GST issues registers

Financial services - questions and answers

Investor directed portfolio services

(a) added, (u) updated, (w) withdrawn

13.1 What is an investor directed portfolio service (IDPS)?

Non-interpretative

The term IDPS is not defined for the purposes of the GST Act or GST Regulations. Consequently, it is necessary to look towards an ordinary or technical (commercial) meaning. The Australian Securities & Investments Commission (ASIC) Policy Statement (PS) 148 - Investor directed portfolio services provides a technical meaning.

Formally, ASIC, by way of PS 148.12, considers that:

'An IDPS is a managed investment scheme having the following features:

In general terms, an IDPS can be summarised as a managed investment scheme that:

•

embodies services for acquiring and holding investments that involve arrangements for the custody of assets and consolidated reporting

•

generally includes a menu of investment opportunities from which an investor can make selections

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provides for the investor to make all the investment decisions (whether directly or through authorising the operator or another person to make the decisions according to some standing directions).

ASIC, by way of PS 148.19, regard an IDPS as a managed investment scheme because:

•

'...they involve the expectation of cost savings (for example through netting of transactions or pooling of funds for the purposes of making acquisitions) or access to investments that are not otherwise available. In this way, an IDPS differs from a nominee and custody service (NCS) to which this policy does not apply: see Policy Statement 149 Nominee and custody services [PS 149]. We consider that NCS are unlikely to be managed investment schemes'

Arrangements typically marketed as master funds or wrap accounts are likely to be an IDPS.

13.2 Is an IDPS entitled to be registered for GST purposes?

Non-interpretative - straight application of the law.

An IDPS is entitled to be registered for GST purposes if it is found to be an entity that is carrying on an enterprise (whether or not the entity's turnover is at, above or below the registration turnover threshold).

13.3 Is an IDPS an entity within the meaning given by the GST Act?

13.4 Is an IDPS carrying on an enterprise within the meaning given by the GST Act?

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