Transparency and Regulation
How COGS of Australia Foundation sits within Australian law. How members govern the joint venture. What the Foundation discloses, and what cannot be changed by any resolution.
Our Regulatory Position
The CJVM Hybrid Trust is a community joint venture partnership. Members exercise day-to-day control over the operations of the trust through a proprietary cryptographic governance system.
The Foundation has self-assessed its position under Australian law. The CJVM Hybrid Trust does not constitute a managed investment scheme within the meaning of section 9 of the Corporations Act 2001 (Cth). The third element of that definition requires that members do not have day-to-day control over the scheme's operations. That element is not satisfied here. Members exercise day-to-day control through five mechanisms. First, the secure cryptographic governance system. Second, the Aggregate Unitholder Direction mechanism for portfolio company AGM votes. Third, the appointment and removal of the Trustee by Special Resolution. Fourth, the Members Poll mechanism for proposals and binding resolutions. Fifth, the rule that no Trustee action can override a 75 per cent Special Resolution.
The Foundation does not hold an Australian Financial Services Licence (AFSL). It does not operate as a responsible entity under Chapter 5C of the Corporations Act. If applicable law later requires a specific authorisation or disclosure for any activity, the Trustee will obtain or provide what is required.
ATO class ruling
The Foundation has initiated a class ruling request for review with the Australian Taxation Office covering the joint venture's activities. The ruling is sought to ensure full tax transparency and that the model operates within all applicable frameworks. This is a matter of good governance, not a legal requirement.
ASIC Innovation Hub
The Foundation is in ongoing consultation with ASIC through the Innovation Hub while new regulations affecting community joint ventures and cryptographic governance systems are being drafted. Regulatory clarity is an active, ongoing priority. The Foundation does not wait to be asked. It initiates contact, reports its position, and contributes to the regulatory dialogue.
AUSTRAC
The Foundation is working toward AUSTRAC registration as a Digital Currency Exchange provider. This registration is being pursued as part of the broader compliance framework ahead of Expansion Day.
Tier 1 and Tier 2 tokens
Tier 1 token classes — Personal S-NFT (the individual membership unit that carries each member's vote), Kids S-NFT, Business B-NFT, Pay It Forward, Donation, Community COGS, Resident COGS — are governance and community participation instruments. They activated on Governance Foundation Day, 14 May 2026. Tier 2 classes (ASX COGS, Landholder COGS, RWA COGS) activate on Expansion Day, subject to any regulatory requirements that apply at that time.
Not a financial product
Membership in COGS of Australia Foundation is not a financial product, token offering, investment scheme, or managed fund. The $4 membership contribution is an administrative fee, not a payment for a financial instrument. No token has been offered or issued for sale. No token may be sold or traded for Australian dollars. This is an entrenched founding rule that cannot be changed by any resolution.
The Governing Documents
The joint venture operates under a hierarchy of legal instruments. The higher instrument always prevails. If any inconsistency exists between instruments, the Trustee must amend the lower instrument to match the higher one within 30 days.
Joint Venture Participation Agreement (JVPA)
The JVPA is the most important document. Where the JVPA and any other document conflict, the JVPA wins. It sets the founding principles, member rights, governance structure, and the rules that cannot be changed.
CJVM Hybrid Trust Declaration
The Declaration gives the joint venture legal effect under Australian trust law. It governs the three ring-fenced sub-trusts, token classes, distribution rules, First Nations protections, and the governance mechanics. The Sub-Trust Deeds A, B, and C sit alongside the Declaration at the same level of the hierarchy.
Members' Smart Contract System
The cryptographic governance system sits below the Declaration in the hierarchy. It gives effect to member decisions on-chain. It cannot contradict or override the JVPA or Declaration. Where any on-chain record conflicts with a CHESS register record for share holdings, the CHESS record prevails as the primary legal record.
Access for members
All governing documents are provided to new members during the application process. Members can access the current version of all governing documents in their wallet library at any time. The version of the JVPA you accepted on joining is permanently recorded against your membership and is available in your wallet.
How Members Govern
Members operate the joint venture. The Trustee holds legal title to the assets and executes valid member directions. The Trustee cannot act against member governance decisions.
One member, one vote
Each personal member (S-NFT holder) holds one equal national governance vote. More tokens do not buy more voice. Wealth does not buy additional governance authority. This is an entrenched founding principle. It cannot be changed without a 75% Special Resolution.
How to raise a proposal
Any 10 members can start a Members Poll. Or 1 per cent of all personal members, whichever is the smaller number. Once a proposal is submitted, members have 7 days to think and talk about it. Then voting opens for another 7 days. Every personal member can vote.
Two types of resolution
Ordinary resolutions require a simple majority of votes cast. Special resolutions require 75% of all S-NFT holders to vote in favour. Ordinary resolutions cover standard governance decisions. Special resolutions are required to amend entrenched founding principles or to remove the Trustee. No board decision or Trustee action can override a 75% member special resolution.
Anti-capture cap
No person can hold more than 1,000,000 tokens across all classes combined. Auto-allocated Resident COGS do not count toward this cap. The cap exists to prevent any individual or group from gaining a controlling position in the joint venture. It is an entrenched founding principle.
Trustee appointment and removal
Members appoint and remove the Trustee by Special Resolution. From Expansion Day, the Appointer power vests collectively in the holders of Personal S-NFT individual membership units then validly issued. The Trustee serves at the direction of members, not the other way around.
Voting on portfolio company AGMs
The Foundation holds CHESS-registered shares in ASX-listed companies. The Trustee is the registered holder and votes those shares at AGMs. But the Trustee does not decide how to vote independently. Members direct the AGM vote through the Aggregate Unitholder Direction mechanism in their wallet. Members have a minimum of 10 business days to cast their preference before any portfolio company meeting. Where the company's timeline does not permit a full 10 days, a minimum of 48 hours applies. The option receiving the most votes becomes the direction the Trustee must follow. Vote outcomes are published to all members within 5 business days of the meeting.
Affected Zone votes
When a Foundation action materially affects a local community or Country, an Affected Zone may be declared. An example is a portfolio company proposing resource extraction near a community. Members inside the Affected Zone receive additional weighted vote units on local decisions affecting that area. Eligibility is based on verified address and boundary evidence, not live device location. Weighting rules are co-designed with the First Nations Advisory Council and Traditional Owner groups.
What Cannot Be Changed
The entrenched founding principles are the constitutional bedrock of the joint venture. They are established in JVPA clause 1.5. They cannot be amended except by a 75% Special Resolution of S-NFT members, followed by a Declaration amendment directed by Members Poll.
No board decision. No Trustee action. No ordinary resolution. None of these can override an entrenched founding principle. This is what makes the structure durable.
One member, one vote
Each personal S-NFT member holds one equal national governance vote. More tokens do not buy more voice. This applies to every national governance decision, without exception.
Direct CHESS registration
All ASX shares held by the Foundation are registered directly on the CHESS register in the Foundation's name as Trustee. No intermediary sits between the Foundation and the CHESS register. This gives members a traceable, legally recognised line of sight from the Trustee's CHESS registration to the joint venture's holdings, with all entries publicly verifiable on the ASX CHESS register.
No fiat sale
No COGS token of any class can be sold, traded, or exchanged for Australian dollars or any other fiat currency. Any attempted fiat transaction is void from the start. This rule keeps value circulating within the community instead of being extracted.
Fixed $4 membership
The Personal S-NFT membership contribution is permanently fixed at $4. The Kids S-NFT contribution is permanently fixed at $1. Neither can be changed by any resolution of any kind. Open entry at these prices is a founding commitment.
30% First Nations minimum
Not less than 30% of annual Sub-Trust C distributions must go to First Nations programs. This is an entrenched minimum established in the Sub-Trust C deed. It cannot be reduced by any resolution.
FNAC, FPIC, and ICIP
The First Nations Advisory Council has entrenched constitutional standing. It cannot be removed or sidelined by any ordinary Members Poll. Free, Prior and Informed Consent is required for any action on Country that requires it. Indigenous Cultural and Intellectual Property protections are embedded in the system. A Members Poll does not override these obligations.
Permanent asset pool
The Members Asset Pool (Sub-Trust A) is permanent and non-disposable. Assets held in Sub-Trust A are held in perpetuity for the benefit of members. Sub-Trust A has no power of sale. If a portfolio company does something the Foundation disagrees with, the Trustee's permitted responses are using shareholder rights to push for change at the AGM, and talking to the board. Selling the shares is not permitted.
Anti-capture cap
No person may hold more than 1,000,000 tokens across all classes combined. Auto-allocated Resident COGS are excluded from this cap. The cap prevents concentration of control and protects the Foundation from capture for private benefit.
How We Disclose
Transparency is a structural obligation, not a policy choice. These are the disclosure commitments built into the governing documents.
CHESS register
All ASX share holdings are publicly visible on the CHESS register. There is no hidden layer between the Foundation and its share holdings. Any person can verify the Foundation's holdings through the ASX registry system.
Vote outcomes
The outcome of every portfolio company AGM direction vote is published to all members within 5 business days of the meeting. The Foundation's voting position at each AGM is recorded and available to members.
Acceptance records
When you join, the version of the JVPA you accepted is recorded permanently. The acceptance record includes your S-NFT token ID, member number, JVPA version, a SHA-256 hash (a one-way cryptographic fingerprint that proves the record has not been altered) of the agreement text, the UTC timestamp, and your Stripe payment reference. The SHA-256 acceptance hash is written permanently into your S-NFT token and cannot be altered. You can review this record in your wallet at any time.
Governing documents
All governing documents are provided to new members during the join process. The current versions are available in the member wallet library. The Foundation does not hold governing documents back from members.
Regulatory engagement
The Foundation discloses its regulatory position publicly on this page and in its governing documents. It engages with ASIC voluntarily through the Innovation Hub. It has filed a class ruling application with the ATO. It is working toward AUSTRAC registration. The Foundation does not claim certainty where it does not have it. Where the regulatory position is self-assessed, it is described as self-assessed.
Continue reading: Governing Principles: the eight principles the Foundation is built on. Governance: board structure and regulatory posture. Terms of Participation: what you agree to when you join.
The s.9 Three-Element MIS Analysis
This section explains, in plain terms, how the Foundation's structure sits outside the "managed investment scheme" definition in Australian law. The detail below uses some technical language because the test in the Corporations Act uses technical language. The plain-English summary: the Foundation is not a fund. The $4 you pay is not an investment. Members run the joint venture themselves.
The Corporations Act 2001 (Cth) section 9 defines a managed investment scheme as a scheme that has all three of the following elements. All three must be present for a structure to constitute an MIS. The Foundation's self-assessed position is set out element-by-element below. This is a public statement of the Foundation's position. It is not legal advice.
Element (a): Contribution for interests in benefits
The s.9 test asks whether participants contribute money or money's worth to acquire rights to benefits produced by the scheme.
The Foundation's position. The $4 membership contribution is an administrative fee for the issuance of an individual membership unit (Personal S-NFT) to a specific member, recorded on the cryptographic governance ledger and permanently linked to that member's identity. It is not a contribution toward a pooled investment vehicle, a unit in a fund, or an interest in financial benefits. Each contribution is allocated to one member's individual governance unit; there is no common acquisition vehicle.
Element (b): Pooling or common enterprise
The s.9 test asks whether contributions are pooled or used in a common enterprise to produce financial benefits or property interests for members.
The Foundation's position. Sub-Trust A (the Members Asset Pool) holds CHESS-registered ASX shares as trust property in perpetuity under a non-disposability provision. The Foundation's purpose is community stewardship governance over those holdings, not pooled investment for financial returns to members. Income distributions through Sub-Trust B are made where income is generated; community projects through Sub-Trust C operate under entrenched First Nations allocation rules. The structure is designed to produce stewardship outcomes and community governance capacity, not financial benefits of the kind contemplated by s.9.
Element (c): Day-to-day control
The s.9 test asks whether members do not have day-to-day control over the scheme's operations. If members do have that control, the third element is not satisfied and the structure is not an MIS.
The Foundation's position. Members exercise day-to-day control over the joint venture's operations through six mechanisms.
- The proprietary cryptographic governance system through which all members hold one equal national governance vote.
- The Aggregate Unitholder Direction mechanism by which members direct how the Trustee votes CHESS-registered shares at portfolio company general meetings (minimum 10 business days deliberation period, with vote outcomes published within 5 business days).
- The Members Poll mechanism through which any 10 members (or 1 per cent of personal members, whichever is lower) can initiate proposals, with 7-day deliberation and 7-day voting periods.
- Direct member appointment and removal of the Trustee by Special Resolution. From Expansion Day, the Appointer power vests in the holders of Personal S-NFT individual membership units collectively.
- The 75 per cent Special Resolution threshold for amending entrenched principles. No Trustee action and no Board decision can override a 75 per cent member Special Resolution.
- The First Nations Advisory Council's entrenched constitutional standing, which cannot be removed or sidelined by ordinary resolution.
The third element of the s.9 definition is not satisfied because members exercise direct, structural, day-to-day control through these mechanisms.
Self-assessed position only
The element-by-element analysis above is the Foundation's self-assessed position. It is not legal advice and does not bind ASIC. The Foundation is in ongoing consultation with ASIC through the Innovation Hub and has a class ruling application under review with the Australian Taxation Office. If applicable law later requires a specific authorisation or disclosure for any activity, the Trustee will obtain or provide what is required.