ASIC Corporations (Describing Debentures—Secured Notes) Instrument 2022/61

The instrument introduces and relies on a small set of legal and operational concepts. These are defined within the text and by cross-reference to the Corporations Act.

• Controlled modification of s 283BH: The instrument modifies how Chapter 2L applies by adding an entry to the table in subsection (1) of section 283BH so that the description "secured note" is conditioned on the circumstances in s 5(4) (s 5(1)(a)). The addition appears as item 2A in the table (s 5(1)(a)).

• First ranking security interest: A borrower may use "secured note" only if repayment of all moneys deposited or lent under the debentures has been secured by a first ranking security interest in favour of the trustee over the whole or any part of the property of the borrower or any guarantors (s 5(4)(a)). The instrument therefore makes priority of the security interest a precondition for the label.

• Sufficiency and reasonable likelihood test: Beyond taking a first ranking security interest, the borrower must form the view that the security property is sufficient and reasonably likely to remain sufficient to meet repayment liabilities and all other liabilities that rank ahead of, or equally with, the debenture liability (s 5(4)(b)). The instrument places the assessment obligation with the borrower; the phrasing is subjective to the borrower's assessment, but it must be stated in disclosures (s 5(5)(b)(ii)).

• Disclosure and advertisement content requirements: The instrument prescribes statements and information that must accompany any use of the label "secured note" in advertisements or publications tied to offers requiring a disclosure document, in disclosure documents or quarterly reports under s 283BF, and on the borrower’s website (s 5(5)(a)-(c)). Required content includes explicit investor-risk statements, a breakdown of key features of the security interest, an express sufficiency statement, and additional disclosures if secured property values may be affected by related parties (s 5(5)(a)(i)-(b)(iii)).

• Defined terms and cross-references: The instrument defines "advertisement or publication" in relation to offers that need a disclosure document and expressly cross-references the Corporations Act definitions for "related party" (s 5(6)). The advertisement definition covers both traditional advertisements and publications that directly or indirectly refer to the offer or are reasonably likely to induce people to apply (s 5(6)).

• Timing obligations for web disclosures: The instrument requires the borrower to publish on its website specified reports, disclosure documents and continuous disclosure notices within precise timeframes: quarterly reports as soon as practicable after lodgement with ASIC; disclosure documents lodged within the previous 13 months as soon as practicable after lodgement; and continuous disclosure notices lodged under s 675 in the previous 12 months immediately after they are required to be lodged with ASIC (s 5(5)(c)(i)-(iii)).

• Temporary operation: The instrument is temporary, expressly repealed three years after commencement (s 6). It commences the day after registration (s 2).

These concepts form the operative framework: priority security, borrower assessment of sufficiency, prescribed content for various communications, defined reach of "advertisement or publication", website publication timing, and a three-year life.

The instrument identifies and places obligations or conditions on a narrow set of market participants; its effects are distributive rather than universal.

• Borrowers who issue debentures: The primary subject is any borrower that issues debentures and wishes to describe or refer to those debentures as "secured notes". The instrument conditions the right to use that description on the presence of a first ranking security interest and on the borrower meeting the specified disclosure requirements (s 5(4)-(5)). The borrower's assessment about sufficiency of security is central (s 5(4)(b); s 5(5)(b)(ii)).

• Trustees for debenture holders: The instrument requires that repayment be secured by a first ranking security interest in favour of the trustee (s 5(4)(a)). That creates a direct legal relationship in the labelling condition: the trustee must be the beneficiary of the first ranking security interest, and the existence and features of that security interest must be disclosed (s 5(5)(b)(i)-(iii)). Trustees are indirectly affected because the instrument predicates the legitimacy of the "secured note" label on the trustee holding appropriate priority.

• Guarantors and providers of security: Where security is provided over property of guarantors, the first ranking security interest may be over the whole or any part of the property of guarantors (s 5(4)(a)). Those parties are implicated because their property may be the subject of the security interest and because the borrower must disclose the identity of the person providing the security interest and information about the property (s 5(5)(b)(i)(C)-(D)).

• Investors and potential investors: The instrument prescribes investor-directed statements for advertisements and disclosure documents, including that the secured note is not a bank deposit and that investors risk losing some or all of their money (s 5(5)(a)(i)-(ii)). Those are targeted to investors and prospective investors in offers requiring disclosure documents.

• Related parties and related bodies corporate: Where the value of property secured might be affected by the financial position or performance of a related body corporate or related party, the borrower must include an explicit statement to that effect in disclosure documents or quarterly reports (s 5(5)(b)(iii)). The instrument therefore pulls related parties into the disclosure perimeter by requiring explicit caveats where their financial position may affect secured property value. "Related party" is defined by cross-reference to section 228 of the Act (s 5(6)).

• Market communications intermediaries: Entities preparing advertisements, publications, disclosure documents, and quarterly reports are affected by the content rules and timing obligations for website posting (s 5(5)(a)-(c)). Advertising platforms and publishers will be indirectly affected via the advertiser’s obligations, and must be aware that a labelled "secured note" advertisement must also comply with section 734 of the Corporations Act (note following s 5(5)).

• ASIC and registry users: ASIC is the instrument maker; the instrument relies on ASIC’s register and lodgement regimes (s 2; s 5(5)(c)(i)-(iii)). ASIC will be the repository referenced for the timing of website postings (as soon as practicable after lodgement with ASIC).

The distribution of direct obligations falls chiefly on borrowers issuing debentures and on trustees who must hold first ranking security; related parties, guarantors and investors are implicated through disclosure content and the scope of required statements. The instrument does not purport to amend other market participants’ substantive rights beyond disclosure and description limitations.

The instrument creates a set of duties attached to the use of the description "secured note", and it defines the limited right to use that description. Those duties are precise in form and allocate the primary responsibilities to borrowers.

Right to use the description "secured note":

• A borrower may describe or refer to debentures as "secured notes" only where the two-part condition in s 5(4) is satisfied. The new item 2A in the modified table in s 283BH provides that "secured note" can be used only if the circumstances in s 5(4) are satisfied (s 5(1)(a); s 5(4)). This establishes a conditional right: labelling is permitted but limited to the prescribed factual and disclosure environment.

Duties placed on the borrower:

• Security priority duty: The borrower must ensure the repayment of all moneys that have been or may be deposited or lent under the debentures is secured by a first ranking security interest in favour of the trustee over the whole or any part of the property of the borrower or of any guarantors (s 5(4)(a)). That is an affirmative security-creation requirement tied to priority.

• Sufficiency assessment duty: The borrower must ensure that the property constituting the security is "sufficient and is reasonably likely to be sufficient" to meet repayment liabilities and other liabilities that rank ahead of or equally with the debenture liability (s 5(4)(b)). The instrument allocates this assessment duty to the borrower and requires the borrower to state that assessment in disclosure materials (s 5(5)(b)(ii)).

• Disclosure duties for advertisements and publications: Where the borrower uses the label in an advertisement or publication in relation to an offer that needs a disclosure document, the borrower must include two specific statements in the advertisement or publication: that the secured note is not a bank deposit, and that there is a risk that investors could lose some or all of their money (s 5(5)(a)(i)-(ii)). The instrument defines advertisement or publication for these purposes (s 5(6)).

• Disclosure duties in disclosure documents and quarterly reports: When the borrower describes or refers to debentures as secured notes in a disclosure document or quarterly report under s 283BF, it must include detailed information about the security interest: a statement that the security interest is first ranking; the type of security interest; the identity of the person providing the security interest; and information about the property constituting the security (s 5(5)(b)(i)(A)-(D)). The borrower must also include its assessment of sufficiency (s 5(5)(b)(ii)) and, where relevant, a statement that secured property values may be affected by related bodies corporate or related parties (s 5(5)(b)(iii)).

• Website publication duties: If the borrower describes the debentures as secured notes on its website, it must include specified reports, disclosure documents or continuous disclosure notices on the website, within the timeframes set out in s 5(5)(c)(i)-(iii). The required items include the most recent quarterly report prepared under s 283BF, disclosure documents lodged with ASIC in the previous 13 months, and continuous disclosure notices lodged under s 675 in the previous 12 months (s 5(5)(c)).

• Cross-compliance reminder: The instrument includes a note that an advertisement covered by s 5(5)(a) must also comply with section 734 of the Corporations Act, so the borrower must observe that external statutory advertising rules remain applicable (note following s 5(5)).

Duties of other named actors:

• Trustee: Implicitly, the trustee must be the person in whose favour the first ranking security interest is granted (s 5(4)(a)); the trustee will therefore be a party to the security arrangements and to the factual claim about first ranking priority which the borrower makes when labelling.

• Guarantors/providers of security: Where guarantors provide the security, their property may be subject to the security interest (s 5(4)(a)), and their identity and the characteristics of the secured property must be disclosed (s 5(5)(b)(i)(C)-(D)). That imposes an information disclosure duty on the borrower as to these third-party contributors.

Enforceable rights:

• The instrument does not itself create new substantive investor entitlements or statutory remedies in its text, but it makes the use of the label conditional on meeting the duties described. The right to employ the phrase "secured note" in any advertisement, disclosure document, quarterly report or website reference is therefore contingent on satisfying and documenting the security and disclosure duties in s 5(4) and s 5(5).

The instrument places the burden of factual compliance and accompanying disclosure squarely on borrowers, with trustees and guarantors implicated as necessary parties to the security arrangement and as subjects of required disclosures.

The instrument itself does not stipulate specific fines, penalties, or enforcement mechanisms within its text. It operates by modifying the application of Chapter 2L of the Corporations Act so that the ability to describe debentures as "secured notes" is subject to the conditions in the instrument (s 5(1)(a); s 5(4)-(5)). The instrument is made under paragraph 283GA(1)(b) of the Corporations Act (s 3), which is the statutory authority for ASIC to make such declaratory instruments; that authority implies that compliance and enforcement fall within the broader regulatory architecture set by the Act rather than the instrument itself.

Consequences of non‑compliance, insofar as the instrument makes them visible in the text, are primarily descriptive and regulatory: a borrower that does not satisfy the conditions in s 5(4) cannot lawfully rely on the modified application of s 283BH to call the debentures "secured notes" because the instrument makes the application conditional. In practice, that means a borrower that uses the label without meeting the specified security and disclosure conditions would be making a representation inconsistent with the circumstances that s 283BH, as varied by the instrument, requires. The instrument does not specify administrative or monetary penalties for failure to include the prescribed statements, nor does it create an express new civil liability; those matters remain within the enforcement frameworks and powers of the Corporations Act and ASIC as applicable under other provisions of the Act.

The instrument cross-references other statutory disclosure obligations that themselves have compliance and enforcement implications: for example, disclosure documents that “need” a disclosure document and notices lodged under section 675 are part of the Act’s continuous disclosure and prospectus regimes (s 5(5)(a)-(c)). The instrument also draws in section 734 in relation to advertisements (note following s 5(5)), which is part of the Act’s general advertising prohibitions and carries separate penalties or consequences under the Act. Therefore, while the instrument does not specify sanctions, failing to comply with disclosure obligations or contravening section 734 may attract whatever penalties, remedies or enforcement actions the Corporations Act and ASIC’s powers provide elsewhere.

Finally, the instrument is temporary and will be repealed three years after commencement (s 6). That temporal limit affects enforcement in that any ongoing or retrospective compliance assessment will be contextualised by the instrument’s operative period. The text does not describe transitional enforcement arrangements on repeal.

The instrument explicitly operates by modifying the application of provisions within the Corporations Act 2001, and it cross-references several named sections of that Act. All interactions described in the instrument are internal to the Act’s framework.

• Modification of Chapter 2L and section 283BH: The instrument directly alters how Chapter 2L applies by declaring that it applies as if section 283BH were modified to include a new table entry (item 2A) and additional subsections (s 5(1)(a)-(b)). This is an internal modification that affects the interpretation and application of the existing Chapter 2L labelling and disclosure requirements.

• Cross-reference to section 283BF: The instrument makes repeated reference to quarterly reports prepared under section 283BF. Where a borrower uses the label "secured note" in a disclosure document or a quarterly report under s 283BF, the instrument prescribes specific content that must be included (s 5(5)(b)). It also requires those quarterly reports to be posted on the borrower’s website as soon as practicable after lodgement with ASIC (s 5(5)(c)(i)).

• Cross-reference to section 675: The instrument requires borrowers to publish continuous disclosure notices lodged under section 675 in the previous 12 months on their website "immediately after the notice is required to be lodged with ASIC" (s 5(5)(c)(iii)). This integrates the instrument’s website posting obligations with the Act’s continuous disclosure regime.

• Cross-reference to section 734: The instrument contains an express note that advertisements covered by s 5(5)(a) must also comply with section 734 of the Corporations Act (note following s 5(5)). Section 734 is part of the Act’s advertising and prospectus control framework. The note signals that the instrument’s content obligations are in addition to, and not a substitute for, any prohibition or requirement in s 734.

• Cross-reference to section 228 for "related party": The instrument relies on the definition of "related party" as given in section 228 of the Act for the purposes of the requirement to disclose where secured property values may be affected by related bodies corporate or related parties (s 5(5)(b)(iii); s 5(6)). That ties the instrument’s disclosure scope to the Act’s statutory definitions governing related-party relationships.

• Authority under paragraph 283GA(1)(b): The instrument is made under a specific paragraph of the Corporations Act (s 3). That situates the instrument as a regulatory instrument that modifies application of the Act rather than as primary legislation.

• ASIC lodgement and the Federal Register: The commencement provision fixes operation to the day after registration on the Federal Register of Legislation (s 2) and the instrument references lodgement with ASIC as the triggering event for certain timing obligations for website publication (s 5(5)(c)(i)-(iii)). This embeds the instrument in the existing lodgement and registry architecture.

• No express interaction with other statutes: The instrument contains no express references to statutes outside the Corporations Act. It does not, for example, purport to modify property law, security registration regimes, insolvency law, or other Commonwealth or State laws within its text. Any interaction with those subject matters would occur as a practical matter (for instance, creation and perfection of a security interest) but is not addressed by the instrument itself.

In short, the instrument operates as a targeted variation of the Corporations Act’s Chapter 2L disclosure and labelling regime, cross-linking with specific existing sections (283BH, 283BF, 675, 734, 228) and relying on ASIC’s lodgement processes and the Act’s definitional framework.

The text of the instrument records a single, self-contained amendment action: it is a legislative instrument made by a delegate of the Australian Securities and Investments Commission on 23 March 2022 (document heading and signature block). The instrument itself creates no amending schedule to other instruments; rather, it declares that Chapter 2L of the Corporations Act 2001 applies "as if" section 283BH were modified or varied in the stated manner (s 5(1)). That declaration is the operative amendment.

Key points in the instrument’s amendment history as contained in its text:

• Date of making: the instrument shows a date of 23 March 2022 in the signature block. That is the date the delegate executed the instrument as recorded in the document heading.

• Commencement: the instrument does not commence on the date signed; it commences on the day after it is registered on the Federal Register of Legislation (s 2). The instrument points users to the register for access (s 2 note), but the instrument text does not record the registration date itself.

• Temporary nature and repeal: the instrument contains a repeal clause that will repeal the instrument on the day three years after its commencement (s 6). That provides a fixed sunset. The text does not include transitional provisions, saving clauses or extensions; it only provides for automatic repeal at the three-year mark.

• No further amendments recorded: the instrument as provided does not record any prior amending instruments, nor does it include any schedules of amendment beyond the insertions and subsections it prescribes to be treated as variations to s 283BH. The instrument does not itself amend legislative text directly but operates by declaration of how the Act "applies" for the relevant persons.

• Authority for amendment-like effect: the instrument cites its authority as paragraph 283GA(1)(b) of the Corporations Act (s 3). The instrument therefore exercises executive-delegated rulemaking power to vary application of a specified Act provision.

Because this text is the sole source provided, there is no recorded history of subsequent amendments, extensions, or revocations in the instrument itself. Any amendment to the instrument after registration, or any decision to extend or repeal it earlier than the three-year sunset, would need to be made by a further legislative instrument or primary legislation; those actions are not reflected in the supplied text.

The instrument’s text contains no references to litigation, court determinations, tribunal decisions, or any cases. It includes no judicially reported material, no schedules referencing legal determinations, and names no cases. The instrument was made administratively by an ASIC delegate (signature block) and purports to vary application of Chapter 2L by declaration; it does not itself reflect adjudication or a judicial review outcome in its text.

Implications of the absence of litigation references within the instrument:

• No judicial interpretation recorded: Because there are no cases cited in the instrument, the obligations and definitions introduced by this instrument appear untested by courts in the text supplied. Any interpretive uncertainties about terms such as "sufficient" or "reasonably likely to be sufficient", or about the operation of "first ranking security interest" in particular fact scenarios, are not resolved by this instrument’s text.

• Enforcement questions unaddressed in judicial context: The instrument does not report any litigation over non-compliance, misleading labelling, or disputes over whether a particular security was first ranking. Therefore, questions about how courts would treat conflicting claims about the sufficiency assessment, the trustee’s rights, or the effect of imperfect security on the permissibility of the "secured note" label are unresolved in the instrument.

• No recorded precedent for compliance disputes: Because neither the instrument nor an attached explanatory or historical note records litigation, there is no source material in the instrument to guide parties as to precedent-based best practice or case law on how tribunals or courts may approach disputes arising from the instrument’s conditions.

• Potential for future litigation: The instrument creates requirements (for example, the borrower’s sufficiency assessment and the requirement that security be first ranking) that could give rise to factual disputes where outcomes may affect investor reliance on the "secured note" label. Those disputes would need judicial or tribunal resolution outside the instrument if contested.

For practitioners, the key takeaway from the instrument’s litigation silence is that, within the text provided, no judicial gloss or interpretive guidance is supplied; parties must apply the instrument’s language as written and anticipate that contested factual questions (priority of security, sufficiency assessments, timing of website postings) may ultimately require adjudication under the broader Corporations Act framework.

The instrument’s brevity hides a number of practical traps and points that require careful attention. Because the instrument conditions the use of the label "secured note" on factual and disclosure criteria, small lapses can have material consequences.

• The label is conditional, not descriptive: The instrument does not merely describe typical market practice; it makes legal use of the phrase "secured note" contingent on specific facts (s 5(4)). A borrower that informally markets a debenture as a secured note without having established a first ranking security interest in favour of the trustee will be outside the modified application of s 283BH and therefore using the label without satisfying the instrument’s preconditions.

• Priority of security must be first ranking in favour of the trustee: The security interest must be first ranking in favour of the trustee over the whole or any part of the property of the borrower or of any guarantors (s 5(4)(a)). If the security is second-ranking, subject to prior charges, or otherwise subordinated to another party, the borrower cannot meet the conditon and therefore cannot call the instrument a secured note under the instrument. The instrument does not qualify what "first ranking" means in different insolvency or intercreditor settings; practitioners should be cautious.

• Sufficiency assessment is the borrower’s assessment but must be stated: The borrower must be satisfied that the security property is sufficient and reasonably likely to be sufficient to meet repayment and higher or pari passu liabilities (s 5(4)(b)), and that assessment must be included in disclosure documents and quarterly reports (s 5(5)(b)(ii)). That imposes both a factual duty and a disclosure duty. The instrument does not provide a valuation standard or prescribing who must conduct assessments; it places the statement on the borrower.

• Related-party value impacts require explicit disclosure: Where secured property values may be affected by the financial position or performance of a related body corporate or related party of the borrower, the borrower must include an explicit statement to that effect in disclosure documents and quarterly reports (s 5(5)(b)(iii)). The instrument cross-references section 228 for the definition of "related party" (s 5(6)), so careful related‑party analysis is required to identify whether the additional disclosure is triggered.

• Advertising constraints and s 734 compliance: Advertisements that refer to offers requiring a disclosure document must include two explicit investor-facing statements (not a bank deposit; risk of losing some or all money) (s 5(5)(a)(i)-(ii)). Such advertisements must also comply with section 734 of the Corporations Act (note following s 5(5)), so there may be overlapping prohibitions or requirements that further constrain promotional language.

• Website posting timing is strict on certain documents: The instrument requires that the most recent quarterly report prepared under s 283BF be posted on the borrower’s website "as soon as practicable after a copy of the report is required to be lodged with ASIC", that disclosure documents lodged in the previous 13 months be posted "as soon as practicable after a copy of the document is lodged with ASIC", and that continuous disclosure notices under s 675 in the previous 12 months be posted "immediately after the notice is required to be lodged with ASIC" (s 5(5)(c)(i)-(iii)). The differences between "as soon as practicable" and "immediately" create timing sensitivities; failure to observe these timings could mean the borrower fails to meet the instrument’s conditions for website disclosure.

• The instrument is temporary: It will be repealed three years after commencement (s 6). Any documentation or reliance built around the instrument’s regime should account for its sunset; investors and borrowers must consider how disclosure and labelling will be handled on repeal.

• No express treatment of imperfect security or secured property claims: The instrument requires first ranking security and an assessment of sufficiency but does not provide remediation pathways where security is defective, or where security ranking is subsequently compromised. That raises questions about whether and how a borrower can cure a defect while continuing to describe debentures as secured notes.

• Reliance on lodgement with ASIC for timing triggers: Several timing obligations are tied to lodgement with ASIC (s 5(5)(c)), so procedural missteps or delays in lodgement can complicate compliance. Borrowers must coordinate ASIC lodgement timing with website publication.

• Scope of "advertisement or publication": The definition is broad, including publications that directly or indirectly refer to the offer or are reasonably likely to induce applications (s 5(6)). That breadth captures a wide range of marketing activity; issuers must review marketing materials for indirect references.

These are not hypothetical risks in the instrument; they are concrete operational implications of the instrument’s precise wording. Practitioners must manage both the factual (security creation, priority, valuation) and the disclosure process (timing, content, cross-references to other Act sections).

Compliance requires both (A) establishing the qualifying security architecture and (B) maintaining the prescribed disclosure and publication practices while the borrower uses the label "secured note". The instrument places the operational burden primarily on the borrower, with trustees, guarantors and advisers playing enabling roles.

A. Security and factual prerequisites (s 5(4))

1. Create a first ranking security interest in favour of the trustee: Ensure documentation and any registration steps are taken so that the trustee is legal holder of a first ranking security interest over the property intended to secure repayment (s 5(4)(a)). This includes any perfection steps required under property or security registration regimes, noting that the instrument conditions the label on first ranking priority in favour of the trustee.

2. Identify the scope of secured property: Determine whether the security covers the whole or part of the borrower’s property and any guarantors’ property, and document the identity of each person providing the security interest (s 5(4)(a); s 5(5)(b)(i)(C)-(D)).

3. Conduct and document a sufficiency assessment: The borrower must be able to state, in its disclosure materials, that it assesses the secured property as sufficient and reasonably likely to be sufficient to meet the repayment liability and other liabilities that rank ahead of or equally with it (s 5(4)(b); s 5(5)(b)(ii)). This requires a current valuation approach, a record of valuation methodologies and assumptions, and a governance trail showing who made the assessment and on what basis.

4. Consider related-party implications: Analyse whether secured property values might be affected by the financial position or performance of related bodies corporate or related parties (as defined in s 228). If such effects are reasonably possible, prepare the required statement for disclosure documents and quarterly reports (s 5(5)(b)(iii); s 5(6)).

B. Disclosure and publication obligations (s 5(5))

1. Advertising and publications tied to offers requiring disclosure documents:

   • Include explicit statements in any advertisement or publication that directly or indirectly refers to the offer or is likely to induce applications: that the secured note is not a bank deposit; and that investors could lose some or all of their money (s 5(5)(a)(i)-(ii)). Review all promotional material, including social media and indirect promotional placements, against the broad definition of "advertisement or publication" in s 5(6).
   • Ensure all such advertisements also comply with section 734 of the Corporations Act (note following s 5(5)).

2. Disclosure documents and quarterly reports:

   • In disclosure documents and quarterly reports required by s 283BF, include the key features of the security interest: statement that it is first ranking; the type of security interest; the identity of the security provider; information about the secured property; and the borrower’s sufficiency assessment (s 5(5)(b)(i)-(ii)).
   • Where relevant, include the related-party caveat regarding effects on secured property value (s 5(5)(b)(iii)).

3. Website postings and timing:

   • Post the most recent quarterly report under s 283BF on the borrower’s website as soon as practicable after the report is required to be lodged with ASIC (s 5(5)(c)(i)).
   • Post any disclosure documents lodged with ASIC in the previous 13 months on the borrower’s website as soon as practicable after lodgement (s 5(5)(c)(ii)).
   • Post continuous disclosure notices lodged under s 675 in the previous 12 months immediately after the notice is required to be lodged with ASIC (s 5(5)(c)(iii)).
   • Establish internal procedures that link ASIC lodgement actions to website publishing workflows so that "as soon as practicable" and "immediately" standards are met in practice.

C. Governance, recordkeeping and advisor coordination

1. Trustee coordination: Ensure the trustee is party to the security documents, understands the requirement that the security be first ranking in their favour, and is content with the disclosure package the borrower will cite (s 5(4)(a); s 5(5)(b)(i)(C)).

2. Valuation and adviser involvement: Use qualified valuers and financial advisers to underpin the sufficiency assessment. Keep records showing valuation dates, methodologies and assumptions that support the borrower’s statement in disclosure materials (s 5(5)(b)(ii)).

3. Legal review of marketing materials: Because the definition of advertisement or publication is broad (s 5(6)), conduct legal review of all marketing collateral, website content, and third-party promotions to ensure required statements are present and that wording complies with section 734 as applicable.

4. Document templates and disclosure checklists: Prepare standardised disclosure text blocks that satisfy the instrument’s content requirements for advertisements, disclosure documents and quarterly reports. Maintain a checklist to confirm that the identity of providers of security, type of security and property information are included whenever the label "secured note" is used (s 5(5)(b)(i)).

5. Monitor related-party developments: Maintain a register of related parties under s 228 and monitor financial developments in related bodies corporate or parties that might affect the value of secured property, so that the borrower can update disclosure if the related-party caveat becomes applicable (s 5(5)(b)(iii); s 5(6)).

D. Lifecycle and sunset planning

1. Track the instrument’s life: The instrument is repealed three years after commencement (s 6). Plan for disclosure and marketing approaches beyond the sunsetting of the instrument, including internal decisions on whether to continue using the label "secured note" under whatever regulatory environment applies after repeal.

2. Transitional communications: If the security position or the borrower’s assessment changes (for instance, security ranking is disrupted or secured property values decline), update disclosure documents, website materials and continuous disclosure notices promptly to ensure ongoing statements remain accurate and consistent with the instrument’s conditions (s 5(4)-(5)).

E. Audit trail and compliance evidence

1. Retain lodgement and publication evidence: Keep records of ASIC lodgement times and website publication timestamps to evidence compliance with the "as soon as practicable" and "immediately" requirements (s 5(5)(c)(i)-(iii)).

2. Internal approvals: Ensure board or delegated approvals for the sufficiency assessment and for the use of the label "secured note" are recorded. The instrument places the assessment duty on the borrower; organisational governance must reflect that.

Following these steps will align operational practice with the instrument’s requirements. The instrument centralises the compliance responsibility with the borrower: legal, valuation and communications functions must be coordinated to meet both the security-test and the prescriptive disclosure rules in s 5(4)-(5).