ASIC Corporations (Nominee and Custody Services) Instrument 2016/1156

The instrument defines a tight set of substantive concepts that determine scope and obligations. Many of these appear in notional s 912AH(10) and s 4 of the instrument. Key definitions are "nominee and custody service", "operator", "custodian", "accessible securities" and "accessible financial product".

• Nominee and custody service. The instrument sets a functional test: a custody and settlement service that includes a custodial or depository service and in which clients have the "sole discretion to decide what (but not necessarily when) financial products will be acquired or disposed of" (see s 4 and notional s 912AH(10)). There are two carve-outs within the definition: it excludes arrangements where there are prior written directions that the client has agreed not to vary, and it excludes where the client has authorised the operator or another to give directions for the purpose of receiving or securing payment of moneys owing (s 4; notional s 912AH(10)). The definition expressly excludes IDPSs and IDPS-like schemes (s 4 and notional s 912AH(10)); IDPS and IDPS-like meanings are aligned with separate ASIC instruments (see the definitions referencing ASIC Corporations (Investor Directed Portfolio Services) Instrument 2023/669 and the IDPS-like instrument 2023/668).

• Operator and custodian. "Operator" is a body corporate holding an AFSL authorising it to provide a custodial or depository service who contracts with clients for the provision of the nominee and custody service or a function of it (s 4; notional s 912AH(10)). "Custodian" is a person who provides a custodial or depository service in connection with a nominee and custody service (s 4; notional s 912AH(10)). The instrument notes a custodian may also be the operator.

• Accessible securities and accessible financial product. These terms identify the assets that may be held through a nominee and custody service and trigger the instrument’s special rules (s 4; notional s 912AH(10)). "Accessible financial product" is explicitly limited to financial products other than securities.

• Defective disclosure or PDS. The notional s 912AH(10) imports "defective" for disclosure documents and PDSs by reference to the Act: defective PDS has the meaning in s 1021B, defective CSF offer document as in s 738U, and for disclosure documents the instrument defines defective in terms of being a document in relation to which the offering person "must not issue securities" or must deal with existing applications under s 724(2) (notional s 912AH(10)(b)).

The instrument also creates procedural concepts:

• Reasonable belief. Several compliance gateways are framed as the licensee reasonably believing certain facts, for example that the client has been given a disclosure document at the time of acquisition (notional ss 912AH(3)(b), 4(5)(a)). The instrument does not prescribe evidence thresholds, but requires subjective reasonable belief as the standard.

• Notifications to operator or custodian. A person who makes an offer of accessible securities through a nominee and custody service must promptly notify the operator or custodian in particular events (notional s 704C(1)), such as when a supplementary or replacement document is lodged, the person is prohibited under Division 1 of Part 6D.3 from continuing offers, or the disclosure document is withdrawn before its expiry date.

• ASIC notice power. The exemptions in ss 5 and 6 and the notional provisions are qualified by ASIC’s ability to give written notice that a person cannot rely on the exemptions (ss 5(2), 6(2), notional s 704C(3)). That mechanism operationalises targeted supervision.

Collectively these concepts shape who can rely on disclosure and PDS exemptions, the process for client-directed acquisitions, and the evidentiary and operational controls AFSL holders must have in place when providing nominee and custody services.

The instrument allocates duties and permissions across several groups. The text identifies them concretely.

• Operators of nominee and custody services. Defined labelling applies to AFSL-holding bodies corporate that contract with clients to provide custodial or depository services forming a nominee and custody service (s 4; notional s 912AH(1)). Operators are the principal regulated entities subject to the notional s 912AH obligations, and are the primary addressees of the exemptions in s 5. The operator is the party who must ensure compliance with acquisition restrictions, PDS/disclosure checks, dispute‑resolution facilitation, and CL controls when acquiring accessible securities or financial products under client directions (notional s 912AH(2)-(9)).

• Custodians. A custodian is a person providing custodial or depository services in connection with a nominee and custody service (s 4; notional s 912AH(10)). A custodian may also be the operator. Notional s 1012IA(10) relieves both operators and custodians from having to give a PDS in certain regulated acquisitions provided conditions in notional s 912AH(5)-(7) are met.

• People involved in operation or promotion. Section 6 extends the s 5 exemptions to "a person (other than an operator) who is involved in the operation or promotion of a nominee and custody service". That is a broad class, covering intermediaries or promoters of the service, subject to ASIC’s power to remove the exemption by written notice (s 6(2)).

• Issuers and offerors of accessible securities. Persons who make offers of accessible securities through a nominee and custody service are brought into the modified disclosure regime by notional s 704C, which imposes a notification duty to the operator or custodian of certain events relating to disclosure documents (notional s 704C(1)). Notional s 704C(2) also relieves the offeror from needing to include information about the nominee and custody service or differing rights in the disclosure document, subject to ASIC notice power (notional s 704C(3)).

• Clients of nominee and custody services. Clients are indirectly affected because the instrument conditions when operators may acquire assets on their behalf and what disclosure they must be given. The definition of nominee and custody service is client-centric because it requires that "clients of the service have the sole discretion to decide what" products to acquire or dispose of (s 4; notional s 912AH(10)). Several protections attach to retail clients: for CSF offers, detailed conditions are imposed on the licensee’s reasonable belief that the client has access to the offer document and other CSF-specific safeguards (notional s 912AH(3A)); for other accessible financial products, PDS availability, repeat-holders rules, and dispute‑resolution access are required (notional ss 912AH(4)-(9)).

• Issuers of accessible financial products. Where a licensee intends to rely on notional ss 912AH(6) or (8) to acquire accessible financial products under client directions, the licensee must consider whether the issuer has a dispute resolution system satisfying subsection 912A(2) or 1017G(2) and whether that system covers complaints by retail clients who hold the product through the nominee and custody service (notional s 912AH(8)).

• ASIC. The regulator retains supervisory and notice powers. ASIC can withdraw the exemptions or the instrument’s relief from disclosure/PDS for specific operators, other persons, or offerors by written notice (ss 5(2), 6(2), notional s 704C(3)).

In short, the instrument primarily affects AFSL licensees operating nominee and custody services, their custodians and intermediaries, issuers making offers into those arrangements, and the clients whose investments are held through the service. The obligations and reliefs allocate procedural responsibilities to operators and custodians and place conditional duties on issuers and offerors who use nominee and custody platforms.

The instrument embeds a set of affirmative and limiting duties for licensees, offerors and custodians; and limited rights of exemption and relief. The following summarises the principal rules and where they appear.

Duties on offerors using nominee and custody services

• Prompt notification duty. A person who makes an offer of accessible securities through a nominee and custody service must promptly notify the operator or custodian if a supplementary or replacement disclosure document is lodged, the person is prohibited under Division 1 of Part 6D.3 from making offers, or the disclosure document is withdrawn before expiry (notional s 704C(1)).

• Exemption from describing nominee arrangements in disclosure. The offeror need not include information about the nominee and custody service or differing rights of accessible securities in a disclosure document (notional s 704C(2)), subject to ASIC removing that relief by written notice (notional s 704C(3)).

Duties on licensees operating nominee and custody services (notional s 912AH)

• Prohibition on acquiring interests in certain unregistered schemes. The licensee must not, and must ensure any custodian acting on its behalf does not, acquire accessible financial products that are interests in a managed investment scheme that is not registered, or in a scheme that would be a managed investment scheme but for paragraph (e) of the definition in s 9, unless the licensee reasonably believes that (c) had the client invested directly the scheme would not have been required to be registered, and (d) had all custodial interests been held by the clients the scheme would not have been required to be registered (notional s 912AH(2)). This requires licensees to assess registration thresholds of schemes in both direct and aggregated custodial scenarios.

• Preconditions for acquiring accessible securities under client direction. The licensee must not acquire accessible securities for a client under a client direction unless conditions in notional s 912AH(3) are satisfied. For CSF offers special conditions in notional s 912AH(3A) apply, including that the client has accessed the CSF intermediary’s platform and the CSF offer document, completed the acknowledgement required under paragraph 738ZA(3)(b), had the ability to use the relevant communication facility, could withdraw the direction within 5 business days, and has not been provided financial assistance in relation to the CSF offer from certain parties, among others (notional s 912AH(3A)).

• Preconditions for acquiring accessible financial products under client direction. For accessible financial products other than securities, the licensee must satisfy one of three alternatives: (a) the client has been given the PDS that would have been required had the product been offered directly and the licensee reasonably believes it is not defective (notional s 912AH(5)); (b) the licensee reasonably believes the product could lawfully have been offered without a PDS (other than because of s 1012E) and has no reason to believe a PDS would have been required had custodial holdings been issued directly to clients (notional s 912AH(6)); or (c) the client already holds a product of the same kind and the licensee has given the client a PDS for that product, reasonably believes the client has access to it and it is current and not defective (notional s 912AH(7)). For acquisitions after 31 December 2017 an additional condition applies requiring that the licensee reasonably believes the issuer or seller has an appropriate dispute resolution system covering retail clients who hold through the nominee and custody service (notional s 912AH(8)).

• Facilitate dispute resolution. If a client notifies the licensee of a complaint about an accessible investment, the licensee must take reasonable steps to facilitate resolution between the client and the issuer, including informing the client whether the issuer has a dispute resolution system available to them (notional s 912AH(9)). This creates an operational duty to assist in connecting clients to issuer dispute mechanisms and to engage in facilitation activity.

PDS and disclosure relief

• Exemptions from giving PDSs. Notional s 1012IA(10), inserted by the instrument and reflected in s 9 of the instrument, provides that an operator or custodian does not need to give a client a PDS for a regulated acquisition that complies with the notional s 912AH(5), (6) or (7). The instrument therefore creates relief from PDS delivery when the operator satisfies the notional s 912AH preconditions.

ASIC oversight and revocation of reliance

• ASIC notice power. Sections 5(2), 6(2) and notional s 704C(3) allow ASIC to issue written notices that certain parties cannot rely on the exemptions or on the relief not to include nominee-specific information in disclosure documents. This is the mechanism the instrument uses to remove relief for entities not meeting ASIC’s public policy or compliance expectations.

Rights and limits

• Operators and other persons have a right to rely on the specified exemptions in ss 5 and 6, but that reliance is conditional and revocable by ASIC (ss 5(1), 6(1), 5(2), 6(2)).

• Offerors have a right to omit nominee and custody-service specific rights from disclosure documents under notional s 704C(2), unless ASIC gives notice to the contrary (notional s 704C(3)).

• Licensees have a procedural right to rely on a "reasonable belief" about disclosure and PDS availability to permit acquisitions under client directions (notional ss 912AH(3)-(7)). The instrument does not prescribe evidentiary standards beyond "reasonable belief".

Collectively the duties and rights allocate operational responsibilities to licence holders and provide limited reliefs from standard disclosure rules, while preserving ASIC oversight and imposing tailored consumer-protective conditions.

The instrument itself is an instrument under the Act made pursuant to ss 741(1), 992B(1) and 1020F(1) (s 3) and operates by modifying how existing provisions of the Corporations Act apply to nominee and custody services. It does not itself create new civil penalties or criminal offences in its text, but it operates by altering the application of parts of the Act that carry their own enforcement regimes. The enforcement architecture therefore is the Act’s enforcement machinery applied to the modified obligations. The instrument embeds a few enforcement-relevant mechanisms:

• ASIC notice power. ASIC can issue written notices that prevent an operator, custodian, offeror or other person from relying on the instrument’s exemptions or modified application of the Act (ss 5(2), 6(2), notional s 704C(3)). ASIC’s notice effectively removes the relief and restores full application of the Act’s original duties and potential liabilities to the notified party.

• Application of existing Act enforcement. Because the instrument modifies the application of Part 6D, Part 7.6 and Part 7.9 rather than creating standalone penal provisions, compliance failures or breaches will be pursued under the corresponding sections of the Act as modified by the instrument. For example, failure to comply with notional s 912AH obligations may expose the licensee to contraventions of provisions in Part 7.6, including those that deal with conduct and licence conditions, and to any civil or criminal consequences in the Act for breaches of those provisions when applied substantively. Similarly, not providing required disclosure or giving a defective disclosure document triggers the Act’s civil liability and remedy frameworks in Chapter 6D as they apply.

• Interaction with disclosure "defective" concept. The notional s 912AH(10) imports the Act’s "defective" definitions (including s 1021B for PDSs and s 738U for CSF documents). Where a disclosure document or PDS is "defective" in the Act’s terms, offering persons or licensees relying on the instrument’s reliefs may be exposed to statutory remedies and application-processing obligations that the Act prescribes for defective offers or documents.

• Administrative and licensing consequences. Because the instrument applies to AFSL holders providing nominee and custody services (notional s 912AH(1)), breaches of the notional requirements could attract licensing action by ASIC under Part 7.6, including conditions, suspensions or cancellations of the AFSL, to the extent those powers are exercised under the Act.

The instrument does not itself specify penalties, monetary fines, or criminal offences. Enforcement therefore must be understood as enforcement of the Act’s existing penalty and remedy framework as applied through the instrument’s modifications. Practitioners should therefore map any suspected contravention to the underlying Act provision (for example Part 6D disclosure obligations, Part 7.9 PDS obligations, or s 912A/912B licensing obligations) to determine the specific enforcement consequences.

This instrument is an amendment-by-reference instrument. It operates by modifying the operation and application of multiple Parts of the Corporations Act 2001 and by cross-referencing other ASIC instruments. The primary interactions are:

• Chapter 6D (Disclosure for offers of securities). The instrument inserts notional s 704C into Chapter 6D to adjust disclosure requirements for offers of accessible securities made through nominee and custody services (Part 3, s 7). Notional s 704C(2) relieves offerors from having to include nominee-specific information in disclosure documents. The exemption from Part 6D.2 and 6D.3 in ss 5 and 6 is therefore limited and operates against the backdrop of the broader Chapter 6D disclosure regime.

• Part 7.6 (Financial services licensing). The instrument inserts notional s 912AH into Part 7.6 (s 8 of the instrument), making Part 7.6 (other than Divisions 4 and 8) apply to licensees as if modified. The notional provisions sit within the licensing and conduct framework of Part 7.6, which contains licence conditions, conduct obligations and ASIC’s supervisory powers. The instrument therefore creates duties that are enforced within the licence framework.

• Part 7.9 (Product Disclosure Statements). The instrument amends the application of Part 7.9 by inserting notional s 1012IA(10) after subsection 1012IA(9) (s 9 of the instrument). That notional subsection provides that an operator or custodian does not need to give a client a PDS for a regulated acquisition where the acquisition complies with notional ss 912AH(5)-(7). This modifies the PDS regime for the specific context of nominee and custody services, while leaving Part 7.9 otherwise in force.

• Chapter 7 miscellaneous references. The notional s 912AH(10) imports definitions and references from other parts of the Act, including the meaning of "custodial or depository service" as given in s 766E, "defective" as used in s 1021B, and CSF-specific terms referenced to ss 738ZA and 738U. The instrument thus interacts with crowd-sourced funding provisions where CSF offers are involved and with other definitional provisions in the Act.

• IDPS and IDPS-like instruments. The instrument expressly excludes IDPSs and IDPS-like schemes from the definition of "nominee and custody service" and references ASIC Corporations (Investor Directed Portfolio Services) Instrument 2023/669 and the IDPS-like scheme instrument 2023/668 to define those terms (s 4; notional s 912AH(10)). This preserves the separate regulatory treatment of IDPSs and IDPS-like schemes under their own instruments and the Act.

• ASIC rulemaking and supervisory powers. The instrument is made under ss 741(1), 992B(1) and 1020F(1) of the Act (s 3). Those sections are the statutory mechanisms permitting ASIC to instrumentally modify the operation of Chapters 6D, 7.6 and 7.9 for nominee and custody services. ASIC’s ongoing supervisory functions under the Act (including notices that withdraw reliance on exemptions) interact with the instrument’s conditional relief model.

In effect the instrument is a targeted calibration of disclosure and PDS obligations within the existing Corporations Act framework, not a standalone regime. Any compliance assessment therefore must be performed with reference to the Act as modified by the instrument, and to the separate ASIC instruments that define IDPS and IDPS-like schemes.

The instrument’s Endnotes provide a concise amendment history and dates of registration and commencement. Key points directly from the instrument are:

• Original instrument: ASIC Corporations (Nominee and Custody Services) Instrument 2016/1156 registered on 14 December 2016 and commenced on 15 December 2016 (Endnote 1).

• Subsequent amending instruments and commencement dates listed in Endnote 1 include:

  • 2017/821, registered 20 September 2017, commenced 28 September 2017.
  • 2017/1119, registered 21 December 2017, commenced 22 December 2017.
  • 2021/799, registered 22 September 2021, commenced 5 October 2021.
  • 2023/670, registered 31 August 2023, commenced 1 September 2023.

• The Endnote 2 amendment table itemises substantive textual changes over time. Notable items from Endnote 2 include:

  • Section 2 was repealed in accordance with s 48D of the Legislation Act (ad. = added/inserted or am. = amended indicators are used in the table).
  • Definitions of IDPS and IDPS-like scheme in section 4 were amended by instrument 2023/670.
  • Paragraphs 5(1)(a) and 6(1)(a) were amended by 2021/799.
  • Notional s 704C(4) (the notional subsection referenced in the instrument) was amended by 2017/1119.
  • Insertions and amendments to the notional s 912AH (previously noted as 912AE or 912AE(3A) in the history) were made across 2017/821 and 2017/1119.
  • Section 9, introducing the notional subsection to 1012IA, was amended by 2017/1119.

• The Endnotes use abbreviations and flags consistent with legislative amendment tables: "ad." indicates added or inserted, "am." amended, "rep." repealed. For definitive text changes, practitioners should consult the formal consolidated instrument and the specific amending instruments cited in Endnote 1.

The instrument therefore has been adjusted several times since 2016 to refine its notional provisions, definitions (notably IDPS related), and to insert CSF-related conditions and dispute-resolution requirements. Each amendment took effect on the commencement date stated for the amending instrument; the compilation here is current as of 1 September 2023.

The instrument’s text and endnotes do not cite or record any court decisions or tribunal determinations applying the instrument. The instrument itself is an administrative instrument made under the Act and its Endnotes list only legislative amendment history and registration data. It does not include judicial or administrative decisions.

Because the instrument operates by modifying the application of provisions of the Corporations Act that are frequently litigated (for example Chapter 6D disclosure matters, PDS obligations in Part 7.9, licensing and conduct matters in Part 7.6), litigation involving the instrument will be recorded in case law that interprets those underlying Act provisions as applied to nominee and custody services. That case law is not reproduced in this instrument compilation. Practitioners seeking litigation history should search judicial and tribunal databases for decisions referencing the instrument number (2016/1156) or the notional sections (704C, 912AH, 1012IA(10)) and for cases involving nominee or custody arrangements where the instrument’s provisions have been relied upon or challenged.

In short, there are no cases named or summarised in the instrument. Any application or dispute that turns on the instrument’s interpretation will be reported outside the instrument in courts’ records and needs to be located through standard legal research channels.

The instrument contains several traps for the unwary because it provides conditional reliefs that depend on factual assessments, procedural steps and ASIC oversight. The following are concrete caution points that follow directly from the instrument’s text.

• Reliance is revocable by ASIC. Sections 5(2), 6(2) and notional s 704C(3) mean ASIC can issue a written notice that a person cannot rely on the exemptions or modified disclosure relief. Once ASIC issues such a notice and does not withdraw it, the relevant person cannot rely on the exemptions. The instrument does not specify a statutory appeal process within its text, so entities must engage with ASIC notices promptly.

• Exemptions do not alter the rights of holdings themselves. The notes to ss 5(1) and 6(1) state the exemptions do not apply to the accessible securities or accessible financial products that are held through the nominee and custody service. That means the substantive legal rights of holders of the underlying securities or financial products are governed by the underlying instruments and the Act; the exemptions relate only to the offering and disclosure obligations.

• "Reasonable belief" is the gate. Many operative permissions for acquiring assets under client direction rely on the licensee's "reasonable belief" that the client has been given the disclosure document or PDS and that the document is not defective (notional ss 912AH(3)(b), 4(5)(a), 6(6)(a), 7(7)). The instrument does not prescribe objective documentary standards. A future enforcement or civil claim will interrogate whether the licensee's belief was objectively reasonable based on evidence, so absent robust documentary proof a licensee's belief may be vulnerable.

• CSF-specific conditions are prescriptive. For crowd-sourced funding offers, notional s 912AH(3A) lists discrete factual conditions: client accessed the CSF intermediary’s platform and the CSF offer document; completed the acknowledgement per paragraph 738ZA(3)(b); could use the communication facility per s 738ZA(5); could withdraw direction within 5 business days; no disallowed financial assistance; and aggregate cap checks. Failure to meet any of these makes reliance on s 912AH(3A) unavailable, so operators must build platform controls and record keeping that demonstrate these conditions were in fact met.

• Aggregation and registration assessment. Notional s 912AH(2)(c)-(d) requires licensees to reasonably believe about scheme registration status both on a client-by-client direct-investor basis and on an aggregated custodial-holdings basis. Determining whether a scheme "would have been required to have been registered" often involves counting members and understanding subtleties of the managed investment scheme definition. The instrument requires assessing both hypothetical scenarios and aggregated custodial holdings, which creates a two-stage compliance test.

• PDS relief is limited and conditional. The notional s 1012IA(10) relief from giving a PDS only applies if the licensed operator or custodian complies with notional s 912AH(5), (6) or (7). Those subsections contain multiple sub-conditions, including the "no reason to believe defective" standard, existence of appropriate dispute resolution systems (for acquisitions after 31 Dec 2017), and for repeat holdings the need to ensure the client has access to a current PDS that is not materially adverse. Operators relying on PDS relief must maintain evidence that these precise conditions were met.

• Dispute-resolution facilitation is affirmative. Notional s 912AH(9) obliges the licensee to take reasonable steps to facilitate resolution and to inform clients whether the issuer has a dispute-resolution system available. This is an operational duty with compliance implications where the operator is an intermediary without control over the issuer’s dispute system.

• Definition technicalities. The nominee and custody service definition excludes IDPSs and IDPS-like schemes. Mis-classifying an arrangement as a nominee and custody service when it is an IDPS will result in incorrect reliance on the instrument. The instrument references separate ASIC instruments for the IDPS and IDPS-like definitions (2023/669 and 2023/668); operators must check those instruments to determine classification.

• Timing and contemporaneous evidence. Several subsections require that the licensee reasonably believes the client has been given the disclosure document "at the time of the acquisition" (notional ss 912AH(3)(b), 5(a)). This emphasises contemporaneous evidence of delivery or access (for example platform access logs), not post-hoc confirmations.

• No standalone safe-harbour mechanics. The instrument uses "reasonable belief" and process tests rather than a checklist that guarantees immunity. This means there is no absolute safe harbour; rather compliance depends on the reasonableness of the licensee’s systems and the evidence they maintain. The instrument leaves enforcement outcomes to the Act's regimes.

These are not conceptual pitfalls but concrete implementation and evidentiary requirements. Operators, custodians and intermediaries should map business processes to these specific subsections rather than relying on a broad-brush understanding of the instrument.

Compliance requires operationalising the instrument’s conditional relief and evidentiary standards into policies, systems and records. Below is a practical, source-grounded compliance checklist derived from the instrument’s notional provisions and operative sections.

1. Confirm classification of the arrangement

   • Verify the arrangement meets the instrument’s definition of "nominee and custody service" in s 4 and notional s 912AH(10): clients must have sole discretion to decide what products are acquired or disposed of (subject to the two narrow exemptions in the definition). Ensure the arrangement is not an IDPS or IDPS-like scheme (see s 4 and the referenced ASIC instruments 2023/669 and 2023/668). Misclassification undermines reliance on the instrument.

2. AFSL authorisation and contracting

   • Ensure the operator is a body corporate with an AFSL authorising custodial or depository services and that contractual arrangements with clients reflect roles as operator and custodian (s 4; notional s 912AH(1)). Contractual clarity will support the "ensure that any custodian acting on its behalf does not" obligations (notional ss 912AH(2)-(4)).

3. Document and evidence "reasonable belief"

   • For acquisitions under client directions, maintain contemporaneous records evidencing the basis for the licensee’s "reasonable belief" that the client has been given the required disclosure document or PDS, and that the document is not defective (notional ss 912AH(3)(b), 5(a), 6(a), 7(a)). Evidence can include platform access logs, timestamped delivery receipts, copies of acknowledgement forms, and system records that show the client was presented with the document at or prior to acquisition time.

4. CSF platform controls

   • Where CSF offers are involved, implement platform controls to record:
     • Client access to the CSF offer document on the intermediary’s platform.
     • Completion of the acknowledgement required by paragraph 738ZA(3)(b).
     • Availability and use of the communication facility required by s 738ZA(5).
     • The client's ability to withdraw within 5 business days.
     • Checks that no disallowed financial assistance was provided by the licensee or listed third parties.
     • Aggregation checks for the CSF investment cap under paragraph 738ZC(1)(b).
   • These controls are necessary to establish compliance with notional s 912AH(3A).

5. PDS management for accessible financial products

   • For acquisitions under notional s 912AH(5)-(7) allow operators to rely on PDS relief only when:
     • The client has been given the relevant PDS and the licensee has no reason to believe it is defective (notional s 912AH(5)).
     • Or the licensee forms a reasonable belief that a PDS is not required for legal reasons and that custodial aggregation would not have required a PDS (notional s 912AH(6)).
     • Or for repeat holdings the operator has supplied a PDS for the same kind of product and the client has access to it and it is current and not defective (notional s 912AH(7)).
   • Keep version-controlled PDS files and client access logs. For acquisitions after 31 December 2017, ensure the issuer’s dispute-resolution system meets subsection 912A(2) or 1017G(2) and covers affected retail clients (notional s 912AH(8)).

6. Dispute resolution facilitation

   • Adopt internal procedures to respond if a client notifies a complaint about an accessible investment. The operator must take "reasonable steps to facilitate resolution between the client and the issuer" and inform the client whether the issuer has a dispute-resolution system available (notional s 912AH(9)). Procedures should include:
     • A client complaint intake process that identifies if the complaint concerns an accessible investment held through the nominee and custody service.
     • A protocol for contacting the issuer and confirming the issuer’s dispute-resolution mechanisms.
     • Communications templates that inform clients about the issuer’s dispute-resolution availability and next steps.

7. Assess scheme registration risk

   • For acquisitions that might involve interests in managed investment schemes that are not registered, develop an analysis template mandated by notional s 912AH(2) to document why the licensee reasonably believes the scheme would not have required registration if the client had invested directly, and why aggregated custodial holdings by clients would not have required registration. This may involve counting members and applying the managed investment scheme tests per s 9 of the Act. Keep contemporaneous written assessments.

8. Notification flows for offerors

   • Operators and custodians must be set up to receive and act upon prompt notifications from offerors per notional s 704C(1) about supplementary or replacement disclosure documents, prohibition under Division 1 of Part 6D.3, or early withdrawal of disclosure documents. Establish an escalation path and recordkeeping for such notifications.

9. Monitor ASIC notices

   • Given ASIC’s power to withdraw reliance (ss 5(2), 6(2), notional s 704C(3)), implement an ASIC-notice monitoring and legal review process. If ASIC issues a notice that a party cannot rely on the exemptions, ensure rapid operational changes to treat future offers and acquisitions as if no relief applied.

10. Record retention and audit trails

    • While the instrument does not set retention periods, the compliance model depends on demonstrable evidence of reasonable belief and process controls. Adopt conservative record-retention policies for:
      • Client confirmations of disclosure access and acknowledgements.
      • Platform logs showing document access times.
      • Copies of disclosure documents and PDSs in force at acquisition times.
      • CSF-specific acknowledgements and withdrawal records.
      • Aggregation and scheme-registration assessments.
    • These records will be central to demonstrating compliance in regulatory reviews or litigation.

11. Training and policy documents

    • Prepare written compliance policies mapped to notional s 912AH obligations and train operations, custody, onboarding, and compliance teams on:
      • What constitutes an "accessible security" or "accessible financial product".
      • How to evidence "reasonable belief".
      • CSF operational controls.
      • Dispute-resolution facilitation steps.

12. Contractual adjustments with custodians and issuers

    • Where custodians act on behalf of operators, contracts should allocate responsibilities so the operator can "ensure that any custodian acting on its behalf does not" contravene the prohibitions in notional s 912AH(2)-(4). Contracts should include cooperation clauses for dispute handling and documentation sharing on disclosure access.

Following these source-tethered steps aligns operations with the instrument’s conditional relief model and places the operator in a defensible position as to the standard the instrument requires: reasonable belief supported by contemporaneous documentary evidence, affirmative facilitation duties, and ready responsiveness to ASIC notices.