Equity derivatives: The new substantial holder notice disclosure requirements

In brief

• From 4 December 2026, enhanced substantial holding disclosure and beneficial ownership disclosure obligations will apply to entities listed on Australian securities exchanges.
• The reforms impact the substantial holder disclosure provisions under the Corporations Act 2001 (Cth) by expanding the disclosure requirements to capture interests arising under equity derivatives in addition to relevant interests. The Government’s objective is to “improve corporate transparency by showing who ultimately owns, controls and receives profits from companies”. ²
• Market participants with existing derivative positions, or who regularly take or write derivative positions, should review their holdings and systems well in advance of 4 December 2026 to ensure they are prepared for the new disclosure requirements when the reforms come into effect.

Background

The Australian Government has introduced long-anticipated amendments to Chapters 6 and 6C of the Corporations Act which will result in the mandatory disclosure of all forms of derivative interests if the 5% threshold is reached.

The reforms will apply to the following disclosure provisions in the Corporations Act and are set to come into effect on 4 December 2026:

• the substantial holder disclosure provisions;
• the director interest disclosure provisions; and
• the tracing (beneficial holder notice) provisions.

Prior to these reforms, it was possible for an investor to accumulate significant economic exposure to a company through equity derivatives without triggering any disclosure obligation under Chapter 6C — which only required disclosure where the derivative gave the ‘taker’ a 'relevant interest’ in the underlying securities. The Takeovers Panel’s Guidance Note 20 (GN 20) went some way to addressing this perceived gap by expecting disclosure of long equity derivative positions of 5% or more (and subsequent movements of at least 1%). 

The amendments to the Corporations Act introduced in the Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Act 2025 (Cth) (Amending Act) are intended to close that perceived gap by effectively making many of the requirements in GN 20 law, requiring disclosure of all derivative interests where the 5% threshold is met. However, the Amending Act goes even further than GN 20 by expanding the substantial holder notice disclosure obligations to cover all interests arising under equity derivatives regardless of (i) whether the derivative is capable of being physically settled or cash settled, (ii) whether the counterparty has a relevant interest in the underlying securities and (iii) whether the interests would have been required to be disclosed by GN 20.

We previously wrote about the key concepts and changes introduced by these reforms in September 2025 (click here). The key points to recap in relation to the substantial holding regime are as follows:

• The reforms significantly increase the disclosure obligations on market participants by bringing interests arising from equity derivatives into the Chapter 6C disclosure regime. 
• The reforms create a new concept of ‘deemed economic interests’ which captures derivative interests not relatable to any particular underlying security holding of the counterparty. 
• To work out whether one has a disclosable interest, a person must consider not only any ‘relevant interest’ they have (that concept remains largely unchanged by the Amending Act), but also their interests in each of the following categories: 
  1.  ‘relatable derivative-based interests’;
  2. deemed physically settleable derivative-based interests’; and
  3. ‘deemed non-physically settleable derivative-based interests’.

The disclosure notice must also include details of any ‘offsetting short positions’ (which reduce the economic exposure from the derivative).

The new substantial holding notice requirements

Following the conclusion of a consultation process, ASIC has now registered the ASIC Corporations (Listed Entities Enhanced Beneficial Ownership) Instrument 2026/482 (Instrument).

The Instrument provides the technical rules needed to implement the new enhanced beneficial ownership and substantial holding notice disclosure regime, including prescribing how to work out the number of issued securities in which a person has a ‘deemed economic interest’ in (as arising from non-physically settleable derivative-based interest) and ‘offsetting short positions’. 

The Instrument also supports the new disclosure framework by providing the new form of the substantial holding notices. This update focuses on the latter and the practical implications for market participants.

From 4 December 2026, market participants must use either:

• transitional Forms 603, 604 and 605, which can be used from 4 December 2026 until 3 June 2027; or
• a new consolidated “Substantial Notice Form”, which combines initial, change and ceasing to become a substantial holder forms into a single form, which can be used from 4 December 2026 and becomes mandatory on and from 4 June 2027.

The new forms can be accessed here.

Some key points relating to the disclosure requirements

Some of the key points for market participants in relation to the new disclosure requirements:

• The information contained in a person's most recent substantial holding notice lodged before the reforms come into effect (ie before 4 December 2026) will serve as the baseline for all future disclosable movement calculations across the new percentage metrics.
• Any entity that holds a pre-commencement derivative giving rise to a deemed economic interest is treated as beginning to have that interest on 4 December 2026. 
• Where a person is aware (or ought reasonably to be aware) of that interest on 4 December 2026, the standard two-business-day disclosure window runs from that date.
• There is no general obligation to refile a substantial holder notice simply because the new regime has commenced. However, market participants should note:
  • persons with a pre-commencement substantial holding and a pre-commencement derivative will need to lodge a change of interest notice if that derivative interest results in a subsequent movement of 1% or more of their substantial holding; and
  • persons with a pre-commencement derivative interest but no pre-commencement substantial holding will need to assess whether a substantial holding notice is required. 

Commentary

As noted above, the reforms come into effect on 4 December 2026. The reforms are inherently complex and will inevitably require a period of adjustment for market participants. In particular, the complexity of the calculations required to determine deemed economic interests across the various new categories is significant.

Accordingly, market participants with existing derivative positions, or who regularly take or write derivative positions, will need to ensure they have systems in place to comply with the new disclosure requirements from 4 December 2026.