Funds Update - 6 June 2025

In this Funds Update for 6 June 2025.

1. Full Federal Court considers scope of representative exemption
2. ASIC report on compliance plans
3. ASIC appeals digital asset product decision to High Court
4. ASIC shares industry feedback on public and private markets discussion paper
5. ASIC reindexes fees in reissued INFO 30

 

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Full Federal Court considers scope of representative exemption 

On 30 May 2025, the Full Federal Court handed down its much anticipated decision in relation to ASIC v BPS Financial Pty Ltd (BPS).

In the first instance decision, the Federal Court had held that BPS had been exempt from the requirement to hold an Australian financial services licence (AFSL) when issuing a digital currency product because it had been appointed as an authorised representative of an AFSL holder (see our 17 May 2024 Funds Update here).

On appeal, the Full Federal Court found that on the facts, BPS had not been issuing the product in its capacity as an authorised representative but rather had been issuing the product in its own right. This decision confirms that, depending on the facts, an authorised representative exemption may be available, noting that:

“it does not follow that every act of the authorised representative in providing the relevant financial service is provided in that capacity. Whether the authorised representative’s conduct is in that capacity will depend on the facts”.   

The full judgement is available here.

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ASIC report on compliance plans 

On 2 June 2025, ASIC released findings from its recent investigation into the adequacy of compliance plans used by 50 responsible entities of registered managed investment schemes.

ASIC found shortcomings in relation to reportable situations reporting obligations, product design and distribution obligations and internal dispute resolution processes and reporting obligations. ASIC recommends responsible entities to consider, when reviewing or preparing a compliance plan, whether the plan:

• identifies all the obligations in operating the fund?
• identifies the functions and the officers responsible for performing and for monitoring each control?
• specifies how the performance of each control measure will be monitored?
• identifies an adequate frequency for performing each control and for the monitoring of that performance?
• provides for the flow of useful information about control performance to the board or a compliance committee?
• requires adequate record keeping?
• contains sufficient detail and is up to date?

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ASIC appeals digital asset product decision to High Court 

On 21 May 2025, ASIC sought special leave from the High Court of Australia to appeal the Full Federal Court’s decision that a digital asset product (which allowed customers to loan cryptocurrency and receive fixed interest rates) was not an interest in a managed investment scheme and a financial product and that the issuer did not require an AFSL.

We reported on the reasoning behind the Full Federal Court decision here and the earlier Federal Court decision here.

ASIC seeks clarification on the definition of a ‘financial product’ and when interest-earning products and products involving convertible assets fall within this definition.  For special leave to be granted, the High Court must find there to be a question of law of sufficient public importance.

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ASIC shares industry feedback on public and private markets discussion paper

On 4 June 2025, ASIC shared industry feedback by releasing over 50 submissions made in response to its discussion paper: DP Australia’s evolving capital markets: A discussion paper on the dynamics between public and private markets. See our Funds Update from 28 February 2025 here as well as our submission here.

ASIC has summarised the key ‘themes’ from these submissions as follows:

• Structural and cyclical factors are shaping both public and private markets.
• Public market adjustments would improve and enhance their attractiveness.  
• Private markets are here to stay and grow, there is demand for any regulatory guidance to be measured.
• Private credit has the potential to be good for the economy and investors.
• Superannuation is a mature and significant force in Australia and a significant and structural influence in markets and investment.
• More data collection and private market transparency is needed.

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ASIC reindexes fees in reissued INFO 30

On 1 June 2025, ASIC reissued INFO 30 Fees for commonly lodged documents with the updated indexation of fees and charges for the new financial year effective 1 July 2025.

There have been no changes to the financial services category of events such as AFSL applications and variations but the costs of registering schemes and foreign companies have increased and late lodgement fees have increased.

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