By Kane Barnett
On 1 July 2022 Australia will finally get a new fund vehicle, the corporate collective investment vehicle (CCIV).
Historically, Australian funds have been established as unit trusts or, in the case of certain venture capital funds, limited partnerships. The CCIV is a corporate structure that is intended to be more internationally recognisable than the trust-based fund structure as it is similar to the equivalent structure in other key fund jurisdictions such as the United Kingdom, Cayman Islands, Singapore and Hong Kong.
The key features of the CCIV are:
- it is a company that is limited by shares;
- it must have a constitution;
- the sole director must be a public company and hold an Australian financial services licence (AFS licence) authorising it to operate a CCIV;
- there must be at least one sub-fund (multiple sub-funds are allowed but each must have at least one member who holds shares referable to the sub-fund);
- the CCIV and each sub-fund must be registered with ASIC;
- a CCIV may be a retail CCIV or a wholesale CCIV;
- a retail CCIV requires a compliance plan;
- the liability of members of a sub-fund is limited − the sub-fund is a distinct and protected part of the CCIV’s business;
- shares may be redeemed in accordance with their terms of issue and provided that the relevant sub-fund is solvent.
ASIC has proposed that similar AFS licence conditions applicable to responsible entities will also apply to CCIV corporate directors.
It is anticipated that a CCIV AFS licence application will only be able to be lodged from 1 July 2022. Accordingly, a proposed corporate director will not be able to register a CCIV until sometime later when its AFS licence is granted or varied to allow it to operate a CCIV.
Please stay tuned or reach out for further CCIV details and developments.