ASIC Corporations (Stablecoin Distribution Exemption) Instrument 2025/631

• Distributor. The instrument defines a Distributor as “a person other than a Named Stablecoin Issuer”. This is a critical limitation: the exemption is not available to the issuers of AUDM or AUDF themselves. An issuer that wishes to distribute its own stablecoin must still assess its own licensing obligations and cannot rely on this instrument. The term “person” is broad enough to capture individuals, partnerships, companies, and other entities, but only if they are not one of the two named issuers.

• Named Stablecoin and Named Stablecoin Issuer. These are defined by a table in subsection 5(2). As at the compilation date (8 October 2025, after amendment), the table lists two items. Item 1 names Catena Digital Pty Ltd ACN 669 901 302 as the issuer of “AUDM”. Item 2 names Forte Securities Australia Pty Limited ACN 614 579 734 as the issuer of “AUDF”. No other stablecoins or issuers are covered. The definitions are static; any change to the token’s name, or any transfer of the stablecoin to a different issuer, would remove it from the exemption’s scope.

• “Only because” - the qualifying trigger for the market licence and CS facility licence exemptions. Sections 6 and 7 require that the person operates a financial market (or a clearing and settlement facility) “only because one or more Named Stablecoins is a financial product”. This language is restrictive. If the Distributor operates a market or facility for reasons other than (or in addition to) the stablecoin being a financial product - for example, because other financial products are also traded - the exemption does not apply to that activity. The person would need a licence for the broader operation. Similarly, for the AFSL exemption in section 8, the exemption applies for the provision of the listed financial services; it does not exempt the distributor from needing a licence for any other financial services they might provide (such as personal advice or dealing in other financial products).

• Retail client. The definition of retail client in section 5(1) cross‑references sections 761G and 761GA of the Act. For a financial market or a clearing and settlement facility, it adopts the test of whether a financial service provided to the person in relation to trading (or transactions) on that facility would be provided to the person as a retail client under those sections. Otherwise, the general definition under the Act applies. This matters because the condition in section 9 only attaches when the Distributor deals with a retail client. If the Distributor deals only with wholesale clients, no condition applies - the exemption is unconditional.

• Reasonable steps - the operative standard in the condition. The instrument does not define “reasonable steps”. It is a familiar phrase from the Corporations Act and common law, but its application here is context‑dependent. At a minimum, a Distributor should document its process for obtaining and distributing the issuer’s current PDS. The note about section 1012C reinforces that the exemption does not displace the underlying statutory disclosure obligations; if an issuer has not prepared a PDS, the Distributor may still have separate obligations under the Act.

• Sunset. The instrument is repealed at the start of 1 June 2028. This is not a conditional repeal; it is automatic. After that date, the exemptions cease to exist, and any Distributor who then engages in the activities without a licence would be in breach of the Act unless an alternative exemption is available.

The instrument directly affects a narrow class of actors: persons who are not Catena Digital Pty Ltd or Forte Securities Australia Pty Limited, but who distribute, advise on, make a market in, or provide custodial services for AUDM or AUDF. In practice, this includes cryptocurrency exchanges that list these tokens, over‑the‑counter trading desks, wallet providers that offer custody, and any person who gives general advice about them (for example, in promotional material or market analysis). It also potentially affects operators of trading platforms or clearing and settlement facilities whose only connection to market licensing is that they facilitate transactions in AUDM or AUDF.

The instrument does not affect the named issuers themselves. Catena Digital and Forte Securities must still satisfy any licensing requirements they have under the Act for their own activities, such as issuing the stablecoin (which may involve financial product disclosure, AFSL obligations, or both, depending on the structure). Nor does the instrument affect any other stablecoin issuer not listed, or any distributor of those other stablecoins. Those entities remain subject to the full licensing regime.

Retail clients are indirect beneficiaries. For them, the condition requiring the Distributor to pass on the issuer’s PDS may provide some information about the stablecoin. However, the condition only triggers if the issuer has prepared a PDS; if not, the retail client receives no mandated disclosure under this instrument. The note reminding of section 1012C suggests that the exemption does not eliminate the possibility that a PDS must be provided irrespective of the exemption.

Competitors are differentially affected. The exemption lowers the compliance burden and cost for distributing AUDM and AUDF relative to all other stablecoins. For example, a smaller stablecoin issuer that is not named may find that distributors are less willing to carry its token because doing so would require the distributor to hold an AFSL or other licence. This could entrench the market position of the two named stablecoins and create a barrier to entry for new participants. The instrument therefore has a potentially anti‑competitive effect, even if unintentional, because it is limited to two specific commercial entities.

ASIC is also affected: it reduces its regulatory oversight burden over distribution of these two stablecoins, but also implicitly confirms that the tokens are financial products (otherwise no exemption would be needed). This may shape how ASIC approaches other stablecoins in the future.

The primary right created by the instrument is the right to engage in the specified activities without holding the relevant licence. This right arises automatically for any Distributor who satisfies the definitions, without the need to apply to ASIC for an individual exemption. The right is not absolute; it is conditional on compliance with section 9 when dealing with retail clients.

The correlative duty is the condition in section 9: a Distributor that relies on any exemption and deals with a retail client must take reasonable steps to give or make available to that retail client a Product Disclosure Statement for the Named Stablecoin that is the most current in use, but only if one has been prepared by the Named Stablecoin Issuer. This duty does not apply if the client is wholesale. It also does not apply if the issuer has not prepared a PDS at all; in that case, the Distributor has no duty under this instrument, but the note references the separate obligation under section 1012C of the Act. The condition is ongoing: if the issuer updates its PDS, the Distributor must take steps to make the new version available.

The Distributor has no duty to verify the content of the PDS, nor to supplement it. The duty is merely to pass on the issuer’s document. “Reasonable steps” likely includes providing a current copy, hosting it on a website, or providing a link; what is reasonable will depend on the circumstances, including the method of distribution, the technology used, and the client’s access.

The instrument does not impose any duties on the Named Stablecoin Issuers. However, the existence of the exemption may influence their behaviour: if an issuer prepares a PDS, it enables distributors to rely on the exemption with retail clients. If an issuer does not prepare a PDS, distributors dealing with retail clients cannot rely on the exemption unless they take other steps to comply with the Act (such as obtaining their own AFSL). This creates an incentive for issuers to prepare a PDS to widen their distribution network.

There is no right of action created by the instrument. A retail client who does not receive a PDS when the Distributor should have provided one cannot sue under this instrument; any remedy would arise under the general law or other provisions of the Corporations Act (e.g., for unlicensed conduct if the exemption is lost, or for failure to provide a PDS under the Ch 7 disclosure provisions).

This instrument creates no new offences or civil penalties. Enforcement consequences flow from the underlying Corporations Act if a person acts outside the exemption or fails to comply with its condition.

If a Distributor conducts activities that require a licence and does not hold one, the exemptions in sections 6‑8 provide a defence - but only if the Distributor meets the conditions. Failure to comply with the condition in section 9 means the exemptions are not available for that particular transaction or client relationship. The Distributor would then be in breach of the licensing provisions (subsection 791A(1), 820A(1), or 911A(1)), which carry significant penalties. For example, a failure to hold an AFSL when required is a criminal offence under subsection 911A(1), with penalties for individuals of up to 5 years imprisonment or fines under the Act, and for corporations of fines up to the greater of a prescribed amount or three times the benefit obtained. Civil penalty provisions also apply, allowing ASIC to seek declarations of contravention, pecuniary penalties, and disqualification orders.

The condition itself is not separately penalised; instead, non‑compliance removes the shield of the exemption. This means ASIC could bring an action for unlicensed conduct, and the Distributor would have no defence. The onus of proof would be on the Distributor to demonstrate they took reasonable steps, as the exemption is an exception to the licensing requirement.

ASIC has powers to investigate suspected breaches, including requiring documents, conducting hearings, and seeking court orders. The instrument does not limit ASIC’s surveillance or enforcement discretion. Because the exemption is narrow and temporary, ASIC may view non‑compliance seriously as it undermines the condition intended to protect retail clients.

Additionally, the note about section 1012C warns that if no PDS has been prepared by the issuer, the Distributor may still have an obligation to provide one in certain circumstances (such as an offer for sale). Failure to provide a required PDS attracts its own civil and criminal penalties under the Corporations Act. The instrument does not exempt the Distributor from those obligations.

The instrument sits within the regulatory framework of the Corporations Act 2001. It is an exemption under specific provisions that allow ASIC to vary or exclude the operation of licensing requirements. It does not alter any other part of the Act, nor does it affect other legislation.

Most importantly, the instrument does not determine whether AUDM or AUDF are financial products. It assumes that they may be, and provides an exemption for the event that they are. If a court later holds that these stablecoins are not financial products, the exemption is unnecessary but harmless. If a court holds that they are financial products, the exemption ensures that distributors who only deal in these tokens are not caught by licensing requirements. However, the exemption does not prevent the application of other financial‑product obligations, such as the misleading or deceptive conduct provisions (section 1041H), the hawking prohibition (section 992AA), the market manipulation provisions, or the managed investment scheme rules.

The instrument interacts with other ASIC exemptions, such as the regulatory sandbox (ASIC Corporations (FinTech Licensing Exemption) Instrument 2020/904). A distributor that already relies on the sandbox for other financial services may also rely on this instrument if the conditions are met. The two exemptions can coexist, but the distributor must ensure compliance with each separately.

For anti‑money laundering and counter‑terrorism financing purposes, the instrument has no effect. The AML/CTF Act 2006 and rules apply to providers of digital currency exchange services, including dealing in stablecoins. A distributor that exchanges AUDM or AUDF for fiat or other crypto must still register with AUSTRAC and comply with reporting and record‑keeping requirements. The instrument only addresses licensing under the Corporations Act, not AML/CTF obligations.

For consumer protection, the Australian Consumer Law applies. Giving advice or dealing in stablecoins may be subject to the prohibition on unconscionable conduct, false or misleading representations, and unfair contract terms. The instrument does not provide any immunity from those provisions.

State and territory laws, such as those on fraud, electronic transactions, or property rights, are also unaffected. The exemption is purely federal, confined to specific licensing provisions.

The sunset clause means the instrument will repeal itself on 1 June 2028 unless earlier revoked or replaced. After that date, the normal licensing regime applies fully to the distribution of AUDM and AUDF, unless a new exemption or legislative change is made. Distributors who have built a business relying on the exemption may face a cliff‑edge transition.

The instrument was originally registered as F2025L01117 on 19 September 2025 and commenced on 20 September 2025. It was amended once, by the ASIC Corporations (Amendment) Instrument 2025/679 (F2025L01233), registered on 7 October 2025 and commencing on 8 October 2025. The compilation date is 8 October 2025, so the instrument reflects the amended text only.

The amendment affected three provisions. The simplified outline in section 4 was amended, likely to reflect changes in the stablecoin list or the scope of the exemption. The definitions in section 5 were amended, almost certainly to add the second stablecoin (AUDF) and its issuer (Forte Securities Australia Pty Limited). The original instrument as registered may have listed only AUDM and Catena Digital; the amendment expanded the table. The condition in section 9 was also amended, possibly to clarify the obligation in light of the additional stablecoin or to adjust the language about “most current in use”.

Additionally, section 2 (commencement) was repealed in accordance with section 48D of the Legislation Act 2003. This is a standard housekeeping measure once the instrument commences; the commencement provision is no longer needed.

The amendment history endnote also shows that section 2 was “rep. s48D LA”. This indicates that the repeal was not by the amending instrument but by the automatic operation of the Legislation Act. No further amendments have been made.

The instrument is a compilation, meaning it incorporates the amendment. The original text before amendment is not publicly available in this compilation, but the amendment history indicates the provisions affected. No application, saving or transitional provisions are noted for either instrument.

As at the compilation date of 8 October 2025, there is no reported litigation concerning this instrument. The instrument is less than a month old and has a specific, narrow scope. No cases before the Federal Court, state courts, or the Administrative Appeals Tribunal have been identified that interpret its provisions or challenge its validity.

Given the instrument was made under ASIC’s exemption powers, any legal challenge would likely be by way of judicial review under the Administrative Decisions (Judicial Review) Act 1977 or the common law, on grounds such as error of law, unreasonableness, or ultra vires. The instrument is worded carefully, and the authority provisions are specific, so a challenge would face high hurdles. However, the limited list of stablecoins could attract criticism that ASIC has acted inconsistently by favouring two private entities over others; this could theoretically be challenged if it were shown to be an improper exercise of power. No such challenge has materialised.

There is also no litigation against distributors for non‑compliance with the condition, presumably because the instrument is too recent for enforcement action to have reached the courts. ASIC may issue infringement notices or seek court orders in the future if it finds breaches.

Given the sunset, it is possible that the instrument will expire before any significant litigation develops. Practitioners should monitor ASIC’s enforcement updates and any test cases involving the underlying licensing provisions as they relate to stablecoins generally.

1. Only two stablecoins, only today. The exemption applies exclusively to AUDM issued by Catena Digital and AUDF issued by Forte Securities. If Catena or Forte change their corporate names, restructure, or transfer the stablecoin to another entity, the exemption may cease to apply because the definitions refer to specific ACNs and token names. Any unauthorised clone or fork of these stablecoins is not covered.

2. “Only because” is a trap for multi‑product platforms. A cryptocurrency exchange that lists AUDM alongside other tokens that are financial products (e.g., other stablecoins, tokenised securities) cannot rely on the market licence exemption. The exchange operates a financial market for multiple products, not only because of the named stablecoin. The exemption is worded to cover only operators whose sole nexus to licensing is the stablecoin. Most real‑world trading platforms will not qualify for sections 6 and 7.

3. Retail client condition cuts both ways. For wholesale clients, no condition applies - the exemption is unconditional. But the moment a retail client is involved, the distributor must take reasonable steps to provide the issuer’s PDS. If the distributor cannot confirm whether a client is retail or wholesale (e.g., automated on‑boarding), it may be safer to treat all as retail. The definition of retail client under sections 761G and 761GA is not trivial and may require a product‑by‑product assessment.

4. No PDS prepared by issuer = no condition, but possible trap. If the issuer has not prepared a PDS, the condition does not apply. However, the note warns of section 1012C, which may itself require a PDS for subsequent offers. A distributor dealing in an unbranded stablecoin without an issuer PDS might still be required to provide a PDS under the Act, and the exemption does not relieve that obligation. This creates a false sense of simplicity.

5. The exemption is personal to the distributor, not transferable. Any person who meets the definition of Distributor can rely on it. But if a distributor engages another entity to provide custodial or dealing services (e.g., white‑label arrangements), the subcontractor may not be covered if they are not the Distributor. The exemption does not extend to agents unless they themselves fall within the definition.

6. Sunset cliff. The instrument is repealed at the start of 1 June 2028. Distributors who plan their business model around this exemption must prepare to obtain the appropriate licences well before that date. The sunset is not conditional on anything; it will happen. If the instrument is not renewed or replaced, any continued activity without a licence after that date is a breach.

7. No grandfathering. The instrument does not contain transitional provisions for existing distributors after the repeal. ASIC could issue a new instrument, but there is no guarantee.

8. Interaction with other ASIC relief. If a distributor already holds an AFSL, relying on this exemption might still be beneficial, but it does not reduce the need to comply with the AFSL conditions (e.g., compliance systems, record‑keeping). The exemption only removes the requirement to hold the licence; it does not create a lower compliance standard.

9. “Reasonable steps” is litigable. There is no guidance on what constitutes reasonable steps. A distributor that provides a PDF on request may be fine, but one that merely mentions the existence of a PDS on a website may not be. ASIC will look at the practical steps taken.

Compliance with this instrument requires a methodical approach, but the steps are manageable for a distributor that deals only with AUDM and AUDF.

Step 1: Confirm coverage. Check that the stablecoin you are distributing is exactly “AUDM” from Catena Digital Pty Ltd ACN 669 901 302 or “AUDF” from Forte Securities Australia Pty Limited ACN 614 579 734. If the token name or issuer differs even slightly, the exemption does not apply. Also confirm that you are not the issuer - you must be a person other than the Named Stablecoin Issuer.

Step 2: Identify which activities you conduct. Determine whether you are operating a financial market, operating a clearing and settlement facility, providing general advice, dealing (other than issuing), making a market, or providing custodial/depository services. If you are doing any of those activities only in relation to the stablecoin, and only because the stablecoin is a financial product, the exemption may apply. If you also do those activities in relation to other assets that are financial products, you still need a licence for the broader operation; the exemption may not help for sections 6 and 7. For section 8, you can still rely on the exemption for the listed services in relation to the stablecoin even if you conduct other licensed activities, as long as you hold a licence for those other activities.

Step 3: Determine client classification. For each client or transaction, classify the client as retail or wholesale under sections 761G and 761GA. If the client is wholesale, the condition does not apply, and you may rely on the exemption without further steps. If the client is retail, proceed to Step 4.

Step 4: Obtain the issuer’s current PDS. Contact the issuer (Catena or Forte) to obtain the most current PDS for the stablecoin. If no PDS has been prepared, note that the condition does not apply, but consider whether you have an independent obligation under section 1012C to provide a PDS for any offer to retail clients. If the issuer has prepared a PDS, you must take reasonable steps to give or make it available to retail clients before or at the time of providing the service, or ensure the client has ready access to it.

Step 5: Document reasonable steps. Keep records of how you obtain and distribute the PDS. For example, maintain a file of the current version, note the date of receipt, and record the method of distribution (e.g., email, download link, automated pop‑up). If the issuer updates the PDS, repeat the process. “Reasonable steps” may be interpreted by ASIC as proactive distribution, not just making it available on request.

Step 6: Monitor other obligations. The exemption does not cover other laws. Ensure compliance with AML/CTF registration and reporting, ASIC Act provisions, and any requirements under the Corporations Act outside licensing (e.g., hawking, advertising, dispute resolution). If you already hold an AFSL for other products, continue to meet all conditions of that licence.

Step 7: Plan for sunset. Monitor the instrument’s repeal date (1 June 2028). If you intend to continue distributing after that date without a licence, seek timely advice and apply for the necessary licence well in advance. Consider transitional relief that ASIC may introduce, but do not rely on it.

Step 8: Review periodically. The instrument may be further amended or replaced. Check the Federal Register of Legislation and ASIC updates. If the list of stablecoins expands, your compliance steps may need to be updated.

By following these steps, a distributor can lawfully rely on the exemption and avoid the significant penalties for unlicensed conduct. The key is establishing systems to verify client status, PDS currency, and to document the steps taken.