{"id":"F2017L01272","name":"ASIC Corporations (Wholesale Equity Scheme Trustees) Instrument 2017/849","slug":"asic-corporations-wholesale-equity-scheme-trustees-instrument-2017-849","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":97195,"registerId":"commonwealth-F2017L01272-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"ASIC Corporations (Wholesale Equity Scheme Trustees) Instrument 2017/849","content":"![Commonwealth Coat of Arms and ASIC logo](image.001.jpeg)\n\nASIC Corporations (Wholesale Equity Scheme Trustees) Instrument 2017/849\n\nAbout this compilation\n\nCompilation No. 2\n\nThis is a compilation of ASIC Corporations (Wholesale Equity Scheme Trustees) Instrument 2017/849 as in force on 1 September 2023. It includes any commenced amendment affecting the legislative instrument to that date.\n\nThis compilation was prepared by the Australian Securities and Investments Commission.\n\nThe notes at the end of this compilation (the endnotes) include information\n\nabout amending instruments and the amendment history of each amended provision.\n\nContents\n\n[Part 1—Preliminary](#_Toc146186876)\n\n[1 Name of legislative instrument](#_Toc146186877)\n\n[3 Authority](#_Toc146186878)\n\n[4 Definitions](#_Toc146186879)\n\n[Part 2—Exemption](#_Toc146186880)\n\n[5 Licensing relief for eligible trustees](#_Toc146186881)\n\n[6 Where the relief applies](#_Toc146186882)\n\n[7 Conditions](#_Toc146186883)\n\n[8 Exclusion from reliance](#_Toc146186884)\n\n[Part 3—Transitional](#_Toc146186885)\n\n[9 ASIC Class Order \\[CO 07/74\\]](#_Toc146186886)\n\n[Endnotes](#_Toc146186887)\n\n[Endnote 1—Instrument history](#_Toc146186888)\n\n[Endnote 2—Amendment history](#_Toc146186889)\n\nPart 1—Preliminary\n\n1 Name of legislative instrument\n\nThis is the ASIC Corporations (Wholesale Equity Scheme Trustees) Instrument 2017/849.\n\n3 Authority\n\nThis instrument is made under paragraph 926A(2)(a) of the Act.\n\n4 Definitions\n\nIn this instrument:\n\nAct means the Corporations Act 2001.\n\neligible trustee means, in relation to a wholesale equity scheme, a trustee of the scheme that is a body corporate that does not control any entity which is an issuer of an investment product held by the body corporate.\n\nNote: “control” is defined in section 50AA of the Act.\n\nexempt liability means, in relation to a wholesale equity scheme, a liability arising from any act or omission relating to a wholesale equity financial service for which the trustee of the scheme may be indemnified from the trust property.\n\nincidental property, in relation to a wholesale equity scheme, means cash, deposits or current accounts with an Australian ADI or interests in a cash management trust that are held for no more than three months pending the acquisition of investment products, or expenditure or distribution to members.\n\ninvestment product means each of the following:\n\n(a) a security;\n\n(b) an option to acquire, by way of transfer, a security covered by paragraph (a), (b) or (c) of the definition of security in section 761A of the Act;\n\n(c) a managed investment product;\n\n(ca) a foreign passport fund product;\n\n(cb) an option to acquire, by way of transfer, a financial product covered by subparagraph 764A(1)(bb)(i) or (ii);\n\n(d) a financial product covered by paragraph 764A(1)(ba) of the Act;\n\n(e) an option to acquire, by way of transfer, a financial product covered by subparagraph 764A(1)(b)(i) or (ii) of the Act;\n\n(f) an option to acquire, by way of transfer, a financial product covered by subparagraph 764A(1)(ba)(i) or (ii) of the Act.\n\nmanager: see section 6.\n\nold class order means ASIC Class Order \\[CO 07/74\\] as in force immediately before its repeal.\n\nPF 209 means ASIC Pro Forma 209: Australian financial services licence conditions as at the date of this instrument.\n\nrelevant financial conditions, in relation to an Australian financial services licence, means conditions to the effect of conditions 13 (base level financial requirements), 21 (financial requirements for holding client money or property), 22 (financial requirements for licensee transacting with clients) and 28 (audit opinion on financial requirements) of PF 209.\n\nrepresentative has the meaning given by section 910A of the Act.\n\ntrust property of a wholesale equity scheme means:\n\n(a) contributions of money or money’s worth to the scheme; and\n\n(b) money borrowed or raised by the trustee for the purposes of the scheme; and\n\n(c) property acquired, directly or indirectly, with, or with the proceeds of, contributions or money referred to in paragraph (a) or (b); and\n\n(d) income and property derived, directly or indirectly, from contributions, money or property referred to in paragraph (a), (b) or (c).\n\ntrustee: see section 5.\n\nwholesale equity financial services: see section 5.\n\nwholesale equity scheme means a trust that is operated under a managed investment scheme to which all of the following apply:\n\n(a) the scheme is not registered; and\n\n(b) all of the trust property (other than incidental property) consists of investment products; and\n\n(c) at all times the value of investment products which are quoted on a financial market does not exceed 20% of the trustee’s reasonable estimate of the market value of the trust property;\n\n(d) no interests in the scheme have been issued to a person as a retail client.\n\nPart 2—Exemption\n\n5 Licensing relief for eligible trustees\n\nA person (trustee) who is an eligible trustee of a wholesale equity scheme does not have to comply with subsection 911A(1) of the Act for the provision of the following financial services (wholesale equity financial services):\n\n(a) dealing in (other than by issuing to a person as a retail client) investment products that form part of the trust property of the wholesale equity scheme; and\n\n(b) providing a custodial or depository service in relation to the investment products.\n\n> Note 1: A trustee may also have the benefit of paragraph 911A(2)(b) of the Act which will allow it to issue interests in a wholesale equity scheme without an Australian financial services licence if certain circumstances exist.\n\n> Note 2: ASIC Corporations (Miscellaneous Technical Relief) Instrument 2015/1115 provides relief from subsections 911A(1) and 911B(1) of the Act to a person who provides financial services on behalf of a person who does not need an Australian financial services licence because of an exemption under section 926A of the Act.\n\n6 Where the relief applies\n\nThe exemption in section 5 is available where all of the following apply:\n\n(a) a related body corporate (the manager) of the trustee holds an Australian financial services licence that:\n\n(i) authorises the manager to provide all of the wholesale equity financial services that are provided by the trustee in reliance on section 5; and\n\n(ii) contains conditions to the effect that the manager must:\n\n    (A) as far as possible, comply with the Act as if the trustee were providing those wholesale equity financial services as the manager’s representative; and\n    (B) have in place a deed poll that contains enforceable, unlimited and irrevocable covenants, for the benefit of each person (beneficiary) to whom the trustee provides a wholesale equity financial service, to the effect that the manager will indemnify the beneficiary in relation to any liability (other than an exempt liability) that arises from the trustee’s provision of a wholesale equity financial service to the beneficiary; and\n    (C) for the purposes of the relevant financial conditions of the manager’s Australian financial services licence—treat the assets, liabilities, cash inflows and cash outflows of the trustee as though they were included in the assets, liabilities, cash inflows and cash outflows of the manager;\n\n> Note: The manager will also need to comply with sections 912AA and 912AC of the Act (as notionally inserted by ASIC Corporations (Financial Requirements for Responsible Entities, IDPS Operators and Corporate Directors of Retail CCIVs) Instrument 2023/647 and ASIC Corporations (Financial Requirements for Custodial or Depository Service Providers) Instrument 2023/648 and if otherwise applicable to the manager) as if the assets, liabilities, cash inflows and cash outflows of the trustee were included in the assets, liabilities, cash inflows and cash outflows of the manager: see notional subsections 912AA(2A) and 912AC(2A) of the Act.\n\n(b) if the trustee or manager becomes aware or should reasonably have become aware of matters that give it reason to believe that the trustee has failed to comply, other than in an immaterial respect, with the conditions in section 7, 10 business days have not elapsed without full particulars of the failure having been provided to ASIC in writing (to the extent that the trustee or manager knows those particulars or would have known them if it had undertaken reasonable enquiries).\n\n7 Conditions\n\n(1) The trustee must comply with:\n\n(a) for so long as the trustee relies on the exemption in section 5—conditions 13(a) and (b) of PF 209 as if the trustee were a financial services licensee whose licence contained those conditions; and\n\n(b) section 912AC (other than subsections (4) to (7)) of the Act (as notionally inserted by ASIC Corporations (Financial Requirements for Custodial or Depository Service Providers) Instrument 2023/648) as if:\n\n(i) from the time the trustee first relies on the exemption in section 5 until the time the trustee ceases to rely on the exemption, the trustee were a financial services licensee:\n\n(A) whose licence authorises it to provide a custodial or depository service; and\n\n(B) to whom section 912AC applies; and\n\n(ii) the references in subsection 912AC(10) to “other financial requirements in conditions on its licence” were references to the conditions mentioned in paragraph (a); and\n\n(iii) subsection 912AC(10) did not require the audit opinion to deal with compliance with, or a requirement under, subsection 912AC(4) or (7); and\n\n(iv) the requirement in paragraph 912AC(11)(a) to lodge the audit opinion with the balance sheet required under section 989B were a requirement to lodge the audit opinion no later than 3 months after the end of the financial year of the trustee; and\n\n(c) sections 912AAC and 912AAD of the Act (as notionally inserted by ASIC Class Order \\[CO 13/1410\\]) as if, from the time the trustee first relies on the exemption in section 5 until the time the trustee ceases to rely on the exemption, the trustee were a financial services licensee whose licence authorises it to provide a custodial or depository service.\n\nNote: Condition 13 of PF 209 set out the base level financial requirements applicable to all financial services licensees who are not bodies regulated by the Australian Prudential Regulation Authority. Section 912AC of the Act (as notionally inserted by ASIC Corporations (Financial Requirements for Custodial or Depository Service Providers) Instrument 2023/648) sets out the tailored cash needs, net tangible assets and audit requirements that apply to licensees authorised to provide a custodial or depository service. Together, these conditions require the licensee to be solvent at all times and have positive net assets and to meet the tailored cash needs, net tangible assets and audit requirements. Sections 912AAC and 912AAD of the Act (as notionally inserted by ASIC Class Order \\[CO 13/1410\\]) set out standards that apply to a licensee in relation to the provision of a custodial or depository service by the licensee or a person engaged by the licensee. The exclusion of the requirements of notional subsections 912AC(4) to (7) of the Act in paragraph (b) means that the trustee will not have to comply with the net tangible assets requirement.\n\n(2) The trustee must take all reasonable steps to ensure that no interests in the scheme are acquired by a person as a retail client.\n\n> Note: The scheme will not be a wholesale equity scheme (and the exemption in section 5 will not be available) if any interests are issued to a person as a retail client: definition of wholesale equity scheme.\n\n8 Exclusion from reliance\n\nThe exemption in section 5 does not apply to a person if ASIC has given a notice in writing to the person that they may not rely on that exemption and ASIC has not withdrawn that notice in writing.\n\nPart 3—Transitional\n\n9 ASIC Class Order \\[CO 07/74\\]\n\n(1) If a trustee relied on the old class order immediately before its repeal and the repeal did not occur at the end of the financial year of the trustee, the old class order continues to apply in relation to the trustee, despite its repeal, until the end of that financial year. The exemption (including any related conditions) in the old class order from the requirement to hold an Australian financial services licence that is expressed to be made under paragraph 911A(2)(l) of the Act has effect under section 926A of the Act instead.\n\n> Note: ASIC Corporations (Miscellaneous Technical Relief) Instrument 2015/1115 provides relief from subsections 911A(1) and 911B(1) of the Act to a person who provides financial services on behalf of a person who does not need an Australian financial services licence because of an exemption under section 926A of the Act.\n\n(2) If a trustee relied on the old class order immediately before its repeal and then relies on the exemption in section 5:\n\n(a) in addition to the condition in section 7, the exemption in section 5 is subject to a condition that the trustee must lodge with ASIC a report referred to in sub-subparagraph 5(c)(iii) of the old class order that:\n\n(i) relates to the period commencing on the date referred to in sub-subparagraph 5(c)(iii)(A) or (B) of the old class order (as applicable) and ending on the day that the old class order ceases to apply in relation to the trustee; and\n\n(ii) is lodged no later than 3 months after the end of the period to which the report relates; and\n\n(b) paragraph 6(b) applies as if the reference to the conditions in section 7 included a reference to the condition in paragraph (a).\n\nEndnotes\n\nEndnote 1—Instrument history\n\n| Instrument number | Date of FRL registration    | Date of commencement | Application, saving or transitional provisions |\n| ----------------- | --------------------------- | -------------------- | ---------------------------------------------- |\n| 2017/849          | 26/9/2018 (see F2017L01272) | 27/9/2017            |                                                |\n| 2018/697          | 13/9/2018 (see F2018L01281) | 18/9/2018            | -                                              |\n| 2023/649          | 31/8/2023 (see F2023L01166) | 1/9/2023             | -                                              |\n\nEndnote 2—Amendment history\n\n> Note: ad. = added or inserted am. = amended LA = Legislation Act 2003 rep. = repealed rs. = repealed and substituted\n\n| Provision affected           | How affected |\n| ---------------------------- | ------------ |\n| Section 2                    | rep. s48D LA |\n| Section 4                    | am. 2018/697 |\n| Subparagraph 6(a)(ii) (note) | am. 2023/649 |\n| Paragraph 7(1)(b)            | am. 2023/649 |\n| Subsection 7(1) (note)       | am. 2023/649 |","sortOrder":0}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":false,"description":"The instrument maintains the original core purpose of the earlier class order: to grant targeted AFS licence relief to corporate trustees of narrowly defined wholesale equity schemes, conditional on a related licensed manager accepting responsibility. Subsequent amendments reflected in this compilation update cross-references and align the instrument to newer ASIC instruments and financial-requirements rules (notional insertions of 912AC/912AAC/912AAD and timing of audit filings). Those changes adjust who bears capital and audit obligations and clarify compliance mechanics but do not materially broaden the class of schemes or services that may rely on the relief. In short, the scope (who may rely and what services are covered) remains consistent with the instrument’s original purpose; the amendments mainly recalibrate how financial and audit responsibilities are allocated between trustee and manager."},"complexity_factors":["Relatively short instrument (9 substantive sections) but heavy cross‑referencing to the Corporations Act and multiple external ASIC instruments (PF 209; ASIC instruments that notionally insert sections 912AC, 912AAC, 912AAD).","Around 13 defined terms in section 4 with compound definitions (for example, investment product spans multiple subparagraphs), increasing interpretive load.","Multiple conditional requirements linking trustee relief to manager licence conditions and to the existence and terms of a deed poll (nested conditions in section 6).","Notional application of provisions (references to notional subsections and to later ASIC instruments) requires users to read and reconcile several other instruments and statutory insertions (sections 6 and 7 and endnotes).","Selective carve-outs and exceptions (e.g. exclusion of subsections 912AC(4)–(7) for net tangible assets) create asymmetrical obligations that require careful parsing (section 7(1)(b)).","Transitional provisions preserving earlier class order relief with additional reporting obligations create timeline-dependent complexity (section 9).","Operational compliance requirements include audit timing adjustments and treating trustee accounts as manager accounts for certain financial-condition calculations — these are technical and require accounting/legal coordination (section 7(1)(b)(iv) and 6(a)(ii)(C))."],"plain_english_summary":"**What this instrument does (mechanically)**\n\n- Grants an exemption from the requirement to hold an Australian financial services (AFS) licence for certain corporate trustees of particular unregistered managed investment schemes called “wholesale equity schemes” (see sections 4 and 5).  (The statutory power used is paragraph 926A(2)(a) of the Corporations Act.)\n\n- The exemption covers two specific financial services provided by the trustee: (a) dealing in the investment products that make up the scheme’s property (except issuing interests to retail clients); and (b) providing custodial or depository services for those investment products (section 5).\n\n- The exemption is available only where a related body corporate (the “manager”) holds an AFS licence that authorises the same services and accepts specified responsibilities by way of licence conditions (section 6). Key manager obligations required by the instrument (to be imposed as licence conditions) include:\n  - treating, as far as possible, the trustee’s activities as if the trustee were the manager’s representative (section 6(a)(ii)(A));\n  - having a deed poll that gives each beneficiary an enforceable, unlimited and irrevocable covenant that the manager will indemnify them for trustee liabilities other than “exempt liabilities” (section 6(a)(ii)(B)); and\n  - for the manager’s licence financial conditions, treating the trustee’s assets and liabilities as if they were the manager’s (section 6(a)(ii)(C)).\n\n- The trustee itself must meet a set of financial and operational conditions while relying on the exemption (section 7). These mainly require the trustee to comply, as if it were licensed, with:\n  - base-level financial requirements in PF 209 condition 13(a) and (b) (relating to solvency and net positive assets) (section 7(1)(a));\n  - most of the tailored custodial/depository financial and audit requirements in section 912AC of the Corporations Act as notionally inserted by later ASIC instruments (but excluding subsections 912AC(4)–(7), which means the trustee is not required to meet the net tangible assets test) (section 7(1)(b)); and\n  - standards for custodial/depository service providers in notionally inserted sections 912AAC and 912AAD (section 7(1)(c)).\n\n- The trustee must also take all reasonable steps to ensure no interests in the scheme are acquired by retail clients (section 7(2)). If ASIC serves a written notice that a person may not rely on the exemption, that person cannot rely on it (section 8).\n\n- Transitional rules preserve relief previously given under ASIC Class Order [CO 07/74] for trustees who relied on that order before it was repealed (section 9).\n\n**Who is affected**\n\n- Affected trustees: corporate trustees of unregistered managed investment schemes that meet the narrow definition of a “wholesale equity scheme” (section 4). Key features of such schemes include that all trust property (other than brief holding cash) consists of investment products, quoted investments never exceed 20% of trust property value, and no interests have been issued to retail clients.\n\n- Affected managers: related body corporates that hold AFS licences and agree (via licence conditions and deed poll) to accept indemnity and to treat the trustee’s assets/liabilities for financial requirements (section 6).\n\n- Beneficiaries (investors) in the scheme: they are the ultimate recipients of the manager’s deed-poll indemnity and the protections that come from the manager’s licence obligations (section 6(a)(ii)(B) and section 7).\n\n- ASIC: retains supervisory control through its power to issue notices withdrawing reliance on the exemption and through enforcement of licence conditions imposed on managers (section 8 and section 6).\n\n**Why it matters (official purpose and an operational test of that claim)**\n\n- Official purpose: the instrument provides targeted relief from holding an AFS licence for trustees of particular wholesale equity schemes where a related, regulated manager is already licensed and will accept financial and legal responsibility (see sections 5–6). This is described in the instrument as a regulatory convenience where licensing duplication can be reduced while maintaining investor protection via the manager’s obligations.\n\n- Testing that purpose against costs and incentives:\n  - Who pays / bears risk: The manager accepts expanded financial and legal responsibility (deed poll indemnity and inclusion of trustee assets/liabilities for the manager’s licence financial calculations) (section 6(a)(ii)(B)–(C)). That shifts practical liability and capital costs from the trustee to the manager’s licensed entity.\n  - Compliance burden shift: Trustees avoid direct licensing obligations but must still meet several financial, audit and conduct-related conditions as if they were licensees (section 7). Managers absorb additional compliance (treating trustee exposures as their own for financial requirement purposes) and must ensure deed poll enforceability.\n  - Incentives and substitution effects: The framework incentivises trustees to be part of a group with a licensed manager willing to accept the required covenants. Independent trustees without a related licensed manager cannot use this relief; managers may limit the number or type of trustee entities they support because of the added capital and indemnity exposure. The requirement to prevent retail clients acquiring interests (section 7(2)) creates operational controls and potential market segmentation.\n  - Opportunity costs and concentration: The manager’s assumption of unlimited indemnity could concentrate contingent liability in the manager and affect its balance sheet, credit and pricing decisions. Trustees gain reduced regulatory cost; managers incur ongoing capital, audit and indemnity-related costs.\n  - Implementation and enforcement risk: The instrument cross-references several other ASIC instruments and “notional” insertions to the Corporations Act (PF 209, notional subsections of 912AC, notional CO 13/1410), which requires careful regulatory alignment and creates complexity in practice (see sections 4 and 7 and the notes). ASIC retains express power to stop reliance on the exemption by written notice (section 8), so supervisory discretion is significant.\n\n**Practical mechanics a user needs to check before relying on this relief**\n\n- Confirm the scheme is a “wholesale equity scheme” (definitions in section 4).\n- Confirm the trustee is an “eligible trustee” (corporate trustee that does not “control” any issuer of an scheme-held investment product) (section 4).\n- Ensure a related body corporate holds an AFS licence that is drafted to include the licence conditions referred to in section 6(a)(ii).\n- Put in place the deed poll required by section 6(a)(ii)(B) and ensure its enforceability.\n- Ensure trustee compliance with the financial, audit and custodial standards set out in section 7 for the whole period of reliance.\n- Maintain records and reporting to ASIC, and monitor the scheme to prevent retail clients becoming investors (section 7(2) and section 6(b)).\n\n**Key references within the instrument**: definitions (section 4); exemption and covered services (section 5); manager licence and deed-poll conditions and ASIC notification rules (section 6); trustee conditions and financial/audit obligations (section 7); ASIC withdrawal and transition from previous class order (sections 8–9)."},"kimi_summary":{"content_quality":"ok","complexity_score":7,"scope_assessment":{"changed":false,"description":"The instrument maintains its original purpose of providing licensing relief for wholesale equity scheme trustees. The 2023 amendments updated cross-references to reflect new ASIC instruments replacing old class orders, but did not expand the scope beyond the original intent of exempting eligible trustees from AFSL requirements subject to manager oversight and financial conditions."},"complexity_factors":["Multiple nested conditional requirements: exemption availability depends on manager's licence conditions, which themselves have three sub-conditions (6(a)(ii)(A)-(C))","Extensive cross-referencing to external instruments: PF 209, ASIC Corporations (Financial Requirements for Responsible Entities, IDPS Operators and Corporate Directors of Retail CCIVs) Instrument 2023/647, ASIC Corporations (Financial Requirements for Custodial or Depository Service Providers) Instrument 2023/648, ASIC Class Order [CO 13/1410], and ASIC Corporations (Miscellaneous Technical Relief) Instrument 2015/1115","Notional insertion provisions: applies sections of the Corporations Act 'as if' notionally inserted by other instruments, requiring readers to understand hypothetical legislative text","Defined terms with recursive definitions: 'eligible trustee' depends on 'control' (referencing section 50AA of the Act), 'investment product' has 6 sub-paragraphs cross-referencing multiple sections of the Corporations Act","Dual regulatory framework application: trustee must comply with conditions as if it were a licensee, while manager actually holds the licence","Transitional provisions creating overlapping regimes: old class order continues to apply in some cases, with modified effect under different legislative provisions","Financial requirements incorporate by reference to PF 209 (a pro forma document that changes over time), creating moving-target compliance obligations"],"plain_english_summary":"This instrument lets trustees of certain wholesale equity schemes operate without their own Australian financial services licence if a related company holding an AFSL effectively takes responsibility for the trustee’s services and liabilities, and strict financial, audit and investor-only-wholesale safeguards are met. It reduces licensing duplication while keeping investor protections—via deed poll guarantees, inclusion of trustee finances in the manager’s calculations, reporting rules and ASIC oversight."}},"importantCases":[],"_links":{"self":"/api/acts/asic-corporations-wholesale-equity-scheme-trustees-instrument-2017-849","history":"/api/acts/asic-corporations-wholesale-equity-scheme-trustees-instrument-2017-849/history","analysis":"/api/acts/asic-corporations-wholesale-equity-scheme-trustees-instrument-2017-849/analysis","conflicts":"/api/acts/asic-corporations-wholesale-equity-scheme-trustees-instrument-2017-849/conflicts","importantCases":"/api/acts/asic-corporations-wholesale-equity-scheme-trustees-instrument-2017-849/important-cases","documents":"/api/acts/asic-corporations-wholesale-equity-scheme-trustees-instrument-2017-849/documents"}}