The New MDA Instrument. New Rules? Not Quite.
ASIC has remade the MDA instrument. Here’s what actually changed (and what didn’t).
The MDA world hasn’t been turned upside down. ASIC describes the changes as “non-fundamental”.
But there are a few pieces that have been moved, removed and tweaked — and some of them will require changes to your MDA documentation.
So, before everyone collectively files the new Instrument under “same as before”, here’s the MDA Guru’s quick tour of what actually changed.
For those of us who spend an unhealthy amount of time reading MDA legislation, there was a small moment of excitement on 25 September 2026 when ASIC registered the new ASIC Corporations (Managed Discretionary Account Services) Instrument 2026/720.
It replaces ASIC Instrument 2016/968, which was due to sunset on 1 October 2026.
ASIC describes the changes as “non-fundamental”, and that is probably a fair description of the overall result. The basic MDA regulatory framework remains familiar.
But “non-fundamental” does not mean “nothing to do here”.
There are some genuine changes to disclosure, Investment Programs, compliance notifications, MDA contracts and client reporting that MDA providers should understand.
So, what actually changed?
First, the big picture
The new Instrument continues the fundamental MDA model.
It continues to provide conditional relief for MDA providers and external MDA custodians from certain managed investment scheme, disclosure, fundraising and other requirements, subject to compliance with the MDA-specific conditions.
The core requirements around the MDA contract, Investment Program, personal advice and suitability reviews, asset holding, custody, insurance, compliance measures and client reporting remain.
In other words, ASIC has not reinvented MDAs.
But it has made a number of changes that will require MDA providers to look carefully at their existing documentation and processes.
And, as usual with MDA legislation, the detail matters.
The FSG Changes: Removing Duplication and Relocating Some Information
The most noticeable changes concern the information required to be included in the Financial Services Guide.
It is tempting to describe these simply as “moving information from the FSG to the Investment Program”, but that isn’t quite right.
There are actually two different things happening.
Responsibility for reviewing the Investment Program
Under the previous Instrument, the FSG was required to state who was responsible for reviewing the Investment Program.
The Investment Program requirements already dealt with the circumstances and responsibility for reviewing suitability. ASIC has therefore removed the duplicated FSG requirement and retained the information in the Investment Program.
That is a genuine simplification.
External MDA Adviser and External MDA Custodian
The position is different for the External MDA Adviser and External MDA Custodian.
Under the previous Instrument, the FSG specifically required the name and contact details of:
the External MDA Adviser; and
the External MDA Custodian.
Those details were not previously separate Investment Program requirements.
The new Instrument removes those specific FSG requirements and instead requires the Investment Program to contain:
the name and contact details of the External MDA Custodian, where applicable; and
the name and contact details of the External MDA Adviser, where the Investment Program is prepared by an External MDA Adviser.
That is therefore more than simply removing duplication. It changes where that information needs to be documented.
For MDA providers using External MDA Advisers or External MDA Custodians, the Investment Program template will need to be checked accordingly.
Instructions concerning portfolio rights
ASIC has also removed the specific FSG requirement concerning whether, and how, a client may give instructions regarding the exercise of rights relating to financial products in the client’s portfolio.
That information is already addressed through the Investment Program requirements, which require the Investment Program to explain whether and how the client may give instructions affecting the licensee’s discretion.
So, the overall effect of the FSG changes is a combination of removing duplication and relocating certain information into the Investment Program.
The important practical point is that an FSG review should not be done in isolation. If information is being removed from the FSG, the corresponding Investment Program requirements need to be checked at the same time.
The ASIC Non-Compliance Notification Period Gets Longer
This is probably the clearest operational change.
Under the old Instrument, certain parties could lose the benefit of the relevant relief if a non-compliance matter was not notified to ASIC within 10 business days, with the notification requiring the “full particulars” of the failure.
The new Instrument changes this to:
30 days, rather than 10 business days; and
“material details” rather than “full particulars”.
The new provision applies across the relevant MDA relief provisions and is framed more closely around the language used in the reportable situations regime.
This is certainly more workable from an operational perspective.
But it should not be interpreted as giving MDA providers 30 days to decide whether a compliance issue matters.
The trigger remains tied to when the person knows, or is reckless as to whether, there are reasonable grounds to believe the relevant non-compliance situation has arisen.
So the change is best viewed as more time to notify ASIC and a more proportionate information requirement, rather than a relaxation of the underlying compliance obligation.
The Mandatory ASIC Termination Clause has Gone
The previous Instrument required the MDA contract to provide that the contract would terminate if ASIC notified the licensee that it could no longer rely on the relevant MDA relief.
That specific requirement has been removed.
The new Instrument still requires the MDA contract to deal with termination and what happens to client portfolio assets following termination, including the requirement that the licensee cease exercising discretion once the contract has terminated.
What has disappeared is the specific requirement to say that the contract automatically terminates because ASIC has notified the licensee that it may not rely on the MDA relief.
That means MDA providers should review their standard MDA agreement and remove or amend any wording that exists solely to satisfy the former requirement.
The Quarterly Reporting Alternative is Being Removed
There is also a change to client reporting.
Under the existing framework, an MDA provider that did not provide clients with electronic access to relevant information on a substantially continuous basis could use quarterly reporting as an alternative.
ASIC is removing that alternative for financial years ending after 30 June 2027.
The change brings MDA reporting more closely into line with the approach applying to IDPS and IDPS-like arrangements and, according to ASIC, reflects current industry practice.
This means MDA providers that currently rely on quarterly reporting as an alternative to substantially continuous electronic access should be looking at their reporting arrangements now rather than waiting until 2027.
The 13-Month Suitability Review is not the New Change
There has been some understandable interest in whether the new Instrument changes the annual MDA review requirements.
It doesn’t.
The new Instrument continues to require the MDA provider or External MDA Adviser to give personal advice about whether the MDA contract, including the Investment Program, remains suitable in light of the client’s relevant personal circumstances:
before entering into the MDA contract; and
at least once every 13 months thereafter.
So there is no new “13-month rule” hiding in the 2026 remake.
Likewise, the new Instrument does not create a new prescribed consequence for a client who does not respond to an annual review request.
That remains an important operational and compliance issue for MDA providers, but it is not one of the changes introduced by this particular remake.
What About Wholesale MDA Clients?
The remake does not appear to fundamentally change the distinction between retail and wholesale MDA clients.
The MDA relief framework continues to contain specific provisions applying where an MDA provider provides MDA services to a person as a retail client.
That remains important for AFSLs operating both retail and wholesale MDA businesses.
Having both retail and wholesale MDA clients under the same AFSL does not, by itself, turn the wholesale clients into retail clients. Nor does the new Instrument establish a new “mixed retail/wholesale” MDA category.
The key issue remains understanding which requirements apply to the particular client and ensuring the AFSL’s MDA framework appropriately accommodates the different client circumstances.
So, What Should MDA Providers Actually Do?
So, what should MDA providers actually do?
There is no need to panic and rewrite the entire MDA framework from scratch.
But the new Instrument should be treated as a proper documentation and compliance review exercise.
At a minimum, MDA providers should consider:
FSG
Check the MDA-specific FSG disclosures and remove requirements that have now been removed, while ensuring that the FSG continues to contain all information required under the new Instrument.
Investment Program
Update the Investment Program to address the new requirements, particularly:
who is responsible for reviewing the Investment Program;
the name and contact details of the External MDA Custodian, where applicable; and
the name and contact details of the External MDA Adviser, where applicable.
MDA Agreement
Review the termination provisions, particularly any wording requiring termination solely because ASIC has notified the provider that it cannot rely on the MDA relief.
Compliance Procedures
Update procedures dealing with MDA non-compliance notifications to reflect the new 30-day timeframe and the requirement to provide material details.
Client Reporting
Determine whether the business currently relies on the quarterly reporting alternative and, if so, what needs to change before the first financial year ending after 30 June 2027.
Templates and Operational Documents
Finally, don’t forget the documents sitting around the formal MDA framework — adviser checklists, compliance checklists, onboarding procedures, Investment Program templates, FSG templates and internal review procedures.
The MDA Takeaway
ASIC has not fundamentally changed the MDA regime.
The new ASIC Corporations (Managed Discretionary Account Services) Instrument 2026/720 is, as ASIC describes it, a remake containing a number of non-fundamental changes.
But there are enough changes to make a review worthwhile.
The biggest lesson is probably that the changes aren’t all doing the same thing.
Some requirements have been removed because they duplicated information elsewhere.
Some information has been moved from the FSG into the Investment Program.
Some requirements have simply been removed, such as the specific ASIC-triggered termination provision.
And some operational requirements have been changed, such as the 10-day to 30-day ASIC notification period and the eventual removal of the quarterly reporting alternative.
So, no — the MDA world hasn’t been turned upside down.
But the new Instrument has moved a few pieces around the board.
And, as anyone who has worked with MDAs for more than about five minutes will know, those little pieces have a habit of becoming rather important once ASIC comes looking.
This article is provided for general information purposes only and does not constitute legal, financial or personal advice. MDA providers should consider the application of the new Instrument to their particular business, client arrangements and documentation.
If your MDA framework was built around Instrument 2016/968, MDA Guru can help you identify which documents and controls need changing — and which ones do not.