Another round of consultation on the CCIV Bill

The Government today released the second tranche of the Treasury Laws Amendment (Corporate Collective Investment Vehicle) Bill 2018 (CCIV Bill) for public consultation.

The measure complements the Asia Region Funds Passport initiative which we previously reported on, and which passed the Parliament on 28 June 2018.

We also previously reported on the release of tranche 1 of the draft Bill which was open for consultation between 13 June and 18 July 2018.

The initiatives represent an exciting opportunity for Australian fund managers to expand their reach into the growing Asian financial markets in a recognised corporate structure vehicle.

The second tranche of the CCIV Bill covers:

• The application of Chapter 7 of the Corporations Act to CCIVs, such that the financial services regime in Chapter 7 will now generally apply to CCIVs and corporate directors in the same way as it applies to other companies, with some modifications to take into account the unique structure of a CCIV and ensure parity with the requirements for registered schemes. In particular, the corporate director must have an AFSL that covers both its operations and the operations of the CCIV;
• External administration of a CCIV in a winding up situation. This involves winding up on a sub-fund-by-sub-fund basis by treating the CCIV in a winding up situation as if it is comprised only of the sub-fund in respect of which the CCIV is wound up; and
• The liability of the corporate director of a CCIV for contraventions of the law by the CCIV.

The proposed penalty framework for CCIV’s and the proposed approach to takeovers are outlined in the explanatory materials also include a detailed description of the proposed penalties framework for CCIVs and the proposed approach to takeovers, compulsory acquisitions and buy-outs of a CCIV. The provisions for these aspects of the CCIV Bill are under development.

Submissions can be lodged online via the Treasury website from today and conclude on 10 August.

A useful consultation cover note which sets out the key elements of the CCIV regime and shows the relevant sections and references can be accessed here, the Exposure Draft here and the accompanying Explanatory Materials here.