Australia: INFO 225 is finally here!

By Daniel Knight, Ben Kneebush and Madison Jeffreys

The Australian Securities and Investments Commission (ASIC) published its long-awaited updates to Information Sheet (INFO 225). This represents the result of ASIC’s consultation process on the existing document (which we have discussed here).

Financial Product Classifications

ASIC has adopted much of the proposed draft version released late last year, expanding on guidance for ‘facilities for making a financial investment’ and including hypothetical examples.

ASIC has also included five new worked examples and clarified several of the more contentious digital asset classifications. For instance:

• Staking: ASIC’s view is that certain managed staking arrangements will be facilities for making financial investments or managed investment schemes (MISs), where contribution is made to the staking process and / or value is added beyond the underlying staking arrangement.
  
• Stablecoins: ASIC considers that stablecoins will generally be considered non-cash payment facilities (or, in some circumstances, interests in a MIS). 
  
• Wallets: ASIC’s view is that digital asset wallets will incorporate a non-cash payment facility where users can send digital assets to third parties (such as via a ‘pay anyone’ feature), even for providers of non-custodial wallet.
  
• Securities and interests in an MIS: ASIC has provided some key indicators of when a digital asset is a security or MIS interest. ASIC says a token is likely to be a security if it carries rights similar to a share in a company (e.g. voting rights, dividend or profit share rights). On MISs, ASIC gave the example of presales of tokens as part of a new blockchain launch.  ASIC said this could be an MIS because token proceeds will be used to build the blockchain and subscribers receive value in the form of tokens.

Transitional Arrangements and Relief

Recognising the potentially significant impact of the new guidance in INFO 225, ASIC has issued a widely applicable ‘no-action’ letter to assist providers with the transition towards licensing from now until 30 June 2026. The letter provides that ASIC does not intend to take regulatory action against a person for the failure to hold an Australian Financial Services (AFS) licence or an Australian Market Licence (AML), subject to a range of conditions.

To rely on ASIC’s no-action position, an applicant must comply with a range of conditions, such as lodging an AFSL application by June 2026 and obtaining Australian Financial Complaints Authority (AFCA) membership. The release of INFO 225 is timely in the context of Treasury’s release of exposure draft legislation for payment service providers, as well as exposure draft legislation for digital asset platforms and tokenised custody platforms. Other than in respect of stablecoins, Treasury’s reforms do not currently touch on the financial product classifications in INFO 225.  As such, INFO 225 may continue to be relevant even once the reforms take effect.  However, many in the industry are hoping that Treasury’s reforms will also address some of the complexity around financial product classification, as well as creating a smoother pathway for exchanges which may require an AML.