The provisions of the Treasury Laws Amendment (2016 Measures No 1) Act 2017 relating to client money commenced on 4 April 2018. The amendments are to Chapter 7 of the Corporations Act and significantly restrict the circumstances in which Australian financial services licensees may use client money. As of 4 April 2018, the client money rules impose record-keeping, reconciliation and reporting obligations on Australian financial services licensees that hold 'derivative retail client money' within the meaning of the Corporations Act, unless the client money relates to a derivative that is traded on a fully licensed domestic market, such as ASX 24.
ASIC has updated Regulatory Guide 212 Client money relating to dealing in OTC derivatives (RG 212) to guide AFS licensees and investors through the client money regime set out in the Corporations Act. This topic is also discussed in the ASIC section below.