AUSTRALIA: Registered scheme and CCIV compliance: Obligation to give notice of members’ rights
By Matthew Watts and Rebecca Mangos
As the end of the 2023 financial year fast approaches, responsible entities and CCIV corporate directors should be reminded of their obligation to notify members by 30 June 2023 of their rights to elect and request to receive certain documents in physical or electronic form.
The Corporations Amendment (Meetings and Documents) Act 2022 came into effect on 1 April 2022 and introduced a number of important measures to permanently allow for the use of technology to hold member meetings, execute company documents (including deeds) and distribute meetings-related material. These changes were a significant step in permanently modernising the way that registered schemes could use technology to fulfil these obligations and were well received across the industry.
One other change introduced by these amendments and not widely publicised at the time was a new requirement for responsible entities and CCIVs (among others) to notify members that they have the option to:
- elect to be sent certain documents in physical or electronic form;
- elect not to be sent the annual financial report for the scheme or CCIV they have invested in; and
- make a request to receive a particular document in physical or electronic form.
The member communications to which the election and request referred to above may be made generally include:
- documents that relate to member meetings (including a meeting of a class of unitholders);
- the annual financial report; and
- other documents that may be prescribed by applicable regulations from time to time.
Obligation to give notice by 30 June
Importantly, responsible entities and CCIV corporate directors must provide this notice to members at least once in each financial year. This notice requirement may be satisfied by either physically sending the notice to members during the financial year or alternatively making the notice readily available on a website. Most responsible entities appear to be satisfying this obligation by making the notice permanently available on their website where other investor notifications are displayed. However, those responsible entities and CCIV corporate directors that have not yet provided this notice directly to members, or placed the notice on their website, should start thinking about how they intend to satisfy this notification requirement so as to make sure they can meet the 30 June deadline.