For external applicants, your university average is converted into an equivalent ATAR and you'll be assessed with this converted mark. You may also be assessed with the 2018 HSC cohort depending on the timing of your application.
si2136's point is absolutely correct so you want to it to be minimum distinction. A general consensus is a DN average is equivalent of a 95+ ATAR so if you maintain a DN average, given the commerce ATAR is 96.5, you will be considered competitive depending on the pool of candidates you are assessed with.
Given you are only a first year student, UNSW may assess both your ATAR and your UTS average depending on how much you studied. Here are scenarios that will fit you.
1. If you have studied one year full-time in one degree (studying at least 0.75 of a full-time study load - which is between 36- and 48 units of credit) - you will be assessed for transfer. That assessment will be based on whichever is the higher result between your high school results and your overall university results (converted to an ATAR equivalent score).
2. If you have studied less than 0.75 of a full-time year - so less than 36 units of credit - your assessment reverts back to your high school results.
3. If you have studied more than one year full-time - so more than 48 units of credit - then you will be assessed for entry based on 25% secondary results and 75% university results.