Download ASIC Class Order [CO 99/1225] - Federal Register of Legislation

ASIC Class Order [CO 98/55]
Investments in unregistered schemes
Policy Statement 55, Policy Statement 136
This instrument has effect under s601QA(1)(a) and (b) of the Corporations Act 2001.
This compilation was prepared on 16 February 2012 taking into account amendments up
to [CO 05/874]. See the table at the end of this class order.
Prepared by the Australian Securities and Investments Commission.
Australian Securities and Investments Commission
Corporations Act 2001 — Paragraphs 601QA(1)(a) and (b) — Exemption and Declaration
Pursuant to paragraph 601QA(1)(a) of the Corporations Act 2001 (the Act) the Australian
Securities and Investments Commission (the Commission) hereby exempts the persons
specified in Schedule A from subsection 601FC(4) in each of the cases set out in
Schedule B.
SCHEDULE A
The responsible entity of a registered scheme (“the Registered Scheme”) part of the
scheme property of which is invested, or kept invested, in a managed investment scheme
that is not registered under Chapter 5C of the Act.
SCHEDULE B
1.
The investment of scheme property or the keeping of scheme property invested, in:
(a) a scheme that:
(i) is operated by a body that is incorporated or formed in Hong Kong; and
(ii) is authorised by the Securities and Futures Commission of Hong Kong as a
collective investment scheme under section 104 of Chapter 571 of the Laws of
Hong Kong or any provision that replaces that section; and
(iii) complies with the Code of Unit Trusts and Mutual Funds (the “Code”) published
by the Securities and Futures Commission of Hong Kong as amended from time
to time; and
(iv) is not:
(A) a recognized jurisdiction scheme (as defined in the Code); or
(B) a specialized scheme for the purposes of the Code;
(b) a scheme that:
(i) is operated by a body that is incorporated or formed in the United Kingdom (the
“UK”); and
(ii) is authorised under section 243 of the Financial Services and Markets Act 2000
of the UK or any provision that replaces that section; and
(iii) the responsible entity of the Registered Scheme reasonably believes is a
securities scheme under the Collective Investment Schemes Sourcebook
published by the Financial Services Authority of the UK as amended from time
to time;
(c) a scheme that:
(i) is operated by a body that is incorporated or formed in the United States of
America (the “USA”) or a State of the USA; and
(ii) is registered under section 8 of the Investment Company Act of 1940 of the USA
(the “Investment Company Act”) or any provision that replaces that section; and
(iii) is either:
(A) an open ended company as defined in section 5.a.(1) of the Investment
Company Act or any provision that replaces that section; or
(B) a unit investment trust as defined in section 4(2) of the Investment Company
Act or any provision that replaces that section; and
(iv) the responsible entity of the Registered Scheme reasonably believes invests
primarily in market traded securities;
(d) a scheme that:
(i) is operated by a body that is incorporated or formed in New Zealand; and
(ii) is or involves either:
(A) a unit trust as defined in section 2 of the Unit Trusts Act 1960 of New
Zealand or any provision that replaces that section, and in relation to which a
trust deed has been approved by the Registrar or District Registrar of
Companies and an authenticated copy of the trust deed has been lodged with
the District Registrar of Companies under sections 8 and 9 of that Act or any
provisions that replace those sections; or
(B) the issue of participatory securities as defined in subsection 2(1) of the
Securities Act 1978 of New Zealand or any provision that replaces that
subsection, where:
(I) in relation to which, a statutory supervisor has been appointed and a
deed of participation registered by the Registrar of Companies under
section 33(3) and 46 of that Act or any provisions that replace those
sections; and
(II) the responsible entity of the Registered Scheme reasonably believes that
the scheme assets are primarily invested in market traded securities;
2
(e) a scheme that:
(i) is operated by a body that is incorporated or formed in Guernsey; and
(ii) is declared by the Guernsey Financial Services Commission to be an authorised
collective investment scheme, Class A, under section 8 of The Protection of
Investors (Bailiwick of Guernsey) Law 1987 or any provision that replaces that
section;
(f) a scheme that:
(i) is operated by a body that is incorporated or formed in the Isle of Man; and
(ii) is declared by the Isle of Man Financial Supervision Commission to be an
authorised scheme under section 3 of the Financial Supervision Act 1988 or any
provision that replaces that section;
(g) a scheme that:
(i) is operated by a body that is incorporated or formed in Jersey; and
(ii) is declared by the Jersey Financial Services Commission to be a Recognized
Fund under the Collective Investment Funds (Recognized Funds) (General
Provisions) (Jersey) Order 1988, or the Collective Investment Funds (Recognized
Funds) (Rules) (Jersey) Order 2003 or any provisions that replace those Orders;
where the responsible entity of the Registered Scheme reasonably believes that interests
issued as a result of applications made in this jurisdiction or issued to responsible entities
under registered schemes represent a minority of interests in the scheme (the
“unregistered scheme”) in which the investment is made or kept (calculated both by value
and by the number of holders of interests in the unregistered scheme).
2. The investment of scheme property or the keeping of scheme property invested, in a
scheme the underlying assets of which consist solely or substantially of a pool or
collection of debts, or other financial obligations, of a similar nature where:
(a) a person who invests in the unregistered scheme is entitled to have the investment
(less any fees) repaid on or by a date (the “final maturity date”) that is determined on
or before the issue of the interest;
(b) a person who invests in the unregistered scheme is entitled to distribution of income
at a rate that is:
(i) determined on or before the issue of the interest; or
(ii) calculated in accordance with a method that is determined on or before the issue
of the interest (being a method that once determined is beyond the control of any
person operating
the unregistered scheme and is not dependent on the performance of the
unregistered scheme or its underlying assets);
(c) a person who invests in the unregistered scheme is not entitled under the unregistered
scheme to any other income from the investment (apart from the income referred to in
3
paragraph (b) or any amounts that might be payable in the event of any default or
prepayment); and
(d) the responsible entity is satisfied on reasonable grounds, when the investment is made
that:
(i) the investment (less any fees) will be repaid on or by the final maturity date; and
(ii) all income from the investment will be paid when it is due,
having regard to all the circumstances including any relevant credit rating issued by a
ratings agency.
3. The investment of scheme property or the keeping of scheme property invested, in a
scheme in relation to which an exemption the Commission has given from:
(a) subsection 601ED(5) of the Act, being an exemption that:
(i) is not limited so that it applies only if specified offers, invitations or issues of
interests in the scheme are made; and
(ii) is not subject to conditions that restrict, and does not otherwise have the effect of
restricting, the making of any offers, invitations or issues of interests in the
scheme; or
(b) while the Corporations Law (as in force immediately before the commencement of
the Managed Investments Act 1998 and as continued in force by section 1408 of the
Act) applies to the scheme in which the investment is made, subsection 1065(1) of
that Law in relation to all offers of prescribed interests in the scheme for subscription,
applies and the responsible entity has no reason to believe that any conditions of the
exemption have not been complied with.
4. The investment of scheme property or the keeping of scheme property invested, if,
immediately following that investment, the total of:
(a) amounts that have been invested in unregistered schemes (excluding those permitted
by other provisions of this instrument); and
(b) amounts that the responsible entity should reasonably foresee may later have to be
paid in relation to those investments,
does not exceed 10% of the value of the assets (net of liabilities) of the Registered
Scheme;
5. The investment of scheme property before 30 September 2005 or the keeping before
30 September 2005 of scheme property invested in
(a) a Fysscal Contract (as defined in the contract) offered by BT Securities Limited ACN
000 720 114 that includes representations by BT Securities Limited to the effect that:
(i) the terms of the Fysscal Contract do not materially differ from the terms of the
agreement that was given to the Commission on 21 April 1997 except for:
4
(A) any variation that the Commission has permitted in writing; or
(B) any variation as a result of the deletion of a provision from the agreement, or
the re-inclusion of a provision in the agreement, in accordance with the
express terms of the agreement; and
(ii) BT Securities Limited holds a dealers licence;
and in relation to which the responsible entity, at the time the Fysscals Contract is
first entered into:
(iii) is satisfied on reasonable grounds, based only on the creditworthiness of the
issuer and any other relevant person assessed having regard to all the
circumstances including any relevant credit rating issued by a ratings agency,
that as trustee for the Registered Scheme, it or its agent will at each of the fixed
times receive the relevant maximum amount it can be entitled to as the investor
assuming the investment is held to maturity; and
(iv) based on the current circumstances, believes that it is likely that it or its agent
will hold the investment until maturity as trustee for the Registered Scheme.
(b) a related deposit agreement for the purposes of the trust established under the deed
originally between Timothy Bishop and BT Securities Limited dated 23 February
1994 (“1994 Deed”) under which responsible entity has agreed to the individually
identified assets in which as trustee for the Registered Scheme it or its agent will have
an interest and the terms of and counterparty to the related financial derivative as
defined in the 1994 Deed where the related deposit agreement includes
representations:
(i) by the trustee for the purposes of the 1994 Deed to the effect that:
(A) the terms of the related deposit agreement and 1994 Deed do not materially
differ from the terms of the pro forma agreement and 1994 Deed given to the
Commission on 18 April 1997 except for:
•
any variation that the Commission has permitted in writing; or
•
any variation as a result of a deletion of a provision from the agreement,
or the re-inclusion of a provision in the agreement, in accordance with
the express terms of the agreement; and
(B) the trustee for the purposes of the 1994 Deed holds a dealers licence;
(ii) by the responsible entity to the effect that each authorised investment and related
financial derivative is an investment or contract that the responsible entity would
be permitted to invest in or be a party to under the constitution of the registered
scheme.
(c) an interest arising from a Secure Look-through Enhanced Customised Transaction
Master Agreement (“SELECT Master Agreement”) including the Schedule and the
form of the Annexure (as those terms are defined in the SELECT Master Agreement)
offered by Deutsche Bank AG ARBN 064 165 162 if Deutsche Bank AG represents
to the client in writing prior to the client executing the SELECT Master Agreement
5
and in each Confirmation (as defined in the SELECT Master Agreement) that is
issued that:
(i) the terms of the SELECT Master Agreement do not materially differ from the
terms of the agreement that was given to the Commission on 19 September 1997
(the “standard form agreement”) except for:
(A) any variation that the Commission has permitted in writing; or
(B) any variation as a result of:
(I) the deletion of a provision from the agreement or the re-inclusion of a
provision in the agreement,
in accordance with the express terms of the agreement;
(II) the insertion of the relevant details in the Schedule and the Confirmation
in the Annexure;
(III) the variation of the definition of “Authorised Investments” in the
Schedule,
other than a variation that extends the categories of Authorised Investments
outside the categories in the Schedule to the standard form agreement;
(ii) Deutsche Bank AG will ensure at the time of purchase of Authorised Investments
that the Authorised Investments will be rated at least as Investment Grade Rated
Securities as defined in the standard form agreement;
(iii) any additional terms in paragraph 8 of the Confirmation do not amend the
SELECT Master Agreement so that its terms are materially different from the
terms of the standard form agreement (the making of representations
contemplated by this paragraph (c) do not result in the terms being materially
different for this purpose); and
(iv) Deutsche Bank AG is an Australian bank,
and in relation to which the responsible entity at the time each SELECT Contract (as
defined in the standard form agreement) is entered:
(v) is reasonably satisfied, based only on the creditworthiness of the issuer of the
Authorised Investments purchased under a SELECT Contract and the
creditworthiness of Deutsche Bank AG and any other relevant person assessed
having regard
to all the circumstances relevant to the assessment of creditworthiness including
any relevant credit rating issued by a ratings agency, that the responsible entity or
its agent will at each of the fixed times applying in relation to the SELECT
Contract receive the maximum amount it can be entitled to receive as the
investor under the SELECT Master Agreement assuming the SELECT Contract
is held to maturity; and
6
(vi) based on the current circumstances, believes that, if permitted by Law, it is likely
that it or its agent will hold the SELECT Contract investment until maturity.
6. The investment of scheme property or the keeping of scheme property invested, in a
pool the primary purpose of the operation of which is to keep the assets invested in safe
custody where the responsible entity is satisfied that:
(a) no income will be derived by members of the pool that would not be derived, gross of
any expenses in using the pool, had the assets been held by the members directly;
(b) the responsible entity will be liable to members for the acts and omissions of the
person operating the pool (“custodian”) as if the custodian's acts and omissions were
acts or omissions of the responsible entity; and
(c) the custodian will be obliged, subject to the general Law not including any
contractual obligations, to deal in the property attributable to the scheme only on the
directions of the responsible entity or its agents.
7.
The keeping of scheme property invested in an unregistered scheme at any time if:
(a) disposing of the interest in the unregistered scheme at that time would reduce the
market value of the scheme property (other
than due to usual transaction costs) for reasons other than the responsible entity not
having taken all reasonable steps to enable it to dispose of the interest in a way that
maximised the value of the scheme property after the disposal at all times since the
unregistered scheme ceased to be registered if applicable or the Registered Scheme
was registered whichever was the latter; and
(b) the responsible entity can reasonably foresee an opportunity to dispose of the interests
with less reduction in the market value of the scheme property.
8. The investment of scheme property or the keeping of scheme property invested in an
undertaking under an approved deed to which Corporations Law (as in force immediately
before the commencement of the Managed Investments Act 1998 and as continued in
force by section 1408 of the Act) applies.
9. The investment scheme property or the keeping of the scheme property invested in an
unregistered scheme operated by the Crown in right of the Commonwealth, State, the
Northern Territory or the Capital Territory.
And pursuant to paragraph 601QA(1)(b) of the Act, the Commission declares that
Division 11 of Part 11.2 (as continued in force by section 1408 of the Act) applies to the
trustee and representative and management company for the purposes of each approved
deed as if the following subsection were added in section 1454 in that Division:
“(5) While the old Law applies to an undertaking, regulation 7.12.15(1)(a) of the
Corporations Regulations applies to the undertaking as if there was an approved deed in
force in relation to any prescribed interests that are interests in a registered scheme.”
7
Interpretation
In this instrument:
“market traded securities” means:
(a) financial products which are able to be traded on a financial market and that it is
reasonable for the responsible entity of the Registered Scheme to believe are capable
of being realised within 7 business days; or
(b) other financial products that it is reasonable for the responsible entity of the
Registered Scheme to believe can be valued by reference to reasonably comparable
products that are able to be traded on a financial market.
8
Notes to ASIC Class Order [CO 98/55]
Note 1
ASIC Class Order [CO 98/55] (in force under s601QA(1)(a) and (b) of the Corporations
Act 2001) as shown in this compilation comprises that Class Order amended as indicated
in the tables below.
Table of Instruments
Instrument
number
Date of making or
FRLI registration
Date of
commencement
Application, saving
or transitional
provisions
[CO 98/55]
13/7/1998 (see
F2006B01310)
13/7/1998
[CO 98/1809]
2/10/1998 (see
F2006B01311)
2/10/1998
-
[CO 99/28]
19/1/1999 (see
F2006B01312)
19/1/1999
-
[CO 99/674]
21/5/1999 (see
F2006B01313)
21/5/1999
-
[CO 99/1203]
18/8/1999 (see
F2006B01314)
18/8/1999
-
[CO 00/1210]
22/6/2000 (see
F2006B01320)
22/6/2000
-
[CO 02/737]
28/6/2002 (see
F2006B01322)
28/6/2002
-
[CO 03/453]
18/6/2003 (see
F2006B01321)
18/6/2003
-
[CO 03/1116]
21/12/2003 (see
F2006B01323)
21/12/2003
-
[CO 04/362]
26/3/2004 (see
F2006B01326)
26/3/2004
-
[CO 04/527]
27/5/2004 (see
F2006B01328)
1/6/2004
-
[CO 04/1552]
14/12/2004 (see
F2006B01327)
14/12/2004
-
[CO 05/874]
15/9/2005 (see
F2005L02665)
15/9/2005
-
Table of Amendments
ad. = added or inserted
am. = amended
rep. = repealed
rs. = repealed and substituted
Provision affected
How affected
Introductory para.........
am. [CO 99/674] and [CO 00/1210]
Schedule B, para 1 ......
am. [CO 02/737]; [CO 03/453]; [CO 03/1116]; [CO 04/362] and rs.
[CO 04/527]
Schedule B, para 2 ......
am. [CO 02/737]; [CO 04/1552] and [CO 05/874]
9
Provision affected
How affected
Schedule B, para 3(a) ..
am. [CO 98/1809]
Schedule B, para 3(b) ..
am. [CO 02/737]
Schedule B, para 4 ......
am. [CO 04/362]
Schedule B, para 5 ......
am. [CO 99/1203]; [CO 02/737] and [CO 04/1552]
Schedule B, para 5(c) ..
ad. [CO 99/28]
Schedule B, para 8 ......
am. [CO 02/737]
Schedule B, para 9 ......
ad. [CO 00/1210] and am. [CO 02/737]
Schedule B last para ....
am. [CO 02/737]
Interpretation...............
ad. [CO 04/527]
Class order ..................
am. [CO 99/674]; [CO 00/1210] and [CO 02/737]
10