ASIC Corporations (Consent to Deductions—Ongoing Fee Arrangements) Instrument 2021/124

The instrument’s principal concept is a prescribed form of “written consent” for deduction of ongoing fees from an account holder’s account within the meaning of the Corporations Act. The instrument treats key terms as defined in the Act and references those definitions directly in its own definitions provision (section 4). Those definitions include: account holder, anniversary day (as defined by subsection 962G(3) of the Act), fee disclosure statement (as defined by subsection 962H(1) of the Act), fee recipient (section 962C of the Act), ongoing fees (section 962B of the Act) and ongoing fee arrangement (section 962A of the Act). The instrument therefore operates as a specification layer that sits on top of the Act’s conceptual framework.

Written consent is narrowly defined in practice by the instrument. It must be given in writing or by electronic agreement and must bear a date (section 5(2)). The instrument specifies the substantive content that must be present in the written consent (section 5(3)), which includes identification of the account holder (5(3)(a)), the fee recipient and contact details (5(3)(b)), and an explanation of the reason for seeking consent (5(3)(c)). The instrument distinguishes between two factual scenarios for fee quantification: existing ongoing fee arrangements that may be renewed, and new ongoing fee arrangements that might be entered into (sections 5(3)(d) and (e)). In both scenarios, the consent must set out the frequency and amount of each ongoing fee payable during an “upcoming year”, understood as a 12‑month period starting either on the next anniversary day (for existing arrangements) or on a day no more than 30 days after the fee recipient provides all required information (for new arrangements).

Where precise fees cannot be determined, the instrument requires a reasonable estimate together with an explanation of the method used to calculate it (section 5(3)(f)). The instrument also requires details of each account from which fees will be deducted and, for each account, the amounts to be charged unless an estimate is required (section 5(3)(g)). The instrument mandates two specific statements be included in the consent: that the consent will cease to have effect up to 150 days after the anniversary day for the ongoing fee arrangement, and that the account holder can withdraw consent or terminate or vary the arrangement at any time by notice in writing to the fee recipient (section 5(3)(h)(i) and (ii)).

Finally, the instrument imposes a clarity requirement: the written consent must be worded and presented in a clear, concise and effective manner (section 5(4)). It also permits combination of the written consent content with a fee disclosure statement if the fee disclosure statement includes the required information and meets the same clarity standard (section 5(5)). These conceptual elements create a template of mandatory and optional elements that determine whether a consent complies for the purposes of section 962T of the Act (see section 5(1)).

The instrument directly affects two classes of private parties: account holders and fee recipients, as those terms are used in the Corporations Act and adopted by the instrument (section 4). Account holders are the persons from whose accounts ongoing fees are to be deducted; the instrument requires that the account holder give written consent in a specific form and that the consent bear the account holder’s name as it is at the time of signing (section 5(2) and 5(3)(a)). Fee recipients are the persons who may deduct or arrange for the deduction of ongoing fees; the instrument requires the written consent to identify the fee recipient and include contact details as they are at the time the consent is signed (section 5(3)(b)).

Financial services businesses, advisers, platforms and trustees that operate ongoing fee arrangements will be materially affected because the instrument prescribes what must be contained in consents they collect to lawfully deduct ongoing fees under the Act. Those entities must design consent forms and processes that capture the required information, ensure dated signatures or other written agreement, produce reasonable estimates where necessary and provide the prescribed statements about cessation and withdrawal rights (section 5(2), 5(3)(f) and 5(3)(h)). Entities that rely on combining consent information with a fee disclosure statement will need to ensure the fee disclosure statement includes all required consent information and meets the clarity requirement (section 5(5)).

Regulatory actors are affected indirectly because the instrument was made by ASIC under section 962T of the Act (section 3). The compilation notes record registration and amendment dates that are likely relevant to compliance timelines: the instrument registered 24 March 2021 and commenced 1 July 2021, with an amendment registered 28 June 2023 and commencing 29 June 2023 (Endnote 1). Entities that implemented consent templates prior to the 2023 amendment will need to check whether the amendments to section 5(3)(a) and (b) affect their existing documents (Endnote 2).

Other affected parties include administrators of client accounts, third‑party payments processors or custodians who must act on valid consents to effect deductions. While the instrument prescribes what a valid consent must contain, it does not itself describe the operational steps a custodian or payments processor must follow to act on a consent; those operational consequences will flow from the relationship and contract between the fee recipient and the institution handling the account.

The instrument creates duties primarily on the fee recipient (or the person seeking consent on behalf of the fee recipient) to obtain a written consent that complies with the instrument if they are to rely on the account holder’s consent for deductions, as expressed in section 5(1). The duty is procedural and content‑specific: a compliant written consent must be signed or otherwise agreed to in writing, may include electronic agreement, and must bear a date indicating when the consent was given (section 5(2)). Fee recipients must ensure the consent includes the account holder’s name as at signing and the fee recipient’s name and contact details at the time of signing (section 5(3)(a)-(b)). They must also include an explanation of why the consent is sought (section 5(3)(c)).

There are duties regarding fee disclosure for an upcoming year. For existing ongoing fee arrangements the written consent must state the frequency and amount of each ongoing fee the account holder will pay during the upcoming year defined as the 12 months beginning on the next anniversary day (section 5(3)(d)). For a new arrangement the consent must state the frequency and amount during the upcoming year defined as a 12‑month period beginning on a day that is no more than 30 days after the fee recipient provides all required information to the account holder (section 5(3)(e)). If amounts cannot be determined, the fee recipient must include a reasonable estimate and explain the method used to arrive at that estimate (section 5(3)(f)). The fee recipient must provide details of each account from which ongoing fees will be paid and, for each account, the amounts to be paid, unless an estimate is required (section 5(3)(g)).

The written consent must include two explicit statements that protect account holder rights: first, that the consent will cease to have effect up to 150 days after the anniversary day for the arrangement; second, that the account holder may withdraw their consent or terminate or vary the arrangement at any time by notice in writing to the fee recipient (section 5(3)(h)(i)-(ii)). Those statements are mandatory content elements of the consent.

The instrument imposes a presentation duty: the written consent must be worded and presented in a clear, concise and effective manner (section 5(4)). This applies to consents that are standalone and to those combined with a fee disclosure statement; where combined, the fee disclosure statement must contain the consent information and it must also be worded and presented clearly and concisely (section 5(5)).

The instrument affords rights to account holders. They retain the right to withdraw consent or to terminate or vary the ongoing fee arrangement at any time by notice in writing to the fee recipient (section 5(3)(h)(ii)). The instrument also entitles account holders to be given specific quantification (or a reasonable estimate and method) of ongoing fees for an upcoming 12‑month period (sections 5(3)(d)-(f)), and to receive clear, concise and effective disclosures (section 5(4) and 5(5)). The instrument does not itself prescribe remedies or penalties for breach; the instrument’s legal force is that it specifies requirements “for the purposes of section 962T” (section 5(1)), so practical consequences of non‑compliance will be determined under the Act and other applicable law.

The instrument itself does not create explicit penalty provisions or an enforcement regime within its text. It is made under the authority of section 962T of the Corporations Act 2001 (section 3), and its stated function is to specify requirements for written consent for the purposes of that section (section 5(1)). The instrument therefore operates as a specification under the Act and its legal effect is tied to the Act’s enforcement and sanctioning mechanisms rather than creating new standalone penalties.

Because the instrument prescribes the form and content of a “written consent” that an account holder must give in order to permit deduction of ongoing fees, failure to comply with the instrument’s requirements will affect whether a particular consent satisfies the requirements that the Act demands via section 962T. The instrument does not, however, set out the consequences (such as civil penalties, criminal offences, or contract remedies) that flow from a non‑compliant consent; those consequences (if any) are governed by the Corporations Act and any related regulatory or civil mechanisms established by law. The compilation notes and endnotes in the instrument list registration and amendment dates (Endnote 1) and amendments to particular provisions (Endnote 2) but do not list enforcement actions or penalties.

For practitioners, the practical enforcement landscape therefore requires consulting the Corporations Act itself and related ASIC guidance to determine civil or regulatory consequences of non‑compliance. The instrument supplies the content standard for a valid consent; enforcement or remediation will be a matter of applying Act provisions and any relevant regulatory instruments or court decisions to the facts of a given case. The instrument’s clarity requirement (section 5(4)) and the mandatory inclusion of specific statements (section 5(3)(h)) create objective criteria which regulators or courts may use to assess the validity of a consent, but the instrument does not itself set out a regime of penalties, timelines for enforcement, or appeal routes.

The instrument is a subordinate instrument that operates by reference to and for the purposes of the Corporations Act 2001. Its definitions section expressly adopts several Act provisions as the source of meaning for statutory terms used in the instrument: account holder (subsections 962R(1) and 962S(1) of the Act), anniversary day (subsection 962G(3)), fee disclosure statement (subsection 962H(1)), fee recipient (section 962C), ongoing fees (section 962B) and ongoing fee arrangement (section 962A) (section 4). The instrument therefore does not replace or attempt to redefine those concepts; rather it supplies procedural and content specifications that must be met for consents under the regime established by the Act.

Specifically, the instrument identifies that it is prescribing the requirements for giving written consent “for the purposes of section 962T of the Act” (section 5(1)). That establishes a direct interactional relationship: the instrument’s requirements become the measuring standard for written consents contemplated by section 962T of the Act. Because the instrument permits written consent to be given electronically (section 5(2)), it also interacts with any other laws or regulatory standards that govern electronic signatures and electronic communications, although the instrument itself does not reference those laws.

The instrument authorises consents to be combined with fee disclosure statements (section 5(5)). Fee disclosure statements are themselves defined by the Act (subsection 962H(1)), so the instrument interacts with any obligations imposed by the Act regarding fee disclosure statements and the timing and manner of providing them. The timing rules for the “upcoming year” differ depending on whether the consent relates to a renewed existing arrangement or a new arrangement (sections 5(3)(d)-(e)), which means compliance requires mapping the instrument’s timing rules to any corresponding timing or renewal rules set out in the Act or in contractual arrangements.

The instrument does not purport to displace or override other statutory obligations nor to alter the substantive rights of parties outside its specified scope. It supplies specific content and presentation requirements for written consents to deduct ongoing fees; where the Act or other laws impose wider or different obligations (for example, separate privacy, consumer protection or electronic transactions laws), those laws remain applicable in addition to the instrument’s content requirements. The instrument does not address conflict of laws or provide a hierarchical rule; its scope is limited to prescribing consent requirements under the Act.

The compilation records the instrument’s registration and amendment history. The instrument was registered as 2021/124 on 24 March 2021 and commenced on 1 July 2021 (Endnote 1). It was subsequently amended by instrument 2023/512, which was registered on 28 June 2023 and commenced on 29 June 2023 (Endnote 1). The compilation itself is identified as Compilation No. 1 and is current as in force on 29 June 2023, incorporating any commenced amendments to that date (header).

Endnote 2 sets out the amendment particulars and shorthand notations used in the compilation. It records that Section 2 was repealed (notation: “Section 2 rep. s48D LA”), and it records that Section 5(3)(a) and Section 5(3)(b) were amended by instrument 2023/512 (Endnote 2). The source does not reproduce the previous wording, nor does it provide the legislative history or explanatory material for each amendment beyond the registration and commencement dates shown in Endnote 1. The instrument’s own body shows the current text as at the compilation date.

Practically, entities that implemented consent forms or renewal procedures between 1 July 2021 and the amendment date will need to confirm whether the 2023 amendment materially changed the required content for the account holder’s name (section 5(3)(a) as amended) or the fee recipient’s name and contact details (section 5(3)(b) as amended). The compilation does not provide transitionary savings or grandfathering provisions in the endnotes; it records only the dates of commencement (Endnote 1). Users must therefore check the commencement date and the exact amended wording in the instrument itself to determine whether existing consents comply with the updated requirements.

The compilation does not record any litigation history. The document’s endnotes list only the instrument’s registration and amendment history (Endnote 1) and a brief amendment history table (Endnote 2). There are no cases referenced in the instrument, no judicial decisions cited, and no notes of court challenges or judicial review proceedings included in the compilation.

Because the instrument sets requirements for written consents under section 962T of the Corporations Act, any legal disputes about the interpretation or application of the instrument would be resolved by reference to the Act and the courts or tribunals that adjudicate disputes under the Corporations Act. Those judicial interactions are not part of this instrument’s text or its endnotes, and the compilation provides no extract or summary of any such cases.

Practitioners looking for litigation precedents that interpret the instrument or its requirements will therefore need to search court and tribunal databases and ASIC publications for any decisions or administrative actions taken after the instrument’s commencement or after its 2023 amendment. The instrument itself provides the content standards that a court would apply where a dispute asks whether a particular written consent complied with section 5 and therefore satisfied the requirements of section 962T of the Act.

The instrument contains a number of drafting features and timing rules that can be sources of operational risk or uncertainty if not clearly understood and implemented.

1. Date and signature requirements. The instrument requires that a written consent be given by signing, or otherwise agreeing in writing (including electronically), and that it “must also bear a date indicating when the consent was given” (section 5(2)). Operational systems that capture electronic consents must reliably record the date of agreement. A missing date could mean the consent does not comply with the instrument, with consequences for whether deductions are authorised.

2. Identity at the time of signing. The account holder’s name must be included “at the time the account holder signs (or otherwise agrees in writing to the terms of) the written consent” (section 5(3)(a)). The fee recipient’s name and contact details must also be current at the time of signing (section 5(3)(b)). That timing specificity means changes after signing (for example, if the fee recipient reorganises or changes contact details) do not obviate the need for correct details at the signing moment.

3. Upcoming year timing differences. The “upcoming year” is defined differently for existing versus new ongoing fee arrangements (sections 5(3)(d) and (e)). For renewals the upcoming year begins on the next anniversary day; for new arrangements the upcoming year begins on a day that is no more than 30 days after the fee recipient gives or makes available all required information. The “no more than 30 days” rule for new arrangements imposes a sequencing requirement between provision of information and the start of the 12‑month period; practitioners must ensure their timelines for providing information align with this sequencing.

4. Estimates and the “reasonable” standard. Where precise amounts cannot be determined, the consent must include a “reasonable estimate” and an explanation of the method used to produce the estimate (section 5(3)(f)). What is “reasonable” may be contested in disputes. Fee recipients should document the estimation methodology and assumptions to reduce later challenge.

5. Multiple accounts and apportionment. The consent must include details of each account from which ongoing fees will be paid and, for each account, the amount of each ongoing fee the account holder will pay (section 5(3)(g)). If an account holder has multiple accounts or complex custody arrangements, obtaining and recording per‑account amounts can be administratively burdensome.

6. Consent cessation window. The instrument requires a statement that “the consent will cease to have effect up to 150 days after the anniversary day for the ongoing fee arrangement” (section 5(3)(h)(i)). The phrasing “up to 150 days” introduces a window rather than a single date, which could create operational uncertainty about when deductions must stop and whether notices given after a certain point are effective for a particular billing cycle.

7. Combination with fee disclosure statements. The instrument allows the consent content to be combined with a fee disclosure statement if the fee disclosure statement contains the required information and is clear and concise (section 5(5)). That is practically convenient but increases the risk that a general-purpose fee disclosure statement might omit a consent element or fail the clarity standard; if so the combined document would not satisfy the instrument’s requirements.

8. No procedural detail on withdrawal and acknowledgment. The instrument states the account holder can withdraw consent “at any time by notice in writing to the fee recipient” (section 5(3)(h)(ii)) but does not specify acknowledgement procedures, notice periods, or whether notice must be received by a particular address or channel. This can give rise to operational disputes over when a withdrawal takes effect.

9. Interaction with Act provisions not reproduced. The instrument adopts definitions and references Act sections (section 4). Practitioners must consult the Corporations Act for the full legal effect of terms such as “account holder”, “fee disclosure statement”, and “anniversary day” because the instrument does not reproduce those Act provisions.

10. Amendments. The instrument was amended in 2023 with changes to section 5(3)(a) and (b) (Endnote 2). Users who rely on earlier versions must ensure they are applying the current text as compiled to 29 June 2023 (header and Endnote 1).

These points highlight potential operational and legal pitfalls that arise from the instrument’s textual features, and which will need attention in templates, client communications, recordkeeping and dispute handling.

Compliance requires implementing procedures and documentation that ensure every written consent to ongoing fee deductions meets the instrument’s content, timing and presentation standards. The instrument’s requirements are set out in section 5, subsections (2) to (5). The following is a practical, source‑grounded checklist linked to those subsections.

1. Capture written agreement and date (section 5(2)). Ensure the consent form or electronic consent process records (a) a signature or other written agreement, including electronic agreement where used, and (b) a date indicating when the account holder gave consent. Electronic systems must capture and retain an accurate timestamp and evidence of assent.

2. Include mandatory content (section 5(3)(a)-(h)). The consent must contain:

   • The account holder’s name as at signing (5(3)(a)).
   • The fee recipient’s name and contact details as at signing (5(3)(b)).
   • An explanation of why consent is being sought (5(3)(c)).
   • For existing arrangements, frequency and amount of each ongoing fee for the upcoming year beginning on the next anniversary day (5(3)(d)).
   • For new arrangements, frequency and amount of each ongoing fee for the upcoming year beginning on a day no more than 30 days after the fee recipient provides all required information (5(3)(e)).
   • If exact amounts cannot be determined, a reasonable estimate and an explanation of the method used to compute the estimate (5(3)(f)).
   • Details of each account from which fees will be paid and amounts per account, subject to the estimate rule (5(3)(g)).
   • Statements that the consent will cease to have effect up to 150 days after the anniversary day and that the account holder can withdraw consent or terminate or vary the arrangement at any time by notice in writing to the fee recipient (5(3)(h)(i)-(ii)).

3. Ensure clarity and presentation (section 5(4)). Draft the consent wording and layout so that it is clear, concise and effective. That standard applies to standalone consents and to consents combined with fee disclosure statements (5(5)). Use plain language, avoid technical clutter, and ensure required statements are prominent.

4. If combining with a fee disclosure statement, ensure the fee disclosure statement contains all required consent information and meets the clarity standard (section 5(5)). Where a fee disclosure statement is used, do not duplicate conflicting information across documents; ensure the fee disclosure statement is the single source of the consent content when combined.

5. Document estimation methodology (section 5(3)(f)). Where estimates are provided, maintain contemporaneous records of the assumptions, calculations and data used to produce the estimate. This reduces risk of disputes over the “reasonable” standard.

6. Recordkeeping and audit trail. Retain the dated consent, evidence of how consent was given (including electronic logs where applicable), and any materials provided to the account holder at or before signing. Track the anniversary day for each ongoing fee arrangement to manage the cessation window “up to 150 days after the anniversary day” (section 5(3)(h)(i)).

7. Withdrawal and notice handling (section 5(3)(h)(ii)). Implement receipt and acknowledgement processes for withdrawal or termination notices sent “in writing” by account holders. Define internal cut‑off times for processing notices and stopping deductions to reduce operational disputes.

8. Update templates after amendments. Ensure consent templates reflect the instrument’s current text. The instrument was amended in 2023; the amendment affected section 5(3)(a) and (b) (Endnote 2). Confirm templates capture the account holder’s name “at the time” of signing and the fee recipient’s name and contact details “at the time” of signing as required.

9. Training and governance. Train staff who solicit consents on the instrument’s timing distinctions between existing and new arrangements, the need for date capture, and the requirement to include per‑account amounts. Embed supervisory checks to verify that consents provided are compliant before deductions occur.

10. Coordinate with custodians and payment processors. Where deductions are effected by third parties, ensure contractual or operational acceptance of the instrument’s requirements. Provide counterparties with the evidence they require to rely on a consent, including dated consent records and clear identification of the account(s) and the amounts to be deducted.

Following these steps aligns procedures with the instrument’s content and presentation standards in section 5. The instrument does not set out enforcement or remedial procedures; accordingly, compliance should be documented to demonstrate adherence to the instrument’s mandatory elements in the event of regulatory scrutiny or disputes.