ASIC Corporations (Relief to Facilitate Admission of Exchange Traded Funds) Instrument 2024/147

The instrument centres on a set of interlocking concepts: ETF (as specially defined), authorised participant, acquisition and withdrawal facility, indicative net asset value per security, minimum parcel, and withdrawal fee per security. These concepts are defined in clause 4 and the insertions into section 609 introduced by clause 8 and into Chapter 6C by clause 9.

ETF is defined narrowly in clause 4: an ETF is a registered scheme or CCIV sub-fund in which interests or shares are in a class that can be traded on ASX or Cboe but the scheme or sub-fund is not listed on those markets (cl 4). The responsible entity or CCIV must have the power and approval to issue and allow applications and redemptions on any day that the securities are traded on the relevant market (cl 4(a)-(c)), and the responsible entity or CCIV must not "make a market" for those securities within the meaning of s 766D(1) of the Act while ignoring s 766D(2) (cl 4(e)). The definition therefore captures funds that are enabled to trade on market infrastructure but remain unlisted in the sense relevant to the instrument.

Authorised participant is a contractual and market-participant concept. The authorised participant must have an agreement with the responsible entity or CCIV to make applications to acquire and withdraw interests or shares and must be, or have engaged to act on its behalf, a participant in relation to a financial market to acquire and dispose of the interests or shares (cl 4). The definition ties primary-market access to market-participant status and a contractual role with the fund operator.

Acquisition and withdrawal facility is defined in the insertion to s 609 (see cl 8, inserted s 609(10F)). It must be stated in the current PDS that the facility will be offered each trading day and must allow authorised participants to acquire interests or shares by contributing consideration that predominantly comprises a parcel of securities, and allow authorised participants to request withdrawal by transferring consideration that predominantly comprises such a parcel of securities (cl 8, inserted para 10F).

Indicative net asset value per security is defined in a multi-part manner that covers registered-scheme ETFs and CCIV sub-fund ETFs and classes of interests or shares (cl 4). This term is central to the 15-minute update obligation in cl 6(3).

Minimum parcel and withdrawal fee per security are operational formulas for the creation/redemption mechanic and the comparison of fees between authorised participants and non-authorised-member redemptions (cl 4). Clause 5(2)(b) requires the constitution to prevent a withdrawal fee per security payable by non-authorised participants from being greater than the equivalent fee that would generally be payable by an authorised participant receiving cash redemption proceeds while securities are quoted when withdrawing the minimum parcel.

Finally, the instrument modifies how the Act treats "relevant interest" and "substantial holding" in the ETF context. Clause 8 inserts a new regime into s 609 that treats authorised participants as not having a relevant interest in securities that form part of ETF property merely because the ETF has an acquisition and withdrawal facility, subject to a PDS requirement (inserted ss 609(10A)-(10B)). It also sets the timing and mechanics for when a relevant interest arises on withdrawal (ss 609(10C)-(10D)) and preserves specific tabulations for voting power increases and timing (ss 609(10E)). Clause 9 inserts s 671AA into Chapter 6C to address substantial holding and beneficial tracing by deeming members of ETFs to be taken to have relevant interests in the securities that would be transferred upon a full withdrawal for purposes of the Chapter (cl 9).

These concepts collectively enable a market structure where primary-market creation and redemption occurs between the fund and authorised participants while secondary-market trading in the quoted class remains available to other members, with statutory adjustments to disclosure and to the operation of Chapters 6 and 6C to reflect those mechanics.

The instrument identifies discrete categories of affected persons and entities, and specifies duties that rest primarily on responsible entities of registered-scheme ETFs and corporate directors of CCIV sub-fund ETFs (see cl 5(1), cl 6(1), cl 7(1)). It also directly affects authorised participants, other members of ETFs (retail and institutional holders), market operators ASX and Cboe as referenced in the ETF definition (cl 4), and indirectly, brokers, market participants and compliance teams that implement publication and disclosure systems.

Responsible entities and CCIV corporate directors: These are the principal actors who may rely on the exemptions and who must comply with the conditions attached to them. They decide whether to restrict withdrawals to authorised participants (cl 5(1)), whether to provide pre-trading composition and pricing information to authorised participants (cl 6(1)), and whether to adopt the alternative continuous-disclosure approach under cl 7 by complying with s 675 as if they were an unlisted disclosing entity. They must ensure PDS statements and constitution clauses required by the instrument are in place (cl 5(2)(a)-(b), cl 6(2), cl 7(2)(b)).

Authorised participants: Defined in cl 4, authorised participants gain the exclusive primary-market rights that the instrument contemplates. They will be the only parties permitted to withdraw (redeem) from the ETF in normal circumstances when cl 5 relief is used. They gain access to pre-public information described in cl 6(1)(a)-(c), subject to the public-disclosure conditions in cl 6(3). Their market role includes being, or engaging participants in relation to a financial market, and entering an agreement with the responsible entity or CCIV to make applications for and withdrawals of interests or shares (cl 4).

Other members: Retail and other market investors who are not authorised participants remain able to trade on exchange (the instrument requires the PDS to state that, except in exceptional circumstances, non-authorised participants may sell on the market and that only authorised participants may normally withdraw, cl 5(2)(a)(ii)). They are protected by the PDS statement that when securities are suspended for more than five consecutive trading days, they will have a right to withdraw and receive payment in money within a reasonable time unless specified exceptions apply (cl 5(2)(a)(iii)). They also benefit from the required public update of the indicative NAV every 15 minutes (cl 6(3)(b)).

Investors and market counterparties: The instrument affects the information flow to market makers, brokers and liquidity providers because it allows some information to be provided to authorised participants in advance. However, the instrument conditions that any such information be publicly disclosed before the commencement of the next trading day and that indicative NAVs are updated every 15 minutes (cl 6(3)). Market infrastructure providers ASX and Cboe are not given duties by the instrument but are referenced in the ETF definition because admission to trading on those markets is central to the instrument’s scope (cl 4(a)).

Regulatory and compliance teams: Compliance personnel at responsible entities and CCIVs will need to implement PDS wording, constitution changes, public-data publication protocols, redaction and confidentiality routines for authorised-participant agreements, and governance over the acquisition and withdrawal facility and fee calculations. The insertions into Chapters 6 and 6C (cl 8 and cl 9) have implications for monitoring relevant interests and substantial-holding notifications, so registry and corporate affairs staff must adapt voting power and disclosure monitoring processes.

In short, the instrument primarily affects fund operators (responsible entities and CCIV corporate directors), authorised participants, and other ETF members, along with the operational and compliance ecosystem,custodians, registries, market participants and advisers,responsible for implementing the creation/redemption mechanics, PDS statements, and public disclosure obligations set out in the instrument.

The instrument imposes a set of conditional duties on responsible entities and CCIVs and creates adjusted statutory rights and treatments for authorised participants and members. These duties and rights are concentrated in Parts 2 and 3.

Duties tied to the exemptions and their conditions

• PDS content duties. To rely on the exemption in cl 5, the PDS must contain specific statements including that the responsible entity or corporate director will not treat members of the same class equally to the extent it restricts withdrawals to authorised participants, that except in exceptional circumstances only authorised participants may withdraw while other members may sell on market, and that if trading is suspended for more than five consecutive trading days members have a right to withdraw and receive payment in money unless specified exceptions apply (cl 5(2)(a)(i)-(iii)). To rely on the relief in cl 6 the PDS must state that the responsible entity or corporate director will provide the pre-trade information to authorised participants before other members (cl 6(2)). To rely on the cl 7 exemption from s 1017B, the PDS must state that the responsible entity or CCIV will comply with continuous disclosure requirements as if it were an unlisted disclosing entity (cl 7(2)(b)).

• Constitution duty on withdrawal fees. Clause 5(2)(b) requires that the constitution not permit a withdrawal fee per security payable by a member who is not an authorised participant to be greater than the withdrawal fee per security that would generally be payable by an authorised participant receiving redemption proceeds in cash while securities are quoted when withdrawing the minimum parcel. This duty is framed as a condition of the exemption; it affects constitution drafting and fee schedules.

• Public disclosure and NAV update duties. Clause 6(3)(a) requires public disclosure of any information provided to authorised participants as permitted by cl 6 before the commencement of the trading day after disclosure to authorised participants. Clause 6(3)(b) requires reasonable steps to ensure the indicative net asset value per security is publicly available and updated every 15 minutes during trading days. These duties impose operational publication and timing requirements.

• Continuous disclosure alternative. Clause 7 exempts reliance on s 1017B so long as the responsible entity or CCIV complies with s 675 as if it were an unlisted disclosing entity and includes the PDS statement noted above (cl 7(1)-(2)). This gives fund operators a tailored continuous disclosure pathway when operating an ETF as defined.

Rights and statutory treatments

• Right to restrict primary-market withdrawals to authorised participants. Clause 5 grants relief from equal-treatment obligations in the Act so that responsible entities or corporate directors may permit only authorised participants to withdraw. This is an operational right available only when the PDS and constitution conditions are satisfied.

• Right to provide information to authorised participants ahead of other members. Clause 6 authorises differential pre-public information sharing on the portfolio composition and creation/redemption baskets and price/value information, subject to public disclosure and NAV update conditions.

• Statutory treatment of relevant interests and substantial holdings. Clauses 8 and 9 alter statutory treatments. Inserted s 609(10A) provides that a member who is an authorised participant does not have a relevant interest in securities that form part of ETF property merely because the ETF has an acquisition and withdrawal facility, provided the PDS requirement in s 609(10B) is satisfied. Subsections 609(10C)-(10D) specify when that non-relevant-interest treatment stops applying, notably when the member makes a withdrawal request and when the member receives securities upon withdrawal. Clause 9 inserts s 671AA which, for Chapter 6C purposes, treats a member who does not have a relevant interest because of s 609(10A) as taken to have a relevant interest in the securities that would be transferred if the member made a withdrawal request for all of their interests, using the most recently disclosed numbers and classes published by the responsible entity or CCIV. This affects how substantial-holding tests, tracing rules and notification obligations apply.

Operational rights implied by the definition of acquisition and withdrawal facility

• Right to transact via parcels of securities. The acquisition and withdrawal facility must allow an authorised participant to acquire interests or shares by contributing consideration that predominantly comprises a parcel of securities, and to withdraw by receiving predominantly a parcel of securities (cl 8, inserted 609(10F)). The responsible entity or CCIV must publish the composition of the parcel from time to time.

Limits and conditions

• Exceptional-circumstances withdrawal right for non-authorised members. The PDS must state that when trading is suspended for more than five consecutive trading days, members have a right to withdraw and receive payment in money within a reasonable time unless the ETF is being wound up, is not liquid, or withdrawals are suspended in accordance with the constitution (cl 5(2)(a)(iii)). That builds a safety valve into the primary-market restriction.

• Timing rules for voting power. Inserted s 609(10C)-(10E) set rules for when a member is treated as acquiring relevant interests on withdrawal and when prior increases in voting power are disregarded for particular purposes (cl 8).

These duties and rights affect fund design, disclosure, constitution drafting, operations for creation/redemption mechanics, public data publication, continuous disclosure compliance choices, and corporate affairs monitoring for relevant interest and substantial holding obligations.

The instrument itself is a legislative instrument granting relief and declaring how certain sections of the Corporations Act apply; it does not create new penalty provisions or novel enforcement machinery in its text. Enforcement therefore operates through the Corporations Act regime that the instrument modifies. The instrument is made pursuant to specified powers in the Act, listed in clause 3: subsections 601QA(1), 655A(1), 673(1), 1020F(1) and 1243(2). These powers permit ASIC to make relief instruments and declarations of this type. The instrument’s conditions are expressed as conditions on the availability of relief; failure to comply with those conditions means the exemption or declared treatment will not apply.

Practical enforcement pathways and consequences

• Loss of relief. If a responsible entity or CCIV does not meet the PDS conditions, constitution condition, or public-disclosure/NAV update conditions required by the instrument, the statutory exemptions will not apply. That will expose the entity to the normal operation of the Act, including the equal treatment provisions being enforceable (e.g. paragraph 601FC(1)(d) and 1224D(2)(b)), and the standard continuous disclosure regime under s 1017B. The instrument does not specify remedial steps or transitional penalties; it operates by modifying statutory application only where its conditions are satisfied.

• ASIC supervisory and enforcement tools. ASIC retains its general regulatory powers under the Corporations Act. The instrument does not displace ASIC’s ability to supervise compliance with the Act or to use enforcement tools available under the Act if the responsible entity or CCIV contravenes other provisions. The instrument itself is silent on ASIC’s enforcement approach in relation to the instrument’s conditions.

• Corporate governance and civil liability. Responsible entities and CCIVs remain subject to fiduciary, statutory and common-law duties. The instrument does not alter those duties. If a responsible entity were to misrepresent PDS content required by the instrument or to fail to make required public disclosures, civil claims, misrepresentation claims or compliance actions under the Act could follow as they would in the absence of the instrument.

• Substantial-holding and relevant-interest obligations. The insertions into s 609 and Chapter 6C (cl 8 and cl 9) change the way relevant interests and substantial holdings are calculated for some ETF participants. Parties that rely on the altered treatment but are later found to have been incorrect in their characterisation could face obligations under Chapters 6 and 6C as they apply outside the instrument’s relief. The instrument specifies timing and deemed-acquisition rules (inserted ss 609(10C)-(10E) and s 671AA) designed to reduce legal uncertainty, but any dispute about whether the PDS requirement in s 609(10B) is satisfied, whether the published composition was properly updated, or whether a person was an authorised participant could become the subject of enforcement attention.

• No new criminal offences in the instrument. The instrument does not introduce new criminal offences or express new monetary penalties. It modifies statutory application. Any penalties remain those available under the Corporations Act for contraventions of the Act’s provisions that continue to apply.

In sum, the instrument’s conditions operate as gating requirements for relief. Non-compliance generally results in loss of the relief and exposure to the normal Act regime, including any enforcement action ASIC or third parties may bring under existing Act provisions. The instrument itself does not create separate penalty provisions or a distinct enforcement regime.

The instrument expressly interacts with multiple provisions of the Corporations Act and with market participation regimes administered separately by market operators. It does not create freestanding regulatory obligations outside the Act. The starting point is the authority clause: the instrument is made under subsections 601QA(1), 655A(1), 673(1), 1020F(1) and 1243(2) of the Act (cl 3), and it operates by modifying how existing Act provisions apply.

Interaction with equal treatment provisions (ss 601FC and 1224D)

• Clauses 5 and 6 provide relief from paragraph 601FC(1)(d) and 1224D(2)(b), which are equal treatment provisions requiring that members of a scheme be treated equally. The relief is expressly limited "to the extent that it would prevent" permitting only authorised participants to withdraw (cl 5(1)) and to the extent it would prevent providing specified information to authorised participants before other members (cl 6(1)). This means the instrument overlays an exception onto those equal-treatment obligations where the instrument’s conditions are satisfied.

Interaction with continuous disclosure (s 1017B) and s 675

• Clause 7 exempts responsible entities and CCIVs for ETF sub-funds from section 1017B, provided they comply with s 675 "as if the scheme or CCIV were an unlisted disclosing entity" and include the relevant PDS statements (cl 7(1)-(2)). The notes to cl 7 remind readers that s 1017B applies to a CCIV with modifications and that s 675 has modified operation in relation to CCIV securities (cl 7, Notes 1 and 2). The effect is to permit an alternative continuous disclosure model aligned with unlisted disclosing-entity obligations, rather than the continuous disclosure regime that applies to listed entities.

Interaction with Chapter 6 and Chapter 6C relevant-interest and substantial-holding rules

• Clause 8 inserts a tailored regime into s 609 that treats authorised participants as not having a relevant interest in securities forming part of ETF property merely because the ETF has an acquisition and withdrawal facility, subject to PDS statements (inserted ss 609(10A)-(10B)). It also specifies when relevant interest is taken to arise on withdrawal (ss 609(10C)-(10D)) and how voting power increases are to be treated for the purpose of section 611 item 9 (ss 609(10E)). Clause 9 inserts s 671AA into Chapter 6C to ensure substantial-holding and tracing calculations treat ETF members in a particular way,essentially by deeming them to have a relevant interest in the securities that would be delivered on full withdrawal using the most recently disclosed composition. These changes modify the operation of Chapters 6 and 6C in the ETF context.

Interaction with market operator rules

• The ETF definition is tied to trading on financial markets operated by ASX or Cboe (cl 4(a)). While the instrument does not purport to modify ASX or Cboe rules, it presumes coordination between the fund operator and market operators: either market admission for the quoted class or trading arrangements that permit exchange trading of the class. Compliance with market-operator listing or admission requirements remains a separate obligation for funds seeking to trade on those venues.

Interaction with fund constitutions and PDS regime

• The instrument’s relief is conditional on PDS disclosures and constitution clauses (cl 5(2)(a)-(b), cl 6(2), cl 7(2)(b)). That means operators must align their constitutions and PDS documents with the instrument’s conditions; those documents in turn interact with statutory duties and their obligations under the Act.

No express interaction with other Commonwealth laws in the instrument

• The instrument does not reference other Commonwealth statutes or regulations beyond the Corporations Act and the market names ASX and Cboe. Tax, anti-money laundering, privacy and competition laws are not addressed by the instrument; obligations under those laws remain unaffected except to the extent they interact with the commercial and disclosure structures the instrument enables.

Practical interaction consequences

• The instrument effectively creates a regulatory wedge between primary-market (creation/redemption) activity with authorised participants and secondary-market trading by other members. It adjusts the application of the relevant-interest and substantial-holding rules to reflect that wedge, and it offers a tailored continuous-disclosure route for ETFs that are able to rely on the instrument. Responsible entities and CCIVs must therefore ensure compliance not only with the instrument’s conditions but also with market rules, constitutional duties, and any other statutory obligations that operate outside the scope of the instrument.

The instrument includes procedural information about its origin and lifecycle but contains no amendments to itself in the text provided. Key temporal and authority milestones set out in the instrument are:

• Date made: The instrument is dated 13 March 2024 and is signed by Leah Sciacca as ASIC delegate (front matter). The instrument states its name in clause 1.

• Commencement: Clause 2 specifies that the instrument commences on the day after registration on the Federal Register of Legislation. The instrument does not state any delayed or staged commencement for particular clauses; the whole instrument commences at that time.

• Authority: Clause 3 records the Corporations Act subsections under which the instrument is made: 601QA(1), 655A(1), 673(1), 1020F(1) and 1243(2). Those statutory heads of power authorise relief and modifications of the operation of the Act in the manner implemented by the instrument.

• Repeal: Clause 10 provides a built-in expiry date, repealing the instrument at the start of 1 April 2029. The instrument therefore has a finite operation window subject to any earlier amendment or repeal by ASIC or Parliament under the statutory instrument and legislative process.

The instrument does not record any prior versions, transitional amendments or sunset variations within its text. It is thus a single, stand-alone legislative instrument with a defined commencement and a statutory expiry.

What to watch for in the future

• Potential ASIC amendments or replacement instruments. Because the instrument is time-limited, market participants and advisers should expect either an ASIC review, an extension, or replacement relief before the repeal date if the regime is to continue. Any such change would be made by a further legislative instrument under the Act.

• Interaction with Corporations Act amendments. If the Parliament amends Chapters 6 or 6C in ways that affect the inserted provisions or the sections listed in clause 3, further amendments or consequential changes may be required.

• Market practice and PDS evolution. The instrument’s operation depends heavily on PDS content. Changes to disclosure standards or to ASIC class orders or guidance about PDS statements could require updates to the PDS and to constitutional drafting.

Since the instrument is new, the short amendment history comprises only the making date and the scheduled repeal date. Market participants should monitor ASIC guidance and legislative developments that might affect the instrument’s continued suitability or the need for amendment prior to repeal.

The instrument text contains no references to case law, litigation, or adjudication history. It is newly made relief and declarations by ASIC and not itself the product of court decisions. Consequently there is no direct litigation history recorded in the instrument.

Areas likely to be litigated or become the subject of legal dispute

Although the instrument itself is not accompanied by litigation records, its operative features create several potential points of legal contention that market participants, responsible entities and advisers should anticipate. The instrument provides statutory modifications and conditions that will affect allocation of rights and regulatory obligations. Potential dispute areas grounded in the instrument text include:

• Interpretation of PDS requirement sufficiency. Inserted s 609(10B) and multiple provisions in Part 2 require that the current PDS contain particular statements. Disputes could arise about whether the PDS wording actually satisfies those statutory requirements. For example, whether a PDS statement gives the requisite clarity that an acquisition and withdrawal facility will be offered on each trading day or whether the PDS sufficiently discloses that only authorised participants will normally be permitted to withdraw could be contested.

• Whether a person is an "authorised participant." The authorised participant definition in cl 4 requires both a contractual agreement with the responsible entity or CCIV and that the person is, or has engaged to act on its behalf, a participant in relation to a financial market. Disputes could arise over the sufficiency of contractual arrangements, the nature of the market-participant engagement, or whether intermediary arrangements satisfy the definition.

• Timing and adequacy of public disclosure. Clause 6(3)(a) requires public disclosure of any information provided to authorised participants before the commencement of the trading day after the disclosure was made to authorised participants, and cl 6(3)(b) requires 15-minute indicative NAV updates. Litigation or regulatory action could focus on whether disclosure was timely, whether "reasonable steps" were taken to ensure NAV updates, or whether the public dissemination mechanisms actually delivered the information to the market in a meaningful way.

• Application of the modified relevant-interest rules on withdrawal. Inserted ss 609(10C) and (10D) set out when the non-relevant-interest treatment stops applying and when a member is treated as acquiring a relevant interest on withdrawal. Disputes may concern whether a withdrawal request was effective, the timing of transfer, and whether the member ought to be taken to have acquired a relevant interest at a particular moment for Chapters 6 and 6C purposes.

• Substantial-holding tracing under s 671AA. Clause 9 takes the unusual step of deeming a member to have a relevant interest in the securities that would be transferred on a full withdrawal for substantial-holding calculations. Litigation could test whether the "most recently disclosed" composition was accurate or sufficiently specific, and whether the tracing and aggregation rules in Chapter 6C should be applied differently in practice.

There is no litigation history in the instrument itself. Practitioners should expect that, should disputes arise, courts or tribunals will interpret the instrument in the context of the wider Corporations Act regime, including the Act’s equal treatment obligations, disclosure obligations, and the statutory purpose of Chapters 6 and 6C. Absent case law cited in the instrument, parties will need to rely on statutory interpretation principles and the Act’s structure if litigation ensues.

The instrument creates a framework that is operationally precise but contains several details that can be overlooked or misunderstood. The following are concrete transactional, disclosure and compliance "gotchas" grounded in the instrument’s text.

PDS wording must meet statutory tests, not just commercial explanation

• Multiple reliefs hinge on specific PDS statements (cl 5(2)(a), cl 6(2), cl 7(2)(b), inserted s 609(10B)). The instrument treats PDS statements as a statutory gating condition. Boilerplate or ambiguous PDS language risks losing the relief. For example, cl 5(2)(a)(iii) requires a PDS statement providing a specific right to withdraw in cash when trading is suspended for more than five consecutive trading days, subject to three enumerated exceptions. Failing to capture those elements precisely may prevent reliance on cl 5 relief.

Constitution drafting constraint on withdrawal fees

• Clause 5(2)(b) requires that the constitution not permit a withdrawal fee per security payable by a non-authorised participant to be greater than what would generally be payable by an authorised participant receiving cash redemption proceeds when withdrawing the minimum parcel while securities are quoted. That restricts fee schedules and may require operational mechanisms to calculate comparable per-security fees in different redemption scenarios. The note in cl 5 emphasises that this applies irrespective of how fees are otherwise calculated.

Timing of public disclosure after authorised-participant disclosures

• Clause 6(3)(a) requires public disclosure of any information disclosed to authorised participants "before the commencement of the trading day after the day on which such disclosure was made to authorised participants." That is a tight deadline as a practical matter. Fund operators must coordinate information controls to ensure that if a portfolio composition or index-value figure is communicated to an authorised participant during one trading day, it is published publicly before the next trading day begins.

15-minute NAV-update obligation

• Clause 6(3)(b) requires reasonable steps to ensure the indicative net asset value per security is publicly available and updated every 15 minutes during each trading day. Operators must decide the mechanism for "public availability",whether via the ASX/Cboe data feeds, their own website, data vendors, or a combination. They must also determine how to automate 15-minute calculations or approximations consistent with the instrument’s definition of indicative net asset value per security (cl 4).

Definitions that constrain candidate ETFs

• The ETF definition requires that the interests or shares be in a class that is able to be traded on ASX or Cboe, but the scheme or sub-fund must not be listed on those markets (cl 4(a)). Funds that are already listed do not fall within the instrument. Also the responsible entity or CCIV must not "make a market" for those interests (cl 4(e)), which requires operational and compliance interpretation vis à vis market-making activities.

Withdrawal safety valve exceptions

• The PDS must promise a right to withdraw and receive payment in money when securities are suspended for more than five consecutive trading days, but that right is subject to three exceptions (the ETF is being wound-up, the ETF is not liquid, or withdrawals are suspended under the constitution) (cl 5(2)(a)(iii)). The presence of these exceptions means that a suspension could result in no right to withdraw in certain circumstances; careful drafting and investor communication are essential.

Authorised-participant definition depends on both contract and market participant status

• Clause 4 requires an authorised participant to have an agreement with the responsible entity or CCIV and to be, or engage someone who is, a participant in relation to a financial market. If a counterparty lacks direct market-participant status and relies on agents or brokers, that arrangement must fit within the definition. Failure to structure the relationship correctly can compromise the authorised-participant designation.

Interaction with relevant-interest and substantial-holding calculations

• The instrument provides a safeguard in that authorised participants do not have a relevant interest merely because the acquisition and withdrawal facility exists, provided the PDS requirement in s 609(10B) is satisfied (cl 8 inserted s 609(10A)-(10B)). But there are detailed rules about when that protection stops (inserted ss 609(10C)-(10D)) and how substantial-holding calculations operate (cl 9, inserted s 671AA). Registry, corporate and compliance teams must map the timing rules carefully to avoid misreporting.

Reliance on the "most recently disclosed" composition for substantial-holding purposes

• Clause 9 treats a member as having a relevant interest in the securities that would be transferred using the "numbers and classes of securities most recently disclosed to the member by the responsible entity or CCIV" in relation to a withdrawal request. If the fund publishes different composition baskets for acquisition and redemption, or updates composition frequently, the "most recently disclosed" datum becomes critical for substantial-holding calculations. Accuracy and version control in published compositions are essential.

No change to other legal obligations

• The instrument does not relieve responsible entities or CCIVs from other legal obligations outside the specified modifications. AML/CTF, tax, privacy, competition and other statutory duties remain in force. The instrument does not provide a waiver for those regimes.

Finite lifespan

• The instrument is repealed at the start of 1 April 2029 (cl 10). Operators need contingency plans for what happens to PDSs, constitutions and operational procedures if relief expires. There is no automatic grandfathering clause in the instrument; the Act will revert to normal operation unless new relief is granted.

Those "gotchas" are operational in nature and map directly to the instrument’s text. They show the need for careful PDS drafting, constitution drafting, publication and data-control mechanisms, and coordination among legal, compliance and operations teams.

Compliance with the instrument requires alignment of PDS content, constitutional provisions, operational mechanics for creation and redemption, public disclosure systems, and corporate monitoring. The following steps are grounded in the instrument’s text and targeted at responsible entities, CCIV corporate directors, authorised participants and their advisers.

1. Confirm ETF eligibility under the instrument

• Verify the fund meets the ETF definition in clause 4: a registered scheme or CCIV sub-fund where the relevant class of interests or shares is able to be traded on ASX or Cboe, the scheme or sub-fund is not listed on those markets, the responsible entity or CCIV has the power and approval to issue and allow applications and redemptions on trading days, the responsible entity or CCIV permits applications and redemptions on trading days, and the responsible entity or CCIV does not "make a market" for those securities (cl 4(a)-(e)). If any element is unmet, the instrument’s relief will not apply.

2. Update the PDS to include the required statements

• For cl 5 relief: include the PDS statements set out in cl 5(2)(a)(i)-(iii): acknowledgement that members of the same class will not be treated equally to the extent withdrawal is restricted to authorised participants; that except in exceptional circumstances only authorised participants may withdraw while other members can sell on market; and that when trading is suspended for over five consecutive trading days members have a right to withdraw for money within a reasonable time except in the three enumerated cases.
• For cl 6 relief: include a clear PDS statement that the responsible entity or corporate director will provide the specific information in cl 6(1)(a)-(c) to authorised participants before other members.
• For cl 7 relief: include a PDS statement that the responsible entity or CCIV will comply with the continuous disclosure requirements as if the scheme or CCIV were an unlisted disclosing entity (cl 7(2)(b)).
• Ensure PDS wording is precise and defensible as meeting the statutory requirement in inserted s 609(10B) for the "current PDS requirement" where relevant (cl 8).

3. Amend the constitution to fit the withdrawal-fee condition

• Ensure the constitution does not permit a withdrawal fee per security payable by a non-authorised participant that exceeds the withdrawal fee per security generally payable by an authorised participant receiving cash redemption proceeds when withdrawing the minimum parcel (cl 5(2)(b)). Implement procedures for calculating equivalent per-security fees across different redemption forms and ensure the constitution reflects those calculations or contains a fee cap.

4. Implement or formalise authorised-participant agreements and market-participant status

• Put in place agreements that meet the authorised participant definition in cl 4: an agreement with the responsible entity or CCIV in relation to making applications to acquire and withdraw interests or shares, and either being a participant in relation to a financial market or engaging someone to act on its behalf. Ensure record-keeping and counterparty documentation support the authorised-participant designation.

5. Publish and maintain acquisition/redemption parcel compositions

• Set up operational processes to publish the composition of the parcel of securities that predominantly constitutes consideration for acquisitions and withdrawals, as required by the acquisition and withdrawal facility definition in inserted s 609(10F) (cl 8). Ensure the composition can be updated and that "most recently disclosed" versions are retained for substantial-holding tracing and Chapter 6C purposes (cl 9, inserted s 671AA).

6. Data control and public-disclosure workflows

• Build workflows so that any information disclosed to authorised participants under cl 6(1) is publicly disclosed before the commencement of the next trading day after the disclosure to authorised participants, as required by cl 6(3)(a). That requires coordinating legal, compliance and trading desks, and maintaining time-stamped logs of authorised-participant communications and public postings.

7. Implement 15-minute indicative NAV updates

• Establish a method to make the indicative net asset value per security publicly available and update it every 15 minutes during trading days (cl 6(3)(b)). Decide on the dissemination channel(s) that constitute "publicly available" (for example, the fund’s website, ASX or Cboe data feeds, and major data vendors). Document "reasonable steps" taken to ensure updates.

8. Choose the continuous disclosure approach and implement s 675 compliance if relying on cl 7

• If relying on the exemption from s 1017B in cl 7, ensure the scheme or CCIV complies with s 675 as if it were an unlisted disclosing entity and include the PDS statement required by cl 7(2)(b). Map corporate disclosure committees, event identification triggers and dissemination channels to the unlisted disclosing-entity standard in s 675. Ensure CCIV-related modifications are handled in light of the instrument’s Notes (cl 7, Notes 1-2).

9. Update registry and corporate affairs processes for relevant-interest and substantial-holding monitoring

• Implement monitoring that reflects inserted s 609 and s 671AA. Specifically, track where authorised participants do not have a relevant interest merely because of the acquisition and withdrawal facility (inserted s 609(10A)), but also track when that treatment stops applying on withdrawal requests (inserted ss 609(10C)-(10D)). For substantial-holding purposes, be prepared to treat members as having a relevant interest in the securities that would be transferred on full withdrawal using the most recently disclosed composition (cl 9). Document procedures to handle disclosure notifications and voting-power calculations accordingly.

10. Governance, record-keeping and internal approvals

• Establish governance for decisions to permit only authorised participants to withdraw, to provide pre-public information to authorised participants, and to publish acquisition/redemption baskets. Maintain audit trails demonstrating compliance with the instrument’s timing and disclosure conditions, and ensure sign-offs by legal and compliance prior to making any authorised-participant disclosures.

11. Contingency planning

• Because the instrument is repealed on 1 April 2029 (cl 10), prepare for the instrument’s expiry through contractual and operational contingency plans. Consider whether to migrate to a listed ETF model, seek updated relief, or adjust the fund’s mechanics and PDS ahead of the repeal date.

12. Coordinate with market operators and service providers

• Confirm that ASX or Cboe admission and trading arrangements accommodate the proposed design, and coordinate with market data vendors, registries and custodians to ensure timely dissemination of indicative NAVs and composition baskets.

Documenting compliance with these steps, and keeping contemporaneous records of all disclosures and composition publications, will assist in demonstrating that the conditions of the instrument have been satisfied and that the altered statutory treatments in Chapters 6 and 6C were properly engaged.