ASIC Corporations (Short Selling) Instrument 2018/745

This legislative instrument (ASIC Corporations (Short Selling) Instrument 2018/745, as compiled to 03/02/2026) modifies how Part 7.9 of the Corporations Act 2001 applies to so-called section 1020B products, by inserting targeted exemptions, reporting relaxations and definitional changes into section 1020B and related regulatory provisions. The instrument is made under subsection 1020F(1) of the Corporations Act (see s 3) and operates by notionally varying section 1020B of the Act (multiple insertions) and by varying Division 15 of Part 7.9 of the Corporations Regulations (see s 17(1)). The amendments are implemented as legislative insertions and regulatory variations rather than standalone new offences or substantive new statutory duties outside Part 7.9.

Mechanically, the instrument:

Adds bespoke short‑selling exemptions for market makers in exchange traded products (ETPs) and specified structured products (s 5, inserting subsections 1020B(4A)-(4D) notionally); these permit certain short sales by an “ETP market maker” when the fund operator allows applications and redemptions and the sales occur in the course of market making on a declared financial market (s 5(4A)(c)-(d)). The exemption is conditional on prior notice to ASIC and ongoing recordkeeping and settlement steps (s 5(4B)).
Creates a bona fide hedging exemption for market makers generally (s 6, inserting 1020B(5A)-(5J) notionally). That exemption applies where short sales manage the financial consequences of making a market in a “hedged product” and imposes operational conditions: pre‑ or same‑day hedging actions, beliefs on reasonable grounds about obtainable securities or securities lending arrangements, notification obligations for failures and specified short position reporting to ASIC (see 1020B(5B)-(5F)).

Commonwealth Coat of Arms and ASIC logo

made under subsection 1020F(1) of the Corporations Act 2001

Compilation No.5

Compilation date: 03 February 2026

Includes amendments up to: ASIC Corporations (Amendment) Instrument 2026/24 (F2026L00061)

About this compilation

This compilation

This is a compilation of the ASIC Corporations (Short Selling) Instrument 2018/745 that shows the text of the law as amended and in force on 03/02/2026 (the compilation date).

The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.

Uncommenced amendments

The effect of uncommenced amendments is not shown in the text of the compiled law. The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. Any uncommenced amendments affecting the law are accessible on the Register (www.legislation.gov.au).

Application, saving and transitional provisions

If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.

Modifications

If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. Any modifications affecting the law are accessible on the Register.

Self-repealing provisions‑repealing provisions

If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.

Contents

Self-repealing provisions‑repealing provisions

Part 1—Preliminary

1 Name of legislative instrument

3 Authority

4 Definitions

Part 2—Short selling exemptions: market participants

5 Market makers: exchange traded funds and specified structured products

6 Market makers: Bona fide hedging

7 Exchange traded options: sales effected by exercising options

8 Exchange traded options: other scenarios

9 Debentures: Clearing and settlement participants

10 Deferred purchase agreements

Part 3—Short selling exemptions: capital markets

11 Deferred settlement trading arrangements on licensed markets

12 Initial public offers: Sale offers through special purpose vehicles

Part 4—Exemptions from short selling reporting

13 Market makers: exchange traded funds and specified structured products

14 Market makers: bona fide hedging

15 Low volume and low value short positions

Part 5—Definitional and other changes

16 Definitional changes

17 Short position reporting and short sale transaction reporting

Endnotes

Endnote 1—About the endnotes

Endnote 2—Abbreviation key

Endnote 3—Legislation history

Endnote 4—Amendment history

Part 1—Preliminary

1 Name of legislative instrument

This is the ASIC Corporations (Short Selling) Instrument 2018/745.

3 Authority

This instrument is made under subsection 1020F(1) of the Corporations Act 2001.

4 Definitions

In this instrument:

Act means the Corporations Act 2001.

Regulations means the Corporations Regulations 2001.

Section 1020B products has the meaning given by subsection1020B(1) of the Act.

Part 2—Short selling exemptions: market participants

5 Market makers: exchange traded funds and specified structured products

Part 7.9 of the Act applies in relation to section 1020B products as if section 1020B of the Act were modified or varied by, after subsection (4), inserting the following subsections:

Market makers: exchange traded funds and specified structured products

(4A) Subsection (2) does not apply to an ETP market maker in relation to a sale of:

(a) interests (the shorted product) in, or securities (the shorted product) of, an exchange traded fund; or

(b) securities (the shorted product) that are specified structured products;

by the ETP market maker where both of the following are satisfied:

(c) the sale occurs on a day where the operator of the fund, the company or the foreign company (as applicable) allows applications for and redemptions of interests or securities in the same class as the shorted product;

(d) the sale is in the course of making a market in the shorted product on a declared financial market operated in this jurisdiction.

(4B) The ETP market maker must:

(a) before engaging in conduct in first reliance on subsection (4A), give a notice of reliance to ASIC;

(b) before making an offer to sell the shorted product, keep a record that states that the proposed sale will be a short sale, and preserve the record for 12 months after the day on which the last entry was made in the record;

(c) as soon as reasonably practicable after the sale of the shorted product but before the time for delivery of the shorted product, acquire or apply for a sufficient number of financial products in the same class as the shorted product to enable the ETP market maker to fulfil their delivery obligations under the sale;

(d) if the sales of shorted products by the market maker in reliance on subsection (4A) during a reporting period exceeds the settlement failure limit—give a settlement failure notice to ASIC within 28 days after the end of the reporting period;

(e) if the relevant market operator has given a notice of suspension or cancellation to the ETP market maker—give a copy of the notice to ASIC within 28 days of receiving the notice;

(f) if the operator of the scheme, the company or the foreign company has given a notice of suspension or cancellation to the ETP market maker in relation to the exchange traded fund or specified structured product—give a copy of the notice to ASIC within 28 days of receiving the notice;

(g) if the ETP market maker no longer seeks to rely on subsection (4A) in relation to an exchange traded fund or a specified structured product or a class of exchange traded funds or specified structured products—give a notice of cessation to ASIC.

(4C) Subsection (4A) does not apply to an ETP market maker in relation to an exchange traded fund or a specified structured product if ASIC has given a notice of exclusion to the ETP market maker and has not withdrawn it.

(4D) In subsections (4A) to (4C):

(a) exchange traded fund (or ETF) means a scheme or foreign company that satisfies all of the following:

(a) is:

(i) a registered scheme or a managed investment scheme that is not required to be registered under Chapter 5C; or
(ii) a foreign company which has the economic features of a managed investment scheme and is an open-ended investment company registered with the U.S. Securities and Exchange Commission under the Investment Company Act 1940 of the United States of America;

(b) interests in the scheme or securities of the foreign company are in a class that are able to be traded on a declared financial market operated in this jurisdiction;

(c) the operator of the scheme or the foreign company has the power and approval to issue interests or securities in that class on any day that those interests or securities are able to be traded on the financial market;

(d) the operator of the scheme or the foreign company allows applications for and redemptions of interests or securities in that class;

(e) the price or value of the financial product, index, currency, commodity or other thing that the scheme or foreign company invests in or tracks is continuously disclosed or can be immediately ascertained.

ETP (or exchange traded product) means an exchange traded fund or a specified structured product.

ETP market maker, in relation to interests in, or securities of, an exchange traded fund or securities that are specified structured products, where the interests or securities are able to be traded on a declared financial market operated in this jurisdiction, means a person who:

(a) holds an Australian financial services licence that covers making a market in the interests or securities or is exempt from the requirement to hold such a licence for providing that financial service; and

(b) either has:

(i) entered into an agreement with the relevant market operator; or

(ii) demonstrated to the relevant market operator that it has been appointed by the operator of the scheme, company or foreign company;

to make a market for those interests or securities.

notice of cessation, in relation to an ETP market maker, means a notice specifying that the ETP market maker no longer intends to rely on subsection (4A) in relation to an exchange traded fund or a specified structured product or a class of exchange traded funds or specified structured products.

notice of exclusion, in relation to an ETP market maker, means a notice specifying that the ETP market maker is excluded from relying on subsection (4A) in relation to an exchange traded fund or a specified structured product or a class of exchange traded funds or specified structured products.

notice of reliance, in relation to an ETP market maker, means a notice that:

(a) states that the ETP market maker intends to rely on subsection (4A) to make short sales of interests in, or securities of, exchange traded funds or specified structured products in the course of making a market in those interests or securities; and

(b) includes the name, and unique code assigned by the relevant market operator, for each exchange traded fund and specified structured product to which the notice relates.

Note: A new notice of reliance must be given to ASIC if the ETP market maker wishes to rely on subsection (4A) in relation to an exchange traded fund or a specified structured product that was not included in an earlier notice of reliance.

notice of suspension or cancellation, in relation to an ETP market maker, means a notice that has the effect of suspending or cancelling:

(a) the agreement with the relevant market operator; or

(b) the appointment by the operator of the scheme, company or the foreign company;

for the ETP market maker to make a market for interests in, or securities of:

(d) a class of exchange traded funds or specified structured products.

precious metal means each of gold, silver, platinum and palladium.

reporting period means a 12-month period commencing on 1 April of any given year and ending on 31 March in the following year.

settlement failure limit, in relation to an ETP market maker, means 1% of the volume or value of the sales by the ETP market maker during a reporting period in reliance on subsection (4A) that have failed to settle within the time period required under the relevant operating rules of the relevant market.

settlement failure notice, in relation to an ETP market maker, means a notice setting out the volume and value of the sales by the ETP market maker during a reporting period in reliance on subsection (4A) that have failed to settle within the time period required under the relevant operating rules of the relevant market.

specified structured product means a security in relation to which the following apply:

(a) the security is in a class that is able to be traded on a declared financial market operated in this jurisdiction, is admitted to trading status as a structured product on that market and is not an interest or a security in an ETF;

(b) the security is issued by a company that has the power and approval to issue the security in that class on any day that the securities are able to be traded on the financial market;

(d) the value of the security (other than to a nominal extent) derives from the value of one or more precious metals that are held on trust for the holder of the security;

(e) the holders of securities do not have the day-to-day control over the operation of the company which issues the security.

(b) for the avoidance of doubt, paragraph (4B)(d) applies to an ETP market maker in relation to a reporting period even if the ETP market maker stopped relying on subsection (4A) during the reporting period because of a notice of cessation or a notice of exclusion.”.

6 Market makers: Bona fide hedging

Part 7.9 of the Act applies in relation to section 1020B products as if section 1020B of the Act were modified or varied by, after subsection (4), inserting the following subsections:

“Market makers: bona fide hedging

(5A) Subsection (2) does not apply to a market maker in relation to a sale of a security (the shorted product) or managed investment product (the shorted product) by the market maker where all of the following apply:

(a) the market maker has issued, acquired or disposed of a financial product (the hedged product), or has agreed to issue, acquire or dispose of a financial product (the hedged product), in the course of making a market for the hedged product;

(b) the sale of the shorted product is a bona fide transaction to manage, avoid or limit the financial consequences of the dealing or proposed dealing mentioned in paragraph (a);

(i) a constituent of the index known as the S&P/ASX 300; or

(ii) an interest in the SPDR S&P/ASX 200 Fund (STW); or

(iii) a security that is an approved ETP or an interest in an approved ETP, where:

(A) the hedged product is an approved ETO in relation to that ETP; and

(B) the market maker has been appointed to make a market in the approved ETO by the operator of the market that the approved ETO is admitted to trading on;

Note: The S&P/ASX 300 index is compiled and calculated by S&P Dow Jones Indices LLC, a division of S&P Global, Inc. Its constituents are subject to change from time to time. Details of the current constituents may be found via www.spglobal.com.

(5B) The market maker must only engage in the conduct covered by and in reliance on subsection (5A) if, at the time of the sale, the market maker believes on reasonable grounds that either:

(a) for any shorted product—before the time for delivery of the shorted product, a securities lending arrangement in relation to financial products in the same class as the shorted product can be put in place so that the shorted product can be unconditionally vested in a buyer by the time for delivery; or

(b) for a shorted product that is:

(i) an interest in STW; or

(ii) an interest in an approved ETP; or

(iii) a security that is an approved ETP;

before the time for delivery of the shorted product, the market maker can acquire or apply for a sufficient number of interests in STW, interests in the approved ETP or securities that are the approved ETP so that the shorted product can be unconditionally vested in a buyer by the time for delivery.

(5C) The market maker must do at least one of the following things by the end of the day (sale day) on which the market maker makes the sale of the shorted product in reliance on subsection (5A) so that the shorted product can be unconditionally vested in a buyer by the time for delivery:

(a) for any shorted product—have acquired a financial product in the same class as the shorted product; or
(b) for any shorted product—have entered into a contract to buy a financial product in the same class as the shorted product where the market maker has a right to have that financial product vested in the market maker that is conditional only upon all or any of the following:
  (A) payment of the consideration in respect of the purchase;
  (B) the receipt by the market maker of a proper instrument of transfer in respect of the product;
  (C) the receipt by the market maker of the documents that are, or are documents of title to, the product; or
(c) for any shorted product—have entered into a securities lending arrangement in relation to financial products in the same class as the shorted products; or
(d) for a shorted product that is an interest in STW, an interest in an approved ETP or a security that is an approved ETP—have acquired or applied for interests in STW, interests in the approved ETP or securities that are the approved ETP.

(5D) A market maker that fails to comply with subsection (5C) must notify ASIC in writing of the failure by no later than 9 am in Sydney, New South Wales on the next business day after the sale day.

(5E) The market maker must give to ASIC in the form required by ASIC particulars of the person’s short position in relation to the shorted product as at:

(a) where the nominated time is, or corresponds to a time that is, on or before 11:59 pm in Sydney, New South Wales—the nominated time 3 reporting days before the day the particulars must be given under subsection (5F); and

(b) otherwise—the nominated time 2 reporting days before the day the particulars must be given under subsection (5F); and

(5F) The market maker must give the particulars about the short position:

(a) where the nominated time is, or corresponds to a time that is, on or before 11:59 pm in Sydney, New South Wales—on or before 9 am in Sydney, New South Wales on the third reporting day after entering into the agreement to sell that causes the short position to occur;

(b) otherwise—on or before 9am in Sydney, New South Wales on the second reporting day after entering into the agreement to sell that causes the short position to occur; and

(c) in either case—on or before 9 am in Sydney, New South Wales on each subsequent reporting day as long as the market maker has a short position.

(5G) Paragraph (5F)(c) applies whether or not the particulars about the short position have changed from that given on the previous day.

(5H) The market maker does not have to comply with subsection (5G) in relation to that short position if the market maker:

(a) is required by subsection 1020AB(3) to give particulars of the market maker’s short position on a day in relation to a security or product that is in the same class as the shorted product; or

(b) has a short position in relation to the shorted product on a day that does not exceed the value limit and the volume limit on the day.

(5J) In subsections (5A) to (5H):

approved ETP means each of:

(a) the Vanguard MSCI Index International Shares ETF; and

(b) the iShares Core S&P 500 ETF; and

(d) the Global X Physical Gold Structured.

approved ETO means an exchange traded option that is exercisable:

(a) only on one specific date; and

(b) in respect of an interest in an underlying approved ETP.

ETO (or exchange traded option) means an option registered with:

(a) ASX Clear Pty Limited; or

(b) ASX Clear (Futures) Pty Limited.

ETP (or exchange traded product) has the same meaning as in subsection 1020B(4D).

market maker means a person who holds an Australian financial services licence that covers making a market in a financial product or is exempt from the requirement to hold such a licence for providing that financial service.”.

7 Exchange traded options: sales effected by exercising options

Part 7.9 of the Act applies in relation to section 1020B products as if section 1020B of the Act were modified or varied by, after subsection (4), inserting the following subsections:

“Exchange traded options: sales effected by exercising options

(6A) Subsection (2) does not apply to a person (option holder) that holds an option registered with ASX Clear Pty Limited in relation to a sale of a security (the shorted product) or managed investment product (the shorted product) where the transaction effecting the sale of the shorted product is the result of the exercise of the option by the option holder.

(6B) The option holder must give to ASIC in the form required by ASIC particulars of the holder’s short position in relation to the shorted product as at:

(b) otherwise—the nominated time 2 reporting days before the day the particulars must be given under subsection (6C).

(6C) The option holder must give the particulars about the short position:

(a) where the nominated time is, or corresponds to a time that is, on or before 11:59 pm in Sydney, New South Wales—on or before 9 am in Sydney, New South Wales on the third reporting day after the exercise of the option that causes the short position to occur;

(b) otherwise—on or before 9 am in Sydney, New South Wales on the second reporting day after the exercise of the option that causes the short position to occur; and

(c) in either case—on or before 9 am in Sydney, New South Wales on each subsequent reporting day as long as the holder has a short position.

(6D) Paragraph (6C)(c) applies whether or not the particulars about the short position have changed from that given on the previous day.

(6E) The option holder does not have to comply with subsection (6B) in relation to that short position if the holder:

(a) is required by subsection 1020AB(3) to give particulars of the holder’s short position on a day in relation to a security or product that is in the same class as the shorted product; or

(b) has a short position in relation to the shorted product on a day that does not exceed the value limit and the volume limit on the day.”.

8 Exchange traded options: other scenarios

(1) A person does not have to comply with subsection 1020B(2) of the Act in relation to a sale of section 1020B products that is done by issuing or selling an exchange traded option on a financial market.

(2) A person does not have to comply with subsection 1020B(2) of the Act in relation to a sale of unobtained section 1020B products if the person (or, where the person is selling as an agent, the principal) is, at the time of the sale, able to obtain at least the number of section 1020B products of the same class as the unobtained section 1020B products by exercising exchange traded options.

(3) For the purposes of subsection (2):

(a) the number of section 1020B products of a class that a person is able to obtain at the time of a sale is to be calculated according to the following formula:

FPIO – FPSO – PS

where:

FPIO (Financial Products Immediately Obtainable) means the number of section 1020B products of the class that, at the time of the sale, the person is able to obtain by exercising exchange traded options at a price:

(a) that does not exceed the sale price payable to the person under the sale; or
(b) that exceeds the sale price by an amount that is no more than an amount deposited by the person with:
  (i) ASX Clear Pty Limited; or
  (ii) ASX Clear (Futures) Pty Limited;
  before and in relation to the sale;

FPSO (Financial Products Subject to Options) means the number of section 102B products of the class sold over which the person has issued exchange traded options which would oblige the person to deliver the products if the options were exercised and that, at the time of sale, have not expired or been exercised;

PS (unobtained financial products Previously Sold) means the number of unobtained section 1020B products previously sold in sales that have not been completed at the time of the sale; and

(b) the price payable by the person for obtaining section 1020B products by exercising exchange traded options is to be calculated by reference first to the option with the lowest exercise price, then to the option with the second lowest exercise price, and so on in ascending order of price until the necessary number of options would have been exercised.

(4) In this section:

exchange traded option has the same meaning as in subsection 1020B(5J) of the Act.

Note: Subsection 1020B(5J) of the Act is notionally inserted by section 6 of this instrument.

unobtained section 1020B products means section 1020B products of a class:

(a) that a person has agreed to sell; and

(b) in relation to which the person (or where the person is selling as an agent, the principal) does not, at the time of the sale, have a presently exercisable and unconditional right to vest in a buyer.

9 Debentures: Clearing and settlement participants

(1) A person that is entitled to use the clearing and settlement facilities of a CS facility licensee or the Reserve Bank Information and Transfer System does not have to comply with subsection 1020B(2) of the Act in relation to a sale of eligible debentures where the person:

(a) sells the debentures as principal; and

(b) believes on reasonable grounds that arrangements can be put in place before the time for delivery of the debentures that will enable the debentures to be unconditionally vested in a buyer by the time for delivery.

(2) In this section:

eligible debentures mean:

(a) bonds issued by a government; or

(b) debentures or bonds of a body corporate if the value of debentures or bonds on issue with the same maturity and coupon terms exceeds $100,000,000.

10 Deferred purchase agreements

(1) A person who agrees to sell section 1020B products under a deferred purchase agreement does not have to comply with subsection 1020B(2) of the Act in relation to the sale.

(2) In this section:

deferred purchase agreement means an agreement to sell securities (delivery products) or managed investment products (delivery products) that are able to be traded on a declared financial market operated in this jurisdiction, under which:

(a) a person agrees to deliver, at least 12 months after entering into the agreement, delivery products at a specified time (maturity) in the future to another person; and

(b) the number and value of the delivery products to be delivered at maturity is ultimately determined or derived from the value or amount of one or more of the following:

(i) other financial products (other than a derivative that relates to the delivery products);
(ii) an asset;
(iii) a rate (including an interest rate or exchange rate);
(iv) an index;
(v) a commodity; and

(c) the person who agrees to deliver the delivery products at maturity has the right, in circumstances set out in the agreement, to instead deliver other securities or managed investment products where the securities or products are, at maturity, in a class of financial products that is a constituent of the index known as the S&P/ASX 200.

Note: This index is compiled and calculated by S&P Dow Jones Indices LLC,, a division of S&P Global Inc. Its constituents are subject to change from time to time. Details of the current constituents may be found via www.spglobal.com.

Part 3—Short selling exemptions: capital markets

11 Deferred settlement trading arrangements on licensed markets

Part 7.9 of the Act applies in relation to section 1020B products as if section 1020B of the Act were modified or varied by, after subsection (4), inserting the following subsections:

“Public offers—conditional deferred settlement trading arrangements

(7A) Subsections (7B) to (7F) apply to a sale of section 1020B products on a licensed market, during a deferred settlement trading period, in relation to a public offer.

(7B) A person must only, in this jurisdiction, sell section 1020B products to a buyer on a licensed market during a deferred settlement trading period if, at the time of the sale:

(a) the person has or, if the person is selling on behalf of another person, that other person has; or
(b) the person believes on reasonable grounds that the person has or, if the person is selling on behalf of another person, that other person has;

an entitlement to be issued with or sold the products under or in connection with a public offer. (7C) A person has an entitlement to be issued with section 1020B products under or in connection with a public offer if: (a) before the commencement of the deferred settlement trading period: (i) the products are offered for issue under a prospectus, pathfinder prospectus or Product Disclosure Statement (each the offer document) in connection with either: (A) the proposed listing of a listing body or listing scheme; or (B) the proposed admission to quotation of the products in relation to a listed corporation; and (ii) the person made an application, including payment of (or an agreement to pay) application monies, to acquire the products from the listing body (or the responsible entity of the listing scheme) or the listed corporation, under or in connection with the offer document; and (b) the products are to be issued to applicants under the offer document subject only to all or any of the following: (i) completion of any agreement between the listing body (or the responsible entity of the listing scheme) and underwriters or other participants involved in the proposed listing in accordance with its terms, as disclosed in the offer document; (ii) completion of any corporate restructure, or corporate transaction (including acquisitions or divestments), by the listing body (or the responsible entity of the listing scheme) or a related body corporate, as disclosed in the offer document; (iii) the decision of the listing body (or responsible entity of the listing scheme) or listed corporation to issue the products to applicants under the offer document. (7D) A person has an entitlement to be sold section 1020B products under or in connection with a public offer if:

(a) before the commencement of the deferred settlement trading period:

(i) the products are offered for sale by a person (the sale offeror) under a prospectus, pathfinder prospectus or Product Disclosure Statement (each the offer document) in connection with the proposed listing of a listing body or listing scheme; and

(ii) the listing body (or the responsible entity of the listing scheme) makes an offer of section 1020B products for issue under the offer document that are in the same class as the products offered by the sale offeror; and

(iii) the person made an application, including payment of (or an agreement to pay) application monies, to acquire the products from the sale offeror under or in connection with the offer document; and (b) the products are to be sold by the sale offeror to applicants under the offer document subject only to all or any of the following as applicable:

(i) completion of any agreement between the listing body (or the responsible entity of the listing scheme) and underwriters or other participants involved in the proposed listing in accordance with its terms, as disclosed in the offer document;

(ii) completion of any corporate restructure, or corporate transaction (including acquisitions or divestments), by the listing body (or the responsible entity of the listing scheme) or a related body corporate, as disclosed in the offer document;

(iii) completion of the transfer of the products to the sale offeror, as disclosed in the offer document;

(iv) the sale offeror’s decision to transfer the products to applicants under the offer document;

(v) all or any of the matters specified in paragraphs (4)(a), (b) or (c); or

(7E) Subsections (2) and (7B) do not apply in relation to a sale of section 1020B products on a licensed market during a deferred settlement trading period: (a) by a person who, during the deferred settlement trading period but before the time of the sale, has entered into a contract on the market to buy the products; or (b) by a person selling on behalf of the person mentioned in paragraph (a) in the circumstances covered by that paragraph. (7F) For the purposes of subsections (7A) to (7E): (a) nothing in those subsections limits the generality of anything else in any of them; (b) deferred settlement trading arrangements, in relation to a public offer of section 1020B products, means arrangements determined by the operator of a declared financial market operated in this jurisdiction in accordance with the operating rules of the financial market, under which the trading of section 1020B products in relation to the public offer may be conditional and the settlement of sales of those products is deferred according to a timetable published by the operator. deferred settlement trading period, in relation to a public offer, means a period determined by the operator of a declared financial market operated in this jurisdiction in accordance with the operating rules of the financial market, during which deferred settlement trading arrangements apply in relation to the public offer. listing body means a body corporate that is seeking to become a listed corporation. listing scheme means a registered scheme that is seeking to become a listed registered scheme. pathfinder prospectus means a draft prospectus sent to a person in the circumstances covered by subsection 734(9). public offer means: (a) a proposed issue or sale of section 1020B products in relation to a proposed listing of a listing body or listing scheme on a declared financial market operated in this jurisdiction; or (b) a proposed issue of section 1020B products in relation to a proposed admission to quotation of the products in relation to a listed corporation or a listed registered scheme. Corporate actions—deferred settlement trading arrangements

(7G) Subsections (7H) to (7J) apply to a sale of section 1020B products on a licensed market, during a deferred settlement trading period, in relation to a corporate action.

(7H) A person must only, in this jurisdiction, sell section 1020B products to a buyer on a licensed market during a deferred settlement trading period if, at the time of the sale:

(a) the person is or, if the person is selling on behalf of another person, that other person is; or

(b) the person believes on reasonable grounds that the person is or, if the person is selling on behalf of another person, that other person is;

in a class of persons who, because such persons hold financial products of a particular class, have an entitlement to be issued with or transferred the section 1020B products under or in connection with the corporate action.

(7I) Subsections (2) and (7H) do not apply in relation to a sale of section 1020B products on a licensed market during a deferred settlement trading period: (a) by a person who, during the deferred settlement trading period but before the time of the sale, has entered into a contract on the market to buy the products; or (b) by a person selling on behalf of the person mentioned in paragraph (a) in the circumstances covered by that paragraph.

(7J) For the purposes of subsections (7G) to (7I):

corporate action means a proposed issue of section 1020B products under or in connection with: (a) a compromise or arrangement under Part 5.1; (b) a rights issue; (c) a dividend or distribution reinvestment plan; (d) a bonus issue; (e) a conversion of convertible notes or convertible securities; (f) a conversion of shares under section 254H. deferred settlement trading arrangements, in relation to a corporate action, means arrangements determined by the operator of a declared financial market operated in this jurisdiction in accordance with the operating rules of the financial market, under which the settlement of sales of section 1020B products in relation to the corporate action is deferred according to a timetable published by the operator. deferred settlement trading period, in relation to a corporate action, means a period determined by the operator of a declared financial market operated in this jurisdiction in accordance with the operating rules of the financial market, during which deferred settlement trading arrangements apply in relation to the corporate action.

12 Initial public offers: Sale offers through special purpose vehicles

(1) A body (the special purpose body) does not have to comply with subsection 1020B(2) of the Act in relation to a sale of shares in a body (the listing body) by the special purpose body where all of the following are satisfied:

(a) the sale of the shares is made under a prospectus or pathfinder prospectus or both in connection with the proposed listing of the listing body on a declared financial market operated in this jurisdiction;

(b) at the time of the sale, an agreement exists between the special purpose body and a person (the selling shareholder) who has a presently exercisable and unconditional right to vest the shares in a buyer;

(c) under the agreement the selling shareholder agrees to sell the shares to the special purpose body (or its nominee) and the special purpose body agrees to purchase (or agrees to procure its nominee to purchase) the shares from the selling shareholder, on the condition that the listing body is included in the official list of the financial market and the shares are admitted to quotation on that market;

(d) at the time of the sale, the special purpose body is not selling the shares on behalf of the selling shareholder;

(e) the listing body makes offers to issue shares which are in the same class as the shares offered for sale by the special purpose body, under either:

(i) if the special purpose body is selling the shares under a prospectus (whether or not it is also selling the shares under a pathfinder prospectus)—the prospectus; or

(ii) if the special purpose body is selling the shares under a pathfinder prospectus (and not also under a prospectus)—a prospectus.

(2) In subsection (1):

pathfinder prospectus means a draft prospectus sent to a person in the circumstances covered by subsection 734(9) of the Act.

Part 4—Exemptions from short selling reporting

13 Market makers: exchange traded funds and specified structured products

(1) An ETP market maker does not have to comply with subsection 1020AB(3) of the Act to the extent it requires the ETP market maker to give the particulars specified in paragraphs 7.9.100(1)(a) to (c) of the Regulations.

(2) Subsection (1) applies in relation to a sale of:

(a) interests in, or securities of, an exchange traded fund; or

(b) securities that are specified structured products;

by the ETP market maker in the course of making a market in those interests or securities on a declared financial market operated in this jurisdiction.

(3) In subsections (1) and (2):

exchange traded fund (or ETF) has the meaning given by subsection 1020B(4D) of the Act.

ETP has the meaning given by subsection 1020B(4D) of the Act.

ETP market maker has the meaning given by subsection 1020B(4D) of the Act.

specified structured product has the meaning given by subsection 1020B(4D) of the Act.

Note: Section 5 of this instrument notionally inserts subsection 1020B(4D) of the Act.

14 Market makers: bona fide hedging

(1) A market maker does not have to comply with subsection 1020AB(3) of the Act to the extent it requires the market maker to give the particulars specified in paragraphs 7.9.100(1)(a) to (c) of the Regulations.

(2) Subsection (1) applies in relation to a sale of a security (the shorted product) or a managed investment product (the shorted product) by the market maker where both of the following are satisfied:

  (a) the market maker has issued, acquired or disposed of a financial product (the hedged product), or has agreed to issue, acquire or dispose of a financial product (the hedged product), in the course of making a market for the hedged product; and
(b) the sale of the shorted product is a bona fide transaction to manage, avoid or limit the financial consequences of the dealing or proposed dealing mentioned in paragraph (a).

(3) In this section:

market maker has the meaning given by subsection 1020B(5J).

Note: Section 6 of this instrument notionally inserts subsection 1020B(5J) of the Act.

15 Low volume and low value short positions

(1) A seller with a short position in relation to a security or managed investment product that does not exceed the value limit and the volume limit on a day does not have to comply with the following provisions in relation to the short position:

(a) section 1020AB of the Act to the extent that it requires the seller to give the particulars specified in paragraph 7.9.100(1)(d) of the Regulations; or

(b) regulation 7.9.100A of the Regulations.

Note: But for this section, particulars of a short position to which these regulations apply would need to be given to ASIC.

Note: (2) In this section:

Note: value limit has the meaning given by subsection 1020B(1) of the Act.

volume limit has the meaning given by subsection 1020B(1) of the Act.

Note: Section 16 of this instrument notionally inserts definitions of value limit and volume limit into subsection 1020B(1) of the Act.

Part 5—Definitional and other changes

16 Definitional changes

Part 7.9 of the Act applies in relation to section 1020B products as if subsection 1020B(1) were modified or varied by inserting the following definitions in the appropriate alphabetical order:

global end calendar time, in relation to a person’s short position, means 11:59 pm on the trading day in the location of the person (or another person within the same corporate group) to whom the transaction giving rise to the short position is accounted for in the balance sheet of the person (or the other person).

nominated time, in relation to a person’s short position, means:

(a) if an opt-out nomination is in force—the global end calendar time;

(b) otherwise—7 pm in Sydney, New South Wales.

opt-out nomination:

(a) an opt-out nomination, in relation to a nominated time for a person’s short position, is in force from a specified date if both of the following apply:

(i) the person has given a written notice to ASIC specifying that the person will be using the global end calendar time from the specified date, provided the specified date is at least 30 days after the date of giving the notice;

(ii) ASIC has not notified the person within 30 days after the date of giving the notice that ASIC objects;

(b) an opt-out nomination, in relation to a nominated time for a person’s short position, ceases to be in force from a specified date if both of the following apply:

(i) the person has given a written notice to ASIC specifying that the person will not be using the global end calendar time from the specified date, provided the specified date is at least 30 days after the date of giving the notice;

(ii) ASIC has not notified the person within 30 days after the date of giving the notice that ASIC objects.

Note: A person in relation to whom an opt-out nomination has ceased to be in force from a specified date under paragraph (b) may give a further written notice under paragraph (a).

reporting day has the meaning given by regulations made for the purposes of Division 5B.

securities lending arrangement has the meaning given by subsection 1020AA(1).

short position has the meaning given by regulations made for the purposes of Division 5B.

value limit: the value limit, in relation to a person for a security or managed investment product that is able to be traded on a financial market, is not exceeded on a day if:

A x B

does not exceed $100,000 where:

A = the person’s short position in relation to the security or product as at the nominated time.

B = either:

(a) the last sale price for the security or product on the financial market on the day (or, if there is no such price on that day, the last sale price on the financial market); or
(b) the price determined and published by the operator of the market after the close of trading for the day as the value of the security or product on the day.

volume limit: the volume limit, in relation to a person for a security or managed investment product that is able to be traded on a financial market, is not exceeded on a day if:

A x 100

does not exceed 0.01 where:

A = the person’s short position in relation to the security or product as at the nominated time.

B = the total quantity of securities or products in the same class of securities or products on the day.

17 Short position reporting and short sale transaction reporting

(1) Part 7.9 of the Act applies in relation to section 1020B products as if Division 15 of Part 7.9 of the Regulations were modified or varied as follows:

(a) in subregulation 7.9.99(1) omit the definition of reporting day, substitute:

“reporting day, in relation to a short position, means a day that a licensed market that has admitted to quotation the section 1020B product is open for trading.”;

(b) omit subregulation 7.9.99(2) (excluding the heading), substitute:

“(2) In this Division, a short position is a position in relation to a section 1020B product in a listed entity where the quantity of the product which a person, acting in a particular capacity, has is less than the quantity of the product which the person, acting in the same capacity, has an obligation to deliver.

Note:

Note: A person may have more than one position in relation to the product on a particular day. For example, a person will have two positions in relation to the product if the person, acting in a particular capacity, has a position and the person, acting in a different capacity, also has a position.

”;

“(aa) the person holds the product on behalf of another person except where that other person has the sole discretion to decide whether the product will be sold; or (b) another person is holding the product on the person’s behalf but only where the person has the sole discretion to decide whether the product will be sold; or”;

(d) omit paragraph 7.9.99(4)(b), substitute:

“(b) has a contingent or non-contingent obligation to vest title in a lender under a securities lending arrangement; or”;

(e) after subregulation 7.9.99(4) insert:

“(4A) In subregulation (2), the person has the product or has an obligation to deliver the product only if the person is acting in one or more of the following capacities: (a) the person is acting on their own behalf; or (b) the person is acting on behalf of another person except where that other person has the sole discretion to decide whether the product will be sold; or (c) another person is acting on behalf of the person but only where the person has the sole discretion to decide whether the product will be sold. (4B) For the purposes of subregulation (2): (a) subject to paragraph (b), the capacities referred to in each of the paragraphs in subregulation (4A) are taken to be separate capacities; (b) where a person is acting on their own behalf under paragraph (4A)(a) and another person is acting on the person’s behalf under paragraph (4A)(c), the person is taken to be acting in the same capacity; and (c) in paragraph (4A)(b), where a person is acting on behalf of a person under an arrangement and is acting on behalf of another person under a different arrangement, the person is taken to be acting in a different capacity for each arrangement.”;

(f) omit subregulation 7.9.99(5) (excluding the heading), substitute:

“(5) Unless the contrary intention appears, a reference in this Division to a time is a reference to the legal time in Sydney, New South Wales.”;

(g) omit paragraph 7.9.100(1)(d), substitute:

“(d) the seller’s short position as at:

  (i) where the nominated time is, or corresponds to a time that is, on or before 11:59 pm in Sydney, New South Wales—the nominated time 3 reporting days before the day the particulars must be given under subregulation (4); and
  (ii) otherwise—the nominated time 2 reporting days before the day the particulars must be given under subregulation (4).”;

(h) after subregulation 7.9.100(1) insert:

“(1A) For the purposes of paragraph (1)(d), the short position in relation to a section 1020B product is to be calculated by reference to both of the following: (a) the section 1020B product for which the seller has a presently exercisable and unconditional right to vest in the buyer under a securities lending arrangement; (b) the section 1020B product for which the seller does not have a presently exercisable and unconditional right to vest in a buyer but who does not have to comply with subsection 1020B(2) of the Act in relation to the sale.”;

(i) in subregulation 7.9.102(1A) after “under section 1020AB of the Act” (twice occurring) insert “(or in accordance with a legislative instrument made under section 1020F of the Act)”;

(2) Part 7.9 of the Act applies in relation to section 1020B products as if section 1020AA were modified or varied by, after subsection (4), inserting:

“(5) For the purposes of applying this Division to a sale of a section 1020B product that is a CGS depository interest, a reference to a listed entity or a listed product is to be read as if there were a listed entity to which that product relates.”;

(3) Part 7.9 of the Act applies in relation to section 1020B products as if section 1020AB were modified or varied by omitting paragraph (3)(a) and substituting:

“(a) give the entity mentioned in subsection (4) particulars specified in the regulations in relation to:
(i) the circumstances mentioned in paragraphs (1)(a), (b) and (c); or
(ii) the sale of a section 1020B product for which the seller does not have a presently exercisable and unconditional right to vest in a buyer but who does not have to comply with subsection 1020B(2) in relation to the sale; and”.

Endnotes

Endnote 1—About the endnotes

Note: The endnotes provide information about this compilation and the compiled law.

Note: The following endnotes are included in every compilation:

Note: Endnote 1—About the endnotes

Note: Endnote 2—Abbreviation key

Note: Endnote 3—Legislation history

Note: Endnote 4—Amendment history

Note: Abbreviation key—Endnote 2

Note: The abbreviation key sets out abbreviations that may be used in the endnotes.

Note: Legislation history and amendment history—Endnotes 3 and 4

Note: Amending laws are annotated in the legislation history and amendment history.

Note: The legislation history in endnote 3 provides information about each law that has amended (or will amend) the compiled law. The information includes commencement details for amending laws and details of any application, saving or transitional provisions that are not included in this compilation.

Note: The amendment history in endnote 4 provides information about amendments at the provision (generally section or equivalent) level. It also includes information about any provision of the compiled law that has been repealed in accordance with a provision of the law.

Note: Misdescribed amendments

Note: A misdescribed amendment is an amendment that does not accurately describe how an amendment is to be made. If, despite the misdescription, the amendment can be given effect as intended, then the misdescribed amendment can be incorporated through an editorial change made under section 15V of the Legislation Act 2003.

Note: If a misdescribed amendment cannot be given effect as intended, the amendment is not incorporated and “(md not incorp)” is added to the amendment history.

Endnote 2—Abbreviation key

ad = added or inserted	orig = original
am = amended	p = page(s)
amdt = amendment	para = paragraph(s)/subparagraph(s)
C[x] = Compilation No. x	/sub‑subparagraph(s)
ch = Chapter(s)	pres = present
cl = clause(s)	prev = previous
cont. = continued	(prev…) = previously
def = definition(s)	pt = Part(s)
Dict = Dictionary	r = regulation(s)/Court rule(s)
disallowed = disallowed by Parliament	reloc = relocated
div = Division(s)	renum = renumbered
exp = expires/expired or ceases/ceased to have	rep = repealed
effect	rs = repealed and substituted
gaz = gazette	s = section(s)/subsection(s)
LA = Legislation Act 2003	/rule(s)/subrule(s)/order(s)/suborder(s)
LIA = Legislative Instruments Act 2003	sch = Schedule(s)
(md not incorp) = misdescribed amendment	SLI = Select Legislative Instrument
cannot be given effect	SR = Statutory Rules
mod = modified/modification	sub ch = Sub‑Chapter(s)
No. = Number(s)	sub div = Subdivision(s)
Ord = Ordinance	sub pt = Subpart(s)
	underlining = whole or part not
	commenced or to be commenced

Endnote 3—Legislation history

Name	Registration	Commencement	Application, saving and transitional provisions
ASIC Corporations (Short Selling) Instrument 2018/745 (F2018L01356)	27/09/2018	28/09/2018	-
ASIC Corporations (Amendment) Instrument 2019/784 (F2019L01206)	17/09/2019	18/09/2019	-
ASIC Corporations (Amendment) Instrument 2021/754 (F2021L01334)	29/09/2021	30/09/2021	-
ASIC Corporations (Short Selling) Amendment Instrument 2022/968 (F2022L01582)	06/12/2022	07/12/2022	-
ASIC Corporations (Amendment) Instrument 2023/24 (F2023L00059)	30/01/2023	31/01/2023	-
ASIC Corporations (Amendment) Instrument 2026/24 (F2026L00061)	02/02/2026	03/02/2026	-

Endnote 4—Amendment history

Provision affected	How affected
Section 2	rep. s48D LA
Section 5 (heading)	am.2026/24, Sch 1, item [1]
Section 5 (notional paragraph 1020B(4A)(b))	rs. 2019/784am. 2022/968
Section 5 (notional subsection 1020B(4A))	rs.2026/24, Sch 1, item [2]
Section 5 (notional subsection 1020B(4B))	am.2026/24, Sch 1, item [3]-[6]
Section 5 (notional subsection 1020B(4C))	am.2026/24, Sch 1, item [7]-[8]
Section 5 (notional paragraph 1020B(4D)(a)) definition of exchange traded fund	am.2026/24, Sch 1, item [9]-[12]
Section 5 (notional paragraph 1020B(4D)(a)) definition of ETP (or exchange traded product)	ad.2026/24, Sch 1, item [13]
Section 5 (notional paragraph 1020B(4D)(a)), definition of ETF market maker	am. 2022/968rs.2026/24, Sch 1, item [14]
Section 5 (notional paragraph 1020B(4D)(a)) definition of managed fund	rep.2026/24, Sch 1, item [15]
Section 5 (notional paragraph 1020B(4D)(a)) definition of notice of cessation	am.2026.24, Sch 1, item [16]-[17]
Section 5 (notional paragraph 1020B(4D)(a)) definition of notice of exclusion	am.2026/24, Sch 1, item [16]-[17]
Section 5 (notional paragraph 1020B(4D)(a)) definition of notice of reliance	am.2026/24, Sch 1, item [16] and [18]-[20]
Section 5 (notional paragraph 1020B(4D)(a)) definition of notice of suspension or cancellation	rs.2026/24, Sch 1, item [21]
Section 5 (notional paragraph 1020B(4D)(a)) definition of precious metal	ad.2026/24, Sch 1, item [22]
Section 5 (notional paragraph 1020B(4D)(a)) definition of settlement failure limit	am.2026/24, Sch 1, item [23]
Section 5 (notional paragraph 1020B(4D)(a)) definition of settlement failure notice	am.2026/24, Sch 1, item [23]
Section 5 (notional paragraph 1020B(4D)(a)) definition of specified structured product	ad.2026/24, Sch 1, item [24]
Section 5 (notional paragraph 1020B(4D)(b))	am.2022/968am.2026/24, Sch 1, item [25]
Section 6 (notional subparagraph 1020B(5A)(c)(ii))	am.2022/968
Section 6 (notional subparagraph 1020B(5A)(c)(iii))	ad.2022/968am.2026/24, Sch 1, item [26]-[27]
Section 6 (notional paragraph 1020B(5A)(c)) note	rs.2026/24, Sch 1, item [28]
Section 6 (notional paragraph 1020B(5B)(b))	am.2022/968rs.2026/24, Sch 1, item [29]
Section 6 (notional subsection 1020B(5C))	am.2022/968
Section 6 (notional paragraph 1020B(5C)(d))	am.2022/968rs.2026/24, Sch 1, item [30]
Section 6 (notional subsection 1020B(5J))	ad.2022/968
Section 6 (notional subsection 1020B(5J)) definition of approved ETF	rep.2026/24, Sch 1, item [31]
Section 6 (notional subsection 1020B(5J)) definition of approved ETP	ad.2026/24, Sch 1, item [32]
Section 6 (notional subsection 1020B(5J)) definition of approved ETO	am.2026/24, Sch 1, item [33]
Section 6 (notional subsection 1020B(5J)) definition of ETF	rep.2026/24, Sch 1, item [34]
Section 6 (notional subsection 1020B(5J)) definition of ETP	ad.2026/24, Sch 1, item [35]
Subsection 8(4) (definition of exchange traded option)	am.2022/968
Subsection 10(2)	am.2026/24, Sch 1, item [36]
Subsection 10(2), note	rs.2026/24, Sch 1, item [37]
Section 11 (notional subsection 1020B(7B) note	am.2022/968
Section 11 (notional subparagraph 1020B(7C)(a)(ii))	am.2022/968
Section 11 (notional subparagraph 1020B(7D)(a)(iii))	am.2022/968
Section 11 (notional paragraph 1020B(7F)(b)) definition of deferred settlement trading arrangements	am.2026/24, Sch 1, item [38]-[40]
Section 11 (notional paragraph 1020B(7F)(b)) definition of deferred settlement trading period	am.2026/24, Sch 1, item [38]-[39]
Section 11 (notional paragraph 1020B(7F)(b)) definition of listed corporation	rep.2026/24, Sch 1, item [41]
Section 11 (notional paragraph 1020B(7F)(b)) definition of listing body	rs.2026/24, Sch 1, item [42]
Section 11 (notional paragraph 1020B(7F)(b)) definition of listing scheme	rs. 2026/24, Sch 1, item [43]
Section 11 (notional paragraph 1020B(7F)(b)) paragraph (b) of definition of public offer	ad.2022/968
Section 11 (notional paragraph 1020B(7F)(b)), definition of public offer	am.2026/24, Sch 1, item [44]-[45]
Section 11 (notional paragraph 1020B(7H)(b))	am. 2022/968 (Sch 1 item 15 md not incorp)
Section 11 (notional subsection 1020B(7H))	rs.2023/24
Section 11 (notional subsection 1020B(7H) note)	am.2022/968
Section 11 (notional subsection 1020B(7J)) definition of deferred settlement trading arrangements	am.2026/24, Sch 1, item [46]-[48]
Section 11 (notional subsection 1020B(7J)) definition of deferred settlement trading period	am.2026/24, Sch 1, item [46]-[47]
Paragraph 12(1)(a)	am.2026/24, Sch 1, item [49]
Section 13 (heading)	am.2026/24, Sch 1, item [50]
Subsection 13(1)	am.2026/24, Sch 1, item [51]
Subsection 13(2)	rs.2019/784am.2022/968rs.2026/24, Sch 1, item [52]
Subsection 13(3), definition of ETF market maker	am.2026/24, Sch 1, item [53]
Subsection 13(3) definition of ETP	ad.2026/24, Sch 1, item [54]
Subsection 13(3) definition of specified structured products	ad.2026/24, Sch 1, item [54]
Subsection 13(3) definition of managed fund	rep.2026/24, Sch 1, item [55]
Part 6	rep.2021/754

1 ASIC Corporations (Short Selling) Instrument 2018/745

ASIC Corporations (Short Selling) Instrument 2018/745

made under subsection 1020F(1) of the Corporations Act 2001

Compilation No.5

Compilation date: 03 February 2026

Includes amendments up to: ASIC Corporations (Amendment) Instrument 2026/24 (F2026L00061)

About this compilation

This compilation

This is a compilation of the ASIC Corporations (Short Selling) Instrument 2018/745 that shows the text of the law as amended and in force on 03/02/2026 (the compilation date).

The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.

Uncommenced amendments

Application, saving and transitional provisions

Modifications

Self-repealing provisions‑repealing provisions

If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.

Contents

Self-repealing provisions‑repealing provisions

Part 1—Preliminary

1 Name of legislative instrument

3 Authority

4 Definitions

Part 2—Short selling exemptions: market participants

5 Market makers: exchange traded funds and specified structured products

6 Market makers: Bona fide hedging

The instrument operates through a set of conceptually distinct mechanisms: exemptions tied to market roles and instruments, procedural conditions (notice, recordkeeping, acquisition), quantitative thresholds for reporting carve‑outs, and timing/definition adjustments that alter how positions are measured and reported.

Exemptions by role and product

ETP market maker exemption (notional 1020B(4A)-(4D)) targets persons who make markets in exchange traded funds and certain structured products, conditional on fund operators permitting applications and redemptions and the market maker acting on a declared financial market (s 5(4A)(c)-(d)). The instrument defines “ETP”, “ETF”, “ETP market maker” and “specified structured product” in 1020B(4D) (s 5(4D)). The exemption is role‑specific and market‑specific, requiring an Australian financial services licence or exemption and market operator appointment/arrangement (s 5(4D), ETP market maker definition).
Market maker bona fide hedging exemption (notional 1020B(5A)-(5J)) covers market makers managing risks from making a market in a hedged product (s 6(5A)-(5C)). It limits the types of shorted products covered (S&P/ASX 300 constituents, STW, or approved ETPs) and requires, by sale day end, acquisition or arrangements enabling unconditional vesting (s 6(5C)).
Exchange traded options and obtainability rules (s 7-8). Sales effected by exercising exchange traded options are singled out (1020B(6A)-(6E) inserted by s 7). Section 8 provides a broader treatment of sales performed by issuing or selling exchange traded options and supplies an arithmetic test (FPIO - FPSO - PS) to calculate the number of section 1020B products “able to be obtained” by exercising options at the time of sale (s 8(3)). The formula introduces three variables: Financial Products Immediately Obtainable (FPIO), Financial Products Subject to Options (FPSO), and Previously Sold unobtained products (PS).
Specialised exemptions for debentures and deferred purchase agreements (s 9-10). Clearing and settlement participants selling eligible debentures may rely on a belief that arrangements can be put in place to vest by delivery time (s 9). Deferred purchase agreements (s 10) are carved out where the contract matures at least 12 months out and delivery is derived from other financial products, an index or similar assets.

Procedural and reporting modifications

Notices to ASIC: ETP market makers must give a notice of reliance before first relying on the ETP market maker exemption, and must give notices of settlement failures (if settlement failure limit exceeded), suspension or cancellation notices from market operators or fund operators, and a notice of cessation (s 5(4B)(a),(d),(e),(f),(g)).
Recordkeeping and acquisition conditions: ETP market makers must keep a pre‑sale record that the proposed sale will be a short sale and preserve that record for 12 months (s 5(4B)(b)); they must acquire or apply for sufficient financial products to enable delivery before the time for delivery (s 5(4B)(c)). Market makers relying on bona fide hedging must do one of the enumerated actions by the end of sale day (s 6(5C)).
Quantitative exemptions and thresholds: The small‑position reporting exemption uses the term value limit (A × B ≤ $100,000) and a volume limit (A × 100 / B ≤ 0.01) with A being the short position as at the nominated time and B being price or total quantity depending on the formula (s 16, inserted definitions). ETP market makers also have a “settlement failure limit” set at 1% of volume or value of sales in a reporting period that failed to settle within market rules (s 5(4D) settlement failure limit).
Timing and nominated time changes: The default nominated time for measuring short positions is 7 pm Sydney time unless an opt‑out nomination is in force; opt‑out allows use of “global end calendar time” (11:59 pm local trading day where accounting occurs) subject to written notice and a 30‑day ASIC objection window (s 16).

Modifications to the regulations and application mechanics

The instrument changes the Regulations’ Division 15 provisions for reporting day, short position definitions and capacities (s 17(1)(a)-(i)). Reporting day becomes “a day that a licensed market that has admitted to quotation the section 1020B product is open for trading” (s 17(1)(a)). It explicitly treats positions in different capacities as separate capacities unless a person’s own acting and another acting on the person’s behalf combine (s 17(1)(e)-(h)).

Together, these changes recalibrate the operational perimeter of the short selling prohibition and reporting regime in Part 7.9 by distinguishing market functions, instrument types, and transaction mechanics. Each exemption is conditional on compliance with the procedural steps and timing requirements that the instrument inserts; the instrument therefore changes legal exposure mostly by changing scope conditional on operational behaviour.

The instrument targets a narrow set of market participants, market arrangements and transactions rather than imposing new obligations on all market users. The principal affected actors are:

ETP market makers (defined in s 5(4D)). These are persons holding an Australian financial services licence covering market making (or exempt from that licence requirement) who have either an agreement with the market operator or have demonstrated appointment by the scheme/company operator. The ETP market maker definition ties the exemption to persons making markets in interests/securities of exchange traded funds or certain specified structured products where such products trade on a declared financial market (s 5(4D) definitions).
Market makers generally. The bona fide hedging exemption in s 6(5A)-(5J) applies to “market makers” defined in 1020B(5J) as persons holding an AFS licence for market making (or exempt) in relation to the relevant financial product. The exemption is relevant to market makers dealing in S&P/ASX 300 constituents, STW, and approved ETPs (s 6(5A)(c)).
Option holders and issuers of exchange traded options. Section 7 inserts exemptions and reporting requirements for option holders whose sale is effected by exercise of exchange traded options (1020B(6A)). Section 8 applies to persons who issue or sell exchange traded options on a market and to sellers of unobtained products who can obtain products by exercising options; it therefore affects option writers and traders that use options to cover potential deliveries (s 8(1)-(3)).
Clearing and settlement participants and users of CS facility licensee or RITS (s 9). Persons entitled to use clearing and settlement facilities who sell “eligible debentures” (government bonds or corporate debentures/bonds where on‑issue exceeds $100,000,000) in principal capacity are affected by the debenture exemption (s 9(1)-(2)).
Sellers under deferred purchase agreements (s 10). Parties to long‑dated delivery agreements (maturity at least 12 months) where delivery products’ number/value is determined by indices, assets, rates, commodities etc are affected; these sellers need not comply with subsection 1020B(2) for such sales (s 10(1)).
Participants in deferred settlement trading relating to public offers and corporate actions (s 11). Sellers during deferred settlement trading periods on licensed markets are affected, with entitlement tests determining permitted sales (s 11(7A)-(7J)). Operators of declared financial markets are indirectly affected because deferred settlement trading arrangements and periods are determined in accordance with operating rules (s 11(7F)(b)).
Special purpose vehicles involved in sale offers through SPVs for IPOs (s 12). A SPV that has an agreement with a selling shareholder who has a presently exercisable and unconditional right to vest shares and that is not selling on behalf of the shareholder at time of sale may rely on the exemption (s 12(1)(a)-(d)).
Sellers with small short positions. Any seller whose short position in a security or managed investment product does not exceed the instrument’s value and volume limits on a day is relieved from giving certain particulars to ASIC (s 15). The applicable value and volume limits are defined by formulas inserted into 1020B(1) (s 16).
Market operators and scheme/company operators. The instrument depends on actions and statements by market operators and fund or company operators (for example allowing applications and redemptions per s 5(4A)(c) and s 5(4D)(c)-(d)), and on the operator’s delegated functions (deferred settlement arrangements and timetable in s 11(7F)(b)). Market operators therefore play a decision role in enabling or constraining exemptions.
ASIC. The regulator receives notices, settlement failure reports, notices of exclusion/cessation, particulars of short positions in specified forms and timeframes, and has a 30‑day window to object to opt‑out nominations (s 5(4B)(a), s 5(4B)(d)-(g), s 6(5D)-(5F), s 16 opt‑out nomination). ASIC therefore is a recipient and checkpoint for reliance on the instrument’s carve‑outs.

Who pays and who bears compliance costs

Primary compliance costs fall on ETP market makers and market makers relying on bona fide hedging, because the instrument conditions the exemptions on pre‑reliance notices, record retention (12 months, s 5(4B)(b)), settlement and acquisition steps (s 5(4B)(c); s 6(5C)), and reporting (s 5(4B)(d)-(g); s 6(5E)-(5F)). Option holders and option writers may bear transactional and reporting costs in meeting the timing rules under s 7 and s 8. Clearing participants and SPVs will incur legal and operational checks to ensure eligibility for their respective exemptions.
Market operators bear operational costs in administering deferred settlement trading arrangements and publishing timetables; the instrument ties many permissions to operator‑determined arrangements (s 11(7F)(b), s 11(7J)).
ASIC bears monitoring and processing costs because of the newly specified notice windows, reporting periods and opt‑out notifications that it must receive and may object to (s 5(4B)(a); s 16 opt‑out nomination).

Geographical and jurisdictional reach

The instrument repeatedly ties rights and duties to operations “in this jurisdiction” and to declared financial markets operated in this jurisdiction (for example s 5(4A)(d), s 5(4D)). It also introduces a cross‑border timing concept (global end calendar time) relevant to firms that account for transactions in different time zones (s 16 definitions). The opt‑out mechanism allows firms to align nominated time with local accounting closure subject to ASIC objection (s 16).

In summary, the instrument reallocates legal risk and procedural duties primarily to market makers, ETP market makers, options market participants, clearing participants, SPVs in IPOs and sellers in deferred settlement contexts, with ASIC and market operators playing decision and oversight roles.

The instrument creates conditional rights to short sell (exemptions) and attaches duties and timing obligations to preserve those rights. The principal duties and rights are set out below with section references.

Rights to sell without complying with s 1020B(2) of the Corporations Act

ETP market maker exemption (s 5(4A)): An ETP market maker may short sell interests in or securities of an exchange traded fund or specified structured products without complying with subsection 1020B(2) provided (i) the sale occurs on a day the fund/company allows applications and redemptions in the same class, and (ii) the sale is in the course of making a market on a declared financial market in this jurisdiction (s 5(4A)(c)-(d)). The right is subject to not being excluded by ASIC (s 5(4C)).
Market maker bona fide hedging exemption (s 6(5A)): A market maker may short sell where the sale is a bona fide transaction to manage the financial consequences of dealing with a hedged product created, acquired or disposed of in the course of making a market. The exemption is limited to specified products (S&P/ASX 300 constituents, STW or approved ETPs) (s 6(5A)(a)-(c)).
Exchange traded options exercise sales (s 7(6A)): An option holder that holds an option registered with ASX Clear may effect a sale that results from exercising the option without complying with s 1020B(2).
Exchange traded options issuance/sale and obtainability (s 8(1)-(3)): Selling by issuing/selling exchange traded options is not subject to s 1020B(2). Sellers of unobtained products need not comply if, at the time of sale, they (or their principal if acting as agent) are able to obtain at least the number of products by exercising exchange traded options, assessed by the FPIO - FPSO - PS formula (s 8(2)-(3)).
Clearing and settlement participants (s 9(1)): Persons entitled to use clearing and settlement facilities do not have to comply with s 1020B(2) when selling eligible debentures as principal if they reasonably believe arrangements can be put in place before delivery so the debentures can be unconditionally vested by delivery time.
Deferred purchase agreements (s 10(1)): A seller under a deferred purchase agreement does not have to comply with s 1020B(2) in relation to the sale, subject to the contract meeting the deferred purchase agreement definition (s 10(2)).
Deferred settlement trading arrangements (s 11(7A)-(7J)): Sales during deferred settlement trading periods in connection with public offers or corporate actions are permitted only where seller has (or reasonably believes they have) an entitlement to be issued or sold products under or in connection with the public offer or corporate action as the instrument defines (s 11(7B)-(7I)).
Special purpose body sales in IPOs (s 12(1)): A SPV that meets the enumerated conditions (agreement with selling shareholder having presently exercisable and unconditional right, SPV not selling on behalf of selling shareholder at time of sale, listing body makes offers in same class) does not have to comply with s 1020B(2).

Duties and procedural conditions attached to the rights

Notices to ASIC: ETP market makers must give a notice of reliance to ASIC before first engaging in conduct in reliance on the ETP market maker exemption (s 5(4B)(a)). They must give a settlement failure notice to ASIC within 28 days after the end of a reporting period if sales in reliance on subsection (4A) during the reporting period exceed the settlement failure limit (s 5(4B)(d)). They must give ASIC copies of market operator or issuer suspension/cancellation notices within 28 days of receipt (s 5(4B)(e)-(f)). They must give a notice of cessation if they stop relying on the exemption (s 5(4B)(g)).
Recordkeeping: ETP market makers must, before making an offer to sell the shorted product, keep a record stating the proposed sale will be a short sale and preserve it for 12 months after last entry (s 5(4B)(b)).
Acquisition or application before delivery: ETP market makers must, as soon as reasonably practicable after the sale but before delivery time, acquire or apply for sufficient products in the same class to enable fulfilment of delivery obligations (s 5(4B)(c)). Market makers relying on bona fide hedging must perform one of several actions by end of sale day to ensure unconditional vesting (s 6(5C)).
Reporting of short positions: Market makers using bona fide hedging must give particulars of short positions to ASIC in the form required, with nominated times and reporting day timing rules (s 6(5E)-(5F)). Option holders exercising options must give similar particulars (s 7(6B)-(6C)). The instrument modifies the timetables and the measurement points for these reports (s 6(5F), s 7(6C), s 17(1)(g)).
Failure notifications: A market maker failing to comply with the end‑of‑sale‑day acquisition requirements in s 6(5C) must notify ASIC in writing by no later than 9 am Sydney on the next business day (s 6(5D)).
Exclusions by ASIC and cessation: ASIC has an exclusion power by notice: if ASIC gives a notice of exclusion to an ETP market maker and does not withdraw it, subsection (4A) does not apply to that market maker for the relevant product (s 5(4C)). ETP market makers must give notice of cessation if they no longer seek to rely on the exemption (s 5(4B)(g)).
Small position reporting relief: Sellers whose short positions do not exceed the instrument’s value and volume limits on a day are relieved from giving certain particulars specified in paragraph 7.9.100(1)(d) of the Regulations and from regulation 7.9.100A relating to small positions (s 15(1)).

Timing and measurement duties

The instrument inserts a nominated time definition into 1020B(1): default 7 pm Sydney unless an opt‑out nomination is in force; global end calendar time is 11:59 pm on the trading day in the person’s location of accounting (s 16). Opt‑out nominations require written notice to ASIC at least 30 days before the specified date and may be objected to by ASIC within 30 days (s 16 opt‑out nomination).
Reporting day is defined in the modified Regulations to mean a day a licensed market that has admitted the product is open for trading (s 17(1)(a)).

Form and content duties

The instrument repeatedly requires particulars to be given to ASIC “in the form required by ASIC” (see s 6(5E); s 7(6B); s 5(4B)(d)-(g)). That gives ASIC discretion to prescribe form and content.

In short, the instrument grants conditional rights to conduct short sales in defined circumstances but anchors those rights to express duties: pre‑reliance and cessation notices, record retention, acquisition or securities lending arrangements to ensure delivery, reporting of short positions on specific time schedules, settlement failure reporting and ASIC‑directed forms. ASIC retains a role to exclude reliance and to receive and process notices.

The instrument itself does not create new criminal offences or civil penalties separate from Part 7.9 of the Corporations Act. Mechanically, it operates by varying how existing duties in Part 7.9 apply to section 1020B products; it therefore changes the scope of what conduct is exempt from the general prohibition in subsection 1020B(2) and what reporting duties are triggered under section 1020AB and the Regulations. Enforcement and penalties consequently remain anchored in the Act and Regulations as they apply to non‑exempt conduct and to failures to comply with reporting duties, rather than being redefined by the instrument.

What the instrument does change that affects enforcement risk

Conditional exemptions as statutory defences: Where the instrument exempts specified conduct from s 1020B(2) (for example s 5(4A) or s 6(5A)), the exemption operates as a modification or variation of the Act so that the conduct is not subject to the prohibition only while the conditions are satisfied. If a person asserts an exemption but fails to comply with the instrument’s conditional duties (for instance, fails to give a required notice of reliance, fails to acquire or apply for sufficient products before delivery, or exceeds settlement failure limits without compliance), their conduct could fall outside the exemption and thus be subject to the s 1020B(2) prohibition and associated enforcement under the Act and Regulations (see s 5(4B)(a)-(c); s 6(5C)-(5D)).
Reporting obligations and late or incorrect reporting: The instrument modifies reporting obligations and creates new reporting duties by reference to ASIC’s required form and by inserting specific timing. Failures to comply with s 1020AB or the modified regulation 7.9.100 particulars (as altered by s 17) remain enforcement points in the Act and Regulations. For example, market makers and option holders must file particular short position particulars by set reporting days and times (s 6(5F); s 7(6C)). Non‑compliance with reporting obligations that are statutory may expose the person to civil or administrative consequences under the Corporations Act or to regulatory action by ASIC.
Notification duties with fixed deadlines: ETP market makers must give settlement failure notices within 28 days after the end of the reporting period (s 5(4B)(d)) and copies of suspension or cancellation notices within 28 days of receipt (s 5(4B)(e)-(f)). Market makers failing to comply with acquisition obligations must notify ASIC by 9 am on the next business day (s 6(5D)). Failure to meet these deadlines could be used by ASIC as evidence of non‑compliance with the conditions of a statutory exemption.
ASIC’s discretionary exclusion/remedial role: ASIC can issue a notice of exclusion to an ETP market maker, which, while unwithdrawn, prevents the market maker from relying on the ETP market maker exemption (s 5(4C)). The instrument thus gives ASIC an administrative lever to restrict reliance at the product or market maker level. Enforcement risk includes the prospect of ASIC exercising its exclusion power or objecting to opt‑out nominations (s 16 opt‑out nomination) if it considers conditions are not met.
Interaction with delegated regulatory form and content: Several duties require particulars “in the form required by ASIC” (s 6(5E); s 7(6B); s 17(1)(i) modifications). Enforcement efficacy therefore depends partly on ASIC’s administrative tools and published forms, and on the accuracy and timeliness of information supplied in that format.

What remains for ASIC to enforce under the Act and Regulations

The instrument does not displace enforcement mechanisms under the Corporations Act for non‑exempt short selling or for false or misleading reporting. The Act’s general enforcement, civil penalty and criminal regimes for contraventions of Part 7.9 (and associated regulations) remain in force for conduct outside the instrument’s carve‑outs or for failures to meet the procedural conditions attached to carve‑outs.

Practical enforcement implications

The instrument shifts enforcement focus from a blanket prohibition to conditional compliance monitoring: regulators will assess whether the conditions (notices, acquisitions, recordkeeping, settlement metrics) are satisfied when determining whether a short sale was lawful. This imposes evidentiary duties on market makers and other relying parties to preserve records and to prove compliance with the procedural conditions that underpin the exemptions.

In sum, penalties and enforcement are not rewritten by the instrument; rather, the instrument changes the circumstances in which existing enforcement provisions apply and creates new procedural compliance points that ASIC can use in enforcement or administrative action.

This instrument operates as a legislative instrument amending the application of Part 7.9 of the Corporations Act 2001 to section 1020B products; therefore interaction with other laws is primarily through the framework of the Act and the Corporations Regulations 2001 (the Regulations). The instrument makes notional insertions into section 1020B and modifies Division 15 of Part 7.9 of the Regulations (s 17). Key interaction points and read‑through effects follow.

Relation to the Corporations Act 2001, Part 7.9 and section 1020B

The instrument is explicitly made under subsection 1020F(1) of the Corporations Act (s 3). It modifies the operation of section 1020B by inserting additional subsections (e.g., 4A, 4B, 5A-5J, 6A-6E, 7A-7J notionally) and by changing how the Regulations’ Division 15 is applied to the Act (s 17). The instrument therefore does not rewrite the Act but changes the Act’s operation in relation to specified products and roles.
Reporting duties remain anchored in section 1020AB and in regulation 7.9.100 et seq; the instrument narrows or exempts certain particulars from subsection 1020AB(3) for ETP market makers and bona fide hedging market makers (s 13-14). It also substitutes definitions and timing rules into 1020B(1) (s 16), which affect how the Act’s reporting provisions are triggered.

Interaction with Corporations Regulations (Division 15)

The instrument varies the Regulations’ Division 15 as it applies to section 1020B products (s 17). It substitutes the definition of reporting day, redefines “short position”, clarifies capacities in which a person is taken to hold products or have obligations to deliver, and modifies time references to Sydney legal time (s 17(1)(a)-(f)). These changes will affect the scope and timing of short position reporting under the Regulations.

Relation to market operator rules and operating rules

Several exemptions hinge on market operator‑determined arrangements and on operating rules of declared financial markets. For example, the ETP market maker exemption requires sales be made “in the course of making a market on a declared financial market operated in this jurisdiction” (s 5(4A)(d)). Deferred settlement trading arrangements and deferred settlement trading periods are “determined by the operator of a declared financial market ... in accordance with the operating rules of the financial market” (s 11(7F)(b) and s 11(7J)). Thus, the instrument defers to market operators’ rulebooks for the mechanics of deferred settlement trading and timelines; operators’ rules therefore interact functionally with the statutory exemptions.

Interaction with securities clearing, settlement and ASX Clear systems

The debenture exemption references entitlement to use clearing and settlement facilities of a CS facility licensee or the Reserve Bank Information and Transfer System (s 9(1)). For exchange traded options, the instrument references options registered with ASX Clear Pty Limited and ASX Clear (Futures) Pty Limited (s 6(5J) definition of ETO; s 8(4) notes). The instrument therefore interacts with the legal and operational frameworks governing clearing and settlement infrastructure.

Relation to other regulatory instruments and ASIC forms

Multiple provisions require particulars “in the form required by ASIC” (s 6(5E); s 7(6B); s 13(1); s 14(1)). This delegates substantive form and some content requirements to ASIC, creating an interaction between this legislative instrument and ASIC’s administrative instruments, guidance and form templates.

Cross‑jurisdictional accounting and timing

The instrument introduces “global end calendar time” tied to the location where a transaction is accounted for in the balance sheet of the person or another person in the same corporate group (s 16). The nominated time may be the global end calendar time if an opt‑out nomination is in force (s 16). This creates a read‑through effect to cross‑border reporting and accounting practices and interacts with firms’ domestic accounting and internal reporting frameworks.

Relation to prospectus and disclosure laws

The deferred settlement and public offer exemptions refer to prospectuses, pathfinder prospectuses and Product Disclosure Statements (s 11(7C)-(7D), s 12(1)(a)). The instrument therefore connects short selling permissions during IPO or public offer processes to the disclosure regime under the Act (prospectus rules). It also refers to pathfinder prospectuses as defined in the Act (s 11(7F)(b), s 12(2)).

No repeal of broader enforcement or penalty regimes

The instrument does not displace the Corporations Act’s enforcement provisions, civil penalty regime, criminal provisions for market misconduct, or ASIC’s supervisory powers. Instead, it narrows the circumstances in which those enforcement tools will apply in relation to the conduct carved out, while leaving the underlying legal framework intact.

In sum, the instrument is structured to operate within the existing Corporations Act and Regulations framework, relying on market operators’ rules and ASIC’s administrative forms to operationalise the exemptions. The principal legal interactions are therefore between the instrument’s conditional exemptions and (a) Part 7.9’s reporting and prohibition architecture, (b) the Regulations’ Division 15 reporting mechanics, (c) market operator and clearing/settlement rules, and (d) ASIC’s forms and oversight.

The compilation provides an itemised amendment history in the endnotes (Endnote 3 and 4) documenting the instrument’s original registration and subsequent amending instruments up to the compilation date. The key legislative milestones recorded are:

Original instrument: ASIC Corporations (Short Selling) Instrument 2018/745, registered 27/09/2018 and commenced 28/09/2018 (Endnote 3).
Amendment instruments: The compilation records a series of amendments with registration and commencement dates, including:
- ASIC Corporations (Amendment) Instrument 2019/784 (registered 17/09/2019, commenced 18/09/2019) (Endnote 3).
- ASIC Corporations (Amendment) Instrument 2021/754 (registered 29/09/2021, commenced 30/09/2021) (Endnote 3).
- ASIC Corporations (Short Selling) Amendment Instrument 2022/968 (registered 06/12/2022, commenced 07/12/2022) (Endnote 3).
- ASIC Corporations (Amendment) Instrument 2023/24 (registered 30/01/2023, commenced 31/01/2023) (Endnote 3).
- ASIC Corporations (Amendment) Instrument 2026/24 (registered 02/02/2026, commenced 03/02/2026) (Endnote 3). The 2026/24 instrument is the most recent amending instrument reflected in the compilation.
The amendment history table in Endnote 4 records provision‑level changes: numerous notional insertions and substitutions into 1020B, and amendments to sections 5-17 of the instrument themselves, with itemised entries describing how each subsection or definition was added, substituted, amended or repealed. Examples from Endnote 4 include:
- Section 5 (heading) and multiple notional paragraphs and subsections being amended or added across instruments including 2019/784, 2022/968 and 2026/24 (Endnote 4 entries).
- Section 6 notional subsections 5A-5J were added or amended across the 2022 and 2026 instruments, including insertions of approved ETPs and approved ETO definitions at various times (Endnote 4).
- Section 11 notional subsections dealing with deferred settlement trading arrangements were added in 2022 and subject to later amendments (Endnote 4).
- Section 16 definitional insertions and Section 17 reporting modifications were introduced and amended across the 2022 and 2026 amending instruments (Endnote 4).
The endnote table records itemised editorial changes (for example “rs” for repealed and substituted entries) and notes when definitions were added, repealed or replaced (Endnote 4). It flags particular items as “md not incorp” where a misdescribed amendment could not be incorporated, indicating editorial tension in the amending process (Endnote 4 entries referencing 2022/968).
The endnotes also note that the compilation includes the text "as amended and in force on 03/02/2026" and that some uncommenced amendments (if any) would be shown in endnotes underlined; the compilation does not reflect uncommenced amendments in the main text (preliminaries of the compilation).

Practical implications of the amendment history

The instrument has been subject to iterative change since enactment in 2018, with substantive additions in 2019, 2021, 2022, 2023 and 2026. The recorded changes include both additions of new exemptions and definitional clarifications (for example, the approved ETP lists in s 6(5J) were added and later amended). Those iterative changes indicate that the exemptions and reporting mechanics have been adjusted over time to add or refine targeted carve‑outs and to align with market developments or policy choices.
The endnote history is the authoritative record of amendments and should be consulted when tracing the provenance of any particular subsection or definitional change, because the instrument’s internal notional insertions (e.g., into 1020B) are represented as editorial modifications rather than separate standalone provisions.

If a practitioner needs to trace the precise change dates or parent instruments for a particular subsection, the endnotes in this compilation provide the registration and commencement dates for each amending instrument (Endnote 3) and itemised changes at the provision level (Endnote 4) which will be necessary for historical compliance assessments or transitional obligation analysis.

The compilation of the instrument provided contains no case law citations, and the endnotes do not record any litigation history specific to this instrument. The document’s endnotes are limited to legislative and amendment history (Endnotes 3 and 4) and do not reference judicial decisions, appeals, administrative tribunal rulings or settled disputes concerning the construction or application of the instrument.

Consequently, based solely on the text and endnotes of this compilation:

There are no reported judgments or administrative decisions recorded in the instrument or its endnotes that interpret, test or enforce the instrument’s exemptions or reporting modifications.
The instrument’s legal operation therefore appears to have been managed through administrative implementation (notices, forms and ASIC oversight) rather than through an established body of judicial precedent available in the compilation.

What this means for legal advisers and compliance teams

Absent judicial guidance in the compilation, interpretation of disputed points will rely on the statutory text, the Regulations as modified by the instrument (s 17), ASIC guidance (forms and required content referenced repeatedly in the instrument), market operator operating rules, and common law principles applicable to statutory construction. The instrument contains numerous procedural and fact‑intensive conditions (for example, whether a sale is “in the course of making a market”, the reasonableness of beliefs about securities lending arrangement obtainability, or whether a person has a “presently exercisable and unconditional right to vest the shares”) that could be the subject of litigation if disagreed upon.
Practitioners should not assume judicial clarification exists; they should therefore structure compliance and recordkeeping to produce contemporaneous evidence supporting reliance on the exemptions (see s 5(4B)(b) recordkeeping, s 6(5C) acquisition actions and s 6(5D) failure notification) so that, if a dispute reaches courts or tribunals, the factual record is available.

If litigation or judicial decisions relevant to the instrument exist outside this compilation, they are not recorded here and must be located separately in case law databases or ASIC enforcement registers.

The instrument contains multiple technical traps and practical friction points that may expose market participants to loss of an exemption or to reporting non‑compliance. The following are concrete “gotchas” that arise directly from the instrument’s language and mandatory conditions.

Exemptions are conditional and procedural

Many exemptions are not free‑standing rights but depend on procedural steps. For example, an ETP market maker must give ASIC a notice of reliance before first relying on the exemption (s 5(4B)(a)). Failing to give that notice does not merely attract a penalty; it can mean the market maker has no statutory exemption and so the sale falls within the s 1020B(2) prohibition. The instrument repeatedly couples an exemption to notice, recordkeeping or acquisition duties (s 5(4B); s 6(5C)-(5D)).

Timing windows are tight and measured by Sydney legal time unless opted out

Reporting times and deadlines are expressed in Sydney legal time (s 17(1)(f) and the substituted “reference to a time” clause). Option holders and market makers must file particulars by 9 am Sydney time on specified reporting days (s 6(5F); s 7(6C)). Firms operating across time zones must carefully apply the nominated time rules (s 16), account for opt‑out nomination mechanics (30‑day notice and ASIC objection window), and align internal systems to the nominated or global end calendar time as applicable.

Opt‑out nomination has a 30‑day objection window and takes effect after at least 30 days

A firm that wishes to use global end calendar time must give written notice specifying that date at least 30 days before it takes effect, and ASIC may object within 30 days. The opt‑out therefore cannot be used for immediate or near‑term reporting changes (s 16 opt‑out nomination).

“Belief on reasonable grounds” and evidentiary burden

Several provisions require that a person “believes on reasonable grounds” that securities lending or acquisitions can be put in place or that they have an entitlement to be issued or sold products under an offer (s 5(4A)(c)/(4B)(c)‑(d); s 6(5B)). That phrase imposes an objective standard and creates evidentiary exposure if the belief was not properly documented or contemporaneously demonstrable.

Settlement failure limit and reporting periods

The settlement failure limit for ETP market makers is 1% of volume or value of sales during a reporting period that have failed to settle (s 5(4D) settlement failure limit). If exceeded, the ETP market maker must give ASIC a settlement failure notice within 28 days after the reporting period (s 5(4B)(d)). The reporting period is a 12‑month period from 1 April to 31 March (s 5(4D) reporting period). Market makers must track settlement outcomes over the year and be ready to report within the 28‑day window.

Record retention obligations and pre‑sale statements

ETP market makers must, before making an offer to sell, keep a record stating the proposed sale will be a short sale and preserve that record for 12 months after last entry (s 5(4B)(b)). Failure to keep or preserve these records undermines reliance on the exemption.

Acquisition requirements by sale day end for bona fide hedging

Market makers relying on the bona fide hedging exemption must, by the end of the sale day, meet one of the specified acquisition or securities lending arrangements so that the shorted product can be unconditionally vested by delivery time (s 6(5C)). Failure to comply triggers a written notification to ASIC by 9 am on the next business day (s 6(5D)). The day‑end deadline can be operationally challenging in volatile markets.

Complexity of the obtainability formula for exchange traded options (FPIO - FPSO - PS)

Under s 8(3), the seller must calculate FPIO (Financial Products Immediately Obtainable), FPSO (Financial Products Subject to Options) and PS (Previously Sold unobtained products) to determine whether the seller can obtain sufficient products at sale time. The seller must compute obtainability by reference to options with the lowest exercise price first. Miscalculations could mean a sale is not covered by the exemption.

Small position thresholds may be deceptively low

The value limit uses the formula A × B ≤ $100,000 where A is short position at nominated time and B is last sale price or operator determined price; the volume limit is A × 100 / B ≤ 0.01 (s 16 inserted definitions). These formulas can render a short position reportable even where absolute numbers look small, depending on price and total issued quantity. Firms must compute both simultaneously to determine applicability of the s 15 exemption.

ASIC forms and “form required by ASIC” delegation

Multiple reporting duties require particulars “in the form required by ASIC” (s 6(5E); s 7(6B); s 13(1); s 14(1)). The instrument defers to ASIC on form and content, creating operational uncertainty until ASIC issues forms and guidance. Practitioners should not assume reporting formats beyond what ASIC publishes.

Deferred settlement trading mechanics rely on market operator rules

The public offer and corporate action exemptions during deferred settlement trading are conditioned on arrangements “determined by the operator ... in accordance with the operating rules of the financial market” (s 11(7F)(b), s 11(7J)). The precise timing and permissibility therefore vary by market operator, obliging sellers to consult market operator rules and published timetables.

ASIC exclusion and cessation notices can revoke rights

ASIC can give a notice of exclusion to an ETP market maker preventing reliance on the ETP market maker exemption; ETP market makers must also notify ASIC if they cease to rely on the exemption (s 5(4C), s 5(4B)(g)). These are administrative levers that can change legal status quickly.

Each of these “gotchas” is embedded in the instrument’s text; practitioners should map operational workflows, recordkeeping and reporting templates against the specific subsections cited above to avoid inadvertent loss of exemption or regulatory exposure.

Below is a practical, source‑grounded compliance checklist arranged by actor and by cross‑cutting obligations. Each step references the relevant subsection(s) in the instrument so compliance teams can locate the primary obligation.

For ETP market makers (s 5(4A)-(4D), s 13)

Pre‑reliance notice: Give a notice of reliance to ASIC before first engaging in conduct relying on the ETP market maker exemption (s 5(4B)(a)). The notice must state intention to rely on subsection (4A) and include name and the unique code assigned by the relevant market operator for each ETF and specified structured product involved (s 5(4D) notice of reliance).
Confirm eligibility: Ensure you hold an AFS licence covering market making or an exemption, and either have an agreement with the market operator or demonstrate appointment by the scheme/company operator (s 5(4D) ETP market maker definition).
Pre‑sale recordkeeping: Before making an offer to sell the shorted product, create and preserve a record that the proposed sale will be a short sale. Keep the record for 12 months after last entry (s 5(4B)(b)).
Acquisition before delivery: As soon as reasonably practicable after the sale but before delivery time, acquire or apply for sufficient financial products in the same class as the shorted product to enable fulfilment of delivery obligations (s 5(4B)(c)).
Settlement tracking and reporting: Track settlement failures; if sales in reliance on 1020B(4A) during a reporting period exceed the settlement failure limit (1% of volume or value of such sales that failed to settle), give a settlement failure notice to ASIC within 28 days after the reporting period (s 5(4B)(d), s 5(4D) settlement failure limit). Reporting period is 1 April-31 March (s 5(4D)).
Suspension/cancellation notices: If the relevant market operator or the operator of the scheme/company gives a notice of suspension or cancellation to the ETP market maker, give a copy to ASIC within 28 days of receipt (s 5(4B)(e)-(f)).
Cessation notice: If ceasing to rely on the exemption give a notice of cessation to ASIC (s 5(4B)(g)).
Record other documentation: Preserve documentation that the fund operator allowed applications and redemptions on the day of sale, as that is a condition of the exemption (s 5(4A)(c)).

For market makers relying on bona fide hedging (s 6(5A)-(5J), s 14)

Ensure the sale is a bona fide transaction to manage, avoid or limit financial consequences of dealing in a hedged product issued/acquired/disposed of in the course of making a market (s 6(5A)(a)-(b)).
Confirm eligible shorted product: Ensure the shorted product falls within permitted categories (S&P/ASX 300 constituent; interest in STW; or approved ETP/approved ETO scenarios) (s 6(5A)(c)).
Reasonable grounds for obtainability: At time of sale, document reasonable grounds for believing securities lending or acquisition can be put in place before delivery,

ASIC Corporations (Short Selling) Instrument 2018/745

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ASIC Corporations (Short Selling) Instrument 2018/745

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1 ASIC Corporations (Short Selling) Instrument 2018/745

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