The Arcane Scepter is rewarded with Shears' Counterattack in Chapter 9.
In Chapter 9, you'll end up leaving Aerith with Madame M, and during that time a handful of side quests will be available. Shears' Counterattack isn't immediately available, so you need to complete the first two side quests to unlock it.
Burning Thighs is as easy as winning the squating mini-game once, and The Price of Thievery has you take down a familiar bandit gang solo (though they've added a wrestling threat to their squad). These are simple two-step quests, so it won't take you long to complete them.
Once they're out of the way, return to Madame M's, where you'll be accosted by the arena presenter before entering the massage parlor. Accept Shears' Counterattack quest, then head to the Colosseum.
Once inside you'll need to tackle an advanced Cutter robot, but it's not that hard to pull off. Make sure you have lightning gear equipped (and link that up to elemental gear to infuse your strikes with Thunder), and don't attack arms unless the knife is offset. Just get in and out of the range between combos and block whenever it charges you. Blast it with Thunder, and it'll be gone in no time.
Once the machine is completed, you will be confronted with Madame M at the entrance to the arena, and she will reward you with the Arcane Scepter. This staff aims to increase Aerith's MP, but it has less magic attack than the Silver Staff. It comes with two pairs of linked gear slots for a total of four, making it an ideal weapon for a support build.
The Arcane Scepter comes with the fleeting familiar ability in Final Fantasy VII Remake, which summons a fairy that will attack enemies periodically as well as after using an ability or spell. It's a magical and damn practical turret. The skill bonus is obtained after using an ability or spell once when activating Fleeting Famliar (thus, while the fairy is floating), so you don't necessarily need to go to the ATB bars for it. remove (but it will help).
