asset platforms within the existing Australian financial services framework, using the familiar AFSL regime rather than creating an entirely new licensing system. The Act is also designed to ensure there is regulatory clarity for the digital asset ecosystem, increasing consumer and investor confidence and protection.
Now is the time to assess your model.
Need to know:
- TCPs are a new type of financial product for operators who want to tokenise real-world or other underlying assets on a 1:1 basis. An operator holds the asset and issues a digital token that confers the right to redeem or take delivery of that asset.
- A TCP is only regulated as a financial product (not as an MIS) if it meets specific statutory carve outs, otherwise the MIS regime applies instead.
- Operators of TCPs will need an AFSL and must comply with new ASIC minimum standards, platform rules, and a tailored disclosure document (the DAP/TCP Guide).
What is a tokenised custody platform?
A TCP is a facility where the operator:
- identifies one or more underlying assets (which can be anything other than money; for example, gold, shares, interests in an MIS, bonds, real estate, carbon credits, digital tokens, and more)
- creates a single digital token for each underlying asset where possessing that token confers the right on the token holder to redeem or direct delivery of the underlying asset
- holds each underlying asset for or on behalf of the token holder, whether as trustee, bailee, or is otherwise obliged to ensure the underlying asset is dealt with on the instructions of the token holder.
Examples of TCPs include:
- a tokenised gold platform, where the operator holds physical gold bullion and creates tokens entitling holders to take delivery of a set amount of gold
- a tokenised securities platform, where the operator holds existing shares or bonds and creates tokens recording who is entitled to them
- a bridging or wrapping platform, where the operator holds digital tokens on one network and creates new tokens on a different network identifying who is entitled to the original tokens.
TCPs do not include software programs (such as non-custodial bridges) where no operator takes possession of client assets, or platforms that tokenise money to create stablecoins (they fall under the separate stored value facility framework proposed by Treasury under the payment system modernisation reforms).
Interaction with MISs
The definition of a TCP is broad enough to overlap with the definition of a MIS. To address this, definition of an MIS has also been modified under the Act to exclude TCPs that meet certain criteria.
The definition of an MIS in the Corporations Act 2001 (Cth) broadly involves an arrangement where persons contribute money or money’s worth to obtain rights to benefits generated by a common enterprise between the persons. They are generally products that involve pooling of funds or fractionalisation of assets to generate benefits that otherwise would not be available to the investors. Because TCPs can involve a pool of assets being held beneficially by the operator for token holders, there is scope for the two to overlap.
Therefore, there is a clear carve out between TCPs and MISs, such that a TCP is only regulated as a TCP if it is not an MIS.
To facilitate this carve out, the definition of an MIS has been amended so that TCPs that meet certain criteria are incapable of being an MIS.
A TCP will be excluded from the definition of an MIS, where:
- clients under the platform have the right to redeem, or direct delivery of, the underlying assets
- the operator of the platform acts only on client instructions in relation to decisions about acquisition, disposal or use of the underlying assets
- the operator cannot negotiate or determine, to a material extent, any rights of clients relating to the underlying assets
- all underlying assets belong to the same class of asset (for example, all gold, or all listed shares, a mixed pool of gold and silver would not qualify)
- the digital token can only be divisible to the same extent that the underlying asset is reasonably capable of being divisible in a way that each part can be physically delivered. This prevents fractionalisation, i.e. a TCP cannot be used to issue fractional interests in an indivisible asset (such as a piece of artwork), because such interests would properly belong in the MIS regime.
If a facility meets the definition of a TCP but does not fall within this exclusion from the definition of an MIS, then the facility is regulated as a MIS with all the obligations that come with that regime (including registration, a responsible entity and compliance with the MIS provisions).
How TCPs differ from DAPs
A DAP and a TCP are both custody models, but where a DAP is a platform that custodies digital assets (such as a wallet or exchange), a TCP custodies real-world or other underlying assets, including digital assets, and creates a digital token that embodies the holder’s right to redeem or take delivery of that specific asset.
Importantly, a facility cannot be both a DAP and a TCP. Where a facility could meet both definitions, it is treated as a TCP, i.e. the TCP definition takes priority.
New licensing requirements for TCP operators
The ordinary AFS licensing conditions will apply to TCPs, but the additional requirements below will also apply.
| Minimum standards on asset-holding and transactions and settlements | ASIC will make new legislative instruments establishing asset-holding standards and transactional and settlement standards for TCP operators. These are outcomes-based and proportionate, designed to apply across different business models without creating unnecessary barriers for smaller or innovative operators. |
| Platform rules | Operators must establish platform rules that govern eligibility criteria for clients, settlement methods, disclosure of counterparty and operational risks, and the arrangements for depositing, redeeming and directing delivery of assets. These rules have contractual force between the operator and each client. |
| DAP/TCP Guide | Instead of a traditional product disclosure statement, operators must provide clients with a DAP/TCP Guide before the platform is issued. This guide must cover the platform’s custody arrangements, fees and charges, risks, client rights (including withdrawal and voting rights), and complaint processes. |
| No custodial or depository authorisation needed | Operators of TCPs that tokenise financial products will not need a separate custodial or depository authorisation, as the new TCP framework covers this function. |
Operators will need to build platform rules and disclosure framework early. The DAP/TCP Guide and platform rules are substantive documents with significant legal and contractual effect. Many platform operators will be doing this for the first time and there may be limited ability to compare publicly available examples. They should not be left as last-minute compliance exercises. However, at present, guidelines on these do not yet exist. ASIC expects to consult on these frameworks at the end of 2026.
Things to consider:
- Map your model now. Determine whether your facility is a DAP, a TCP, an MIS, or something else entirely. Seek legal advice as appropriate.
- Futureproof for AFSL requirements. If you do not currently hold an AFSL, you will need to apply for one. If you do hold an AFSL, you may need to vary your authorisations. The Act provides a six-month transitional period from 9 April 2027, during which operators who do not yet hold an appropriate AFSL can continue to operate while lodging an application. If you apply during that window, the new obligations do not apply until ASIC makes its decision. However, if you fail to apply during the transition period, the new requirements will apply immediately at the end of it. You need to consider getting in early, as applying for an AFSL is no easy task, particularly if you have not yet identified responsible managers with relevant regulated experience. We can assist with this process.
For operators of TCPs, the classification questions are complex and the compliance stakes are high for getting this wrong. Being ahead of the curve now will be a material competitive and regulatory advantage.
Hamilton Locke’s Funds and Financial Services team are advising clients across the sector on structuring, licensing, and preparing for these reforms.
For more information, please contact Jaime Lumsden, Nicholas Pavouris and Ruth Fesseha.
