Corporations Act 2001

CHAPTER 8B - CORPORATE COLLECTIVE INVESTMENT VEHICLES  

PART 8B.4 - CORPORATE FINANCE, FINANCIAL REPORTING AND SUSTAINABILITY REPORTING FOR CCIVs  

Division 1 - Shares  

Subdivision A - Issuing and converting shares in a CCIV  

SECTION 1230   SHARES CAN ONLY BE ISSUED IN RESPECT OF SUB-FUNDS  

1230(1)    
A CCIV can issue a share only if the rights attaching to the share, so far as the rights are in respect of the assets of the CCIV, are restricted to rights in respect of the assets of one (and only one) sub-fund of the CCIV. This is the sub-fund to which the share is referable .

1230(2)    
The sub-fund to which the share is referable does not change if, after the share is issued, the CCIV acquires the share in respect of another of its sub-funds.

Note: For cross-investment between sub-funds, see Subdivision F .

1230(3)    
Subsection (1) and regulations made for the purposes of subsection (5) limit paragraph 124(1)(a) and section 254A in relation to a CCIV.

Note: Subsection (1) effectively also limits some other paragraphs of subsection 124(1) , such as paragraph (c) (about granting options over unissued shares in a company).

1230(4)    
A Court must not make an order under section 254E that is inconsistent with subsection (1) of this section, or regulations made for the purposes of subsection (5) of this section, unless the Court considers that the interests of justice require otherwise.

1230(5)    
Regulations made for the purposes of this subsection may make provision for and in relation to further requirements for the issue of shares by a CCIV.

1230(6)    
Without limiting subsection (5) , regulations made for the purposes of that subsection may prescribe requirements for the issue of shares, or classes of shares, in relation to one or more of the following:

(a)    all CCIVs;

(b)    a specified class of CCIVs;

(c)    all sub-funds of all CCIVs;

(d)    a specified class of sub-funds of CCIVs;

(e)    all sub-funds of a specified class of CCIVs.

SECTION 1230A   MINIMUM OF ONE CLASS OF SHARES PER SUB-FUND  

1230A(1)    
The shares in a CCIV that are referable to the same sub-fund of the CCIV, if not divided into 2 or more classes, constitute a class.

Note: A CCIV can issue shares only if the rights attaching to the shares are referable to one (and only one) sub-fund of the CCIV: see section 1230 .

1230A(2)    
A class of shares is referable to a sub-fund of a CCIV if the shares in the class are referable to the sub-fund.

Part 2F.2 does not permit variation contrary to this section

1230A(3)    
Nothing in Part 2F.2 permits rights attached to shares in a class of shares to be varied or cancelled in a manner that results in a contravention of this section.

SECTION 1230B   POWER TO ISSUE REDEEMABLE SHARES  

1230B(1)    
Subject to section 1230 , a CCIV ' s power under section 124 to issue shares includes the power to issue redeemable shares.

1230B(2)    
All, some, or none of the shares in a CCIV may be redeemable shares.

Note: Subsections (1) and (2) reflect the fact that CCIVs may be open-ended investment vehicles.

1230B(3)    
This section operates concurrently with section 254A .

1230B(4)    
A redeemable share , in a CCIV, is a share (other than a preference share) in a CCIV that is liable to be redeemed at the option of one or more of the following:

(a)    the CCIV;

(b)    the member.

Option to redeem is not a preference

1230B(5)    
In determining whether a share in a CCIV is a preference share, any rights attaching to shares in the CCIV with respect to redemption are to be disregarded.

Note: As a result, a CCIV may have ordinary shares that are redeemable as well as ordinary shares that are not redeemable. Preferences relating to redemption (including preferences relating to who has the option to redeem) are ignored in determining whether a share is a preference share.

SECTION 1230C   CONVERSION OF SHARES  

1230C(1)    
A CCIV may convert a share of any kind into a share of a kind mentioned in an item in column 1 of the following table if the requirements (if any) specified in column 2 of the item are met.

Conversion of shares
Item	Column 1 To convert a share into a share of this kind:	Column 2 These requirements must be met:
1	An ordinary share (other than a redeemable share)	No specified requirements (but see Note 1)
2	A redeemable share	The conversion has been approved by a special resolution of the sub-fund of the CCIV to which the share is referable (see also Notes 1 and 2)
3	A preference share (other than a redeemable preference share)	The holders ' rights with respect to the matters mentioned in subsection 254G(2) are set out in the CCIV ' s constitution (if any) or have been otherwise approved by special resolution of the sub-fund of the CCIV to which the share is referable (see also Note 1)

Note 1: The variation of class rights provisions (sections 246B to 246G ) will apply to the conversion.

Note 2: For a director ' s duty to prevent insolvent trading on converting shares into redeemable shares, see sections 588G and 1238C .

1230C(2)    
A CCIV may not convert a share into a redeemable preference share.

1230C(3)    
A CCIV may convert all or any of its shares into a larger or smaller number. Any amount unpaid on shares being converted is to be divided equally among the replacement shares.

1230C(4)    
This section replaces sections 254G and 254H for a CCIV.

Subdivision B - Redemption of shares  

SECTION 1230D   REDEMPTIONS TO WHICH THIS SUBDIVISION APPLIES  

1230D(1)    
This Subdivision applies to both of the following:

(a)    a redemption by a CCIV of a redeemable share;

(b)    a redemption by a CCIV of a redeemable preference share.

Note: A CCIV may reduce its share capital if the reduction results from a redemption permitted by this Subdivision: see section 1231D .

1230D(2)    
Part 2H.2 does not apply to the redemption of redeemable preference shares in a CCIV.

SECTION 1230E  

1230E   REDEEMED SHARES TO BE CANCELLED  

On redemption by a CCIV, a share is cancelled.

SECTION 1230F   REQUIREMENTS FOR REDEMPTIONS BY ALL CCIVs  

Redemption must be in accordance with terms of issue

1230F(1)    
A CCIV must not redeem shares if the redemption is not on the terms on which the shares are on issue.

Sub-fund must be solvent

1230F(2)    
A CCIV must not redeem shares if, immediately before the redemption:

(a)    the sub-fund to which the shares are referable is insolvent; or

(b)    there are reasonable grounds for suspecting that the sub-fund to which the shares are referable is insolvent, or would become insolvent immediately after the redemption.

Note 1: For when a sub-fund of a CCIV is solvent , or insolvent , see section 1231A .

Note 2: The directors of the corporate director have a duty to prevent insolvent trading by sub-funds: see section 588G (as modified by Division 6 of Part 8B.6 ).

Consequences of contravention

1230F(3)    
If a CCIV redeems shares in contravention of subsection (1) or (2) :

(a)    the contravention does not affect the validity of the redemption or of any contract or transaction connected with it; and

(b)    the CCIV does not commit an offence.

Fault-based offence

1230F(4)    
A person commits an offence if the person is involved in a CCIV ' s contravention of subsection (1) or (2) and the involvement is dishonest.

Civil liability

1230F(5)    
A person who is involved in a CCIV ' s contravention of subsection (1) or (2) contravenes this subsection.

Note: This subsection is a civil penalty provision (see section 1317E ).

SECTION 1230G   FURTHER REQUIREMENTS FOR REDEMPTIONS BY RETAIL CCIVs  

Redemption must be permitted by constitution

1230G(1)    
A retail CCIV must not redeem shares if the redemption is not permitted by the CCIV ' s constitution.

Redemption price must be in accordance with constitution

1230G(2)    
A retail CCIV must not redeem shares if:

(a)    at the time of the redemption, section 1230H (about when a sub-fund is liquid) applies to the sub-fund to which the shares are referable; and

(b)    the redemption is not in accordance with the CCIV ' s constitution.

Redemption must comply with sections 1230J and 1230K if sub-fund is not liquid

1230G(3)    
A retail CCIV must not redeem shares if:

(a)    at the time of the redemption, section 1230H (about when a sub-fund is liquid) does not apply to the sub-fund to which the shares are referable; and

(b)    any of the following apply:

(i) the CCIV has not offered members an opportunity to redeem shares under section 1230J ;

(ii) the redemption is not made in satisfaction of a redemption request made in response to the offer;

(iii) the redemption does not comply with section 1230K .

Strict liability offence

1230G(4)    
An offence based on subsection (1) , (2) or (3) is an offence of strict liability.

Consequences of contravention

1230G(5)    
If a CCIV redeems shares in contravention of this section, the contravention does not affect the validity of the redemption or of any contract or transaction connected with it.

Court orders

1230G(6)    
If the Court is satisfied, on application under subsection (7) , that the consideration for a redemption of shares by a retail CCIV is not in accordance with this section, the Court may make any orders the Court considers appropriate.

1230G(7)    
An application to the Court for an order under subsection (6) may be made by any of the following:

(a)    ASIC;

(b)    the corporate director of the CCIV;

(c)    a member, or group of members, of the CCIV.

SECTION 1230H   WHEN A SUB-FUND IS LIQUID  

1230H(1)    
This section applies to a sub-fund of a CCIV at a time if liquid assets account for at least 80% of the value of the assets of the sub-fund at that time.

1230H(2)    
For the purposes of subsection (1) :

(a)    the following are liquid assets unless it is proved that the CCIV cannot reasonably expect to realise them within the period specified in the constitution for satisfying redemptions while the sub-fund is liquid:

(i) money in an account or on deposit with a bank;

(ii) bank accepted bills;

(iii) marketable securities (as defined in section 9 );

(iv) property of a kind prescribed by regulations made for the purposes of this subparagraph; and

(b)    any other property is a liquid asset if the corporate director reasonably expects that the property can be realised for its market value within the period specified in the constitution for satisfying redemptions while the sub-fund is liquid.

SECTION 1230J   REDEMPTION OFFERS FOR NON-LIQUID SUB-FUNDS OF RETAIL CCIVs  

1230J(1)    
A retail CCIV may offer members an opportunity to redeem shares in the CCIV if:

(a)    section 1230H (about when a sub-fund is liquid) does not apply to the sub-fund to which the shares are referable; and

(b)    the offer is made to the extent that particular assets of the sub-fund are available and able to be converted to money in time to satisfy redemption requests that members may make in response to the offer; and

(c)    no other redemption offer is open in relation to the sub-fund.

1230J(2)    
The redemption offer must:

(a)    be in writing; and

(b)    if the constitution of the CCIV specifies procedures for making redemption offers under this section while section 1230H does not apply to the sub-fund - be made in accordance with those procedures.

1230J(3)    
The redemption offer must specify:

(a)    the period during which the offer will remain open (this period must last for at least 21 days after the offer is made); and

(b)    the assets that will be used to satisfy redemption requests; and

(c)    the amount of money that is expected to be available when those assets are converted to money; and

(d)    the method for dealing with redemption requests if the money available is insufficient to satisfy all requests.

The method specified under paragraph (d) must comply with section 1230K .

1230J(4)    
For joint members, a copy of the redemption offer need only be given to the joint member named first in the register of members.

1230J(5)    
As soon as practicable after making the redemption offer, the CCIV must lodge a copy of the offer with ASIC.

1230J(6)    
A CCIV that makes a redemption offer under this section:

(a)    may cancel a redemption offer before it closes if the offer contains a material error; and

(b)    must cancel a redemption offer before it closes if it is in the best interests of the members of the sub-fund as a whole to do so.

1230J(7)    
If the constitution of the CCIV specifies procedures for cancelling redemption offers under subsection (6) , the cancellation must be made in accordance with those procedures.

1230J(8)    
As soon as practicable, and in any event within 2 business days, after the cancellation, the CCIV must lodge written notice of the cancellation with ASIC.

Strict liability offence

1230J(9)    
An offence based on subsection (5) or (8) is an offence of strict liability.

SECTION 1230K   SATISFYING REDEMPTION REQUESTS FOR NON-LIQUID SUB-FUNDS OF RETAIL CCIVs  

1230K(1)    
A retail CCIV that makes a redemption offer under section 1230J must ensure that redemption requests made in response to the offer are satisfied within 21 days after the offer closes.

1230K(2)    
No request made under the redemption offer may be satisfied while the offer is still open.

1230K(3)    
If an insufficient amount of money is available from the assets specified in the offer to satisfy all requests, the requests are to be satisfied proportionately in accordance with the formula:

Amount of money available	×	Amount shareholder requested to redeem
		Total of all amounts shareholders request to redeem

Subdivision C - Partly-paid shares  

SECTION 1230L  

1230L   SECTION 254N DOES NOT APPLY TO A CCIV  

Section 254N does not apply to a CCIV.

Subdivision D - Dividends  

SECTION 1230M   CIRCUMSTANCES IN WHICH A DIVIDEND MAY BE PAID  

1230M(1)    
A CCIV must not pay a dividend on a share if, immediately before the dividend is paid:

(a)    the sub-fund to which the share is referable is insolvent; or

(b)    there are reasonable grounds for suspecting that the sub-fund to which the share is referable is insolvent, or would become insolvent immediately after the dividend is paid.

Note 1: For when a sub-fund of a CCIV is solvent , or insolvent , see section 1231A .

Note 2: The directors of the corporate director have a duty to prevent insolvent trading by sub-funds: see section 588G (as modified by Division 6 of Part 8B.6 ).

1230M(2)    
Section 254T does not apply to a CCIV.

SECTION 1230N  

1230N   DIVIDEND RIGHTS  

Each share in a class of shares in a CCIV has the same dividend rights unless:

(a)    the CCIV ' s constitution provides for the shares to have different dividend rights; or

(b)    different dividend rights are provided for by special resolution of the sub-fund to which the shares are referable.

Subdivision E - Notice requirements  

SECTION 1230P  

1230P   PART 2H.6 DOES NOT APPLY TO A CCIV  

Part 2H.6 does not apply to a CCIV.

Subdivision F - Cross-investment between sub-funds of a CCIV  

SECTION 1230Q   CROSS-INVESTMENT BETWEEN SUB-FUNDS IS PERMITTED  

1230Q(1)    
Despite any law, a CCIV may acquire in respect of any of its sub-funds, one or more shares that are referable to another of its sub-funds.

Note: Requirements or restrictions may apply, see section 1230R .

1230Q(2)    
To avoid doubt, a law referred to in subsection (1) includes:

(a)    any written law; or

(b)    any unwritten law such as a principle or rule of common law or equity;

that is or has been in force anywhere in Australia or elsewhere.

SECTION 1230R   REQUIREMENTS OR RESTRICTIONS FOR CROSS-INVESTMENT  

1230R(1)    
Regulations made for the purposes of this subsection may prescribe either or both of the following:

(a)    one or more requirements for a CCIV to make an acquisition mentioned in subsection 1230Q(1) ;

(b)    one or more restrictions on a CCIV making an acquisition mentioned in subsection 1230Q(1) .

1230R(2)    
Without limiting subsection (1) , regulations made for the purposes of that subsection may prescribe requirements or restrictions in relation to one or more of the following:

(a)    all CCIVs;

(b)    a specified class of CCIVs;

(c)    all sub-funds of all CCIVs;

(d)    a specified class of sub-funds of CCIVs;

(e)    all sub-funds of a specified class of CCIVs.

SECTION 1230S   CONSEQUENCES FOR FAILING TO COMPLY WITH REQUIREMENTS OR RESTRICTIONS FOR CROSS-INVESTMENT  

1230S(1)    
A CCIV to which regulations made for the purposes of subsection 1230R(1) apply in relation to an acquisition must comply with any applicable requirements or restrictions in those regulations.

Consequences for CCIV of contravention

1230S(2)    
If a CCIV contravenes subsection (1) :

(a)    the contravention does not affect the validity of the acquisition or of any contract or transaction connected with it; and

(b)    the CCIV does not commit an offence.

Fault-based offence

1230S(3)    
A person commits an offence if the person is involved in a CCIV ' s contravention of subsection (1) and the involvement is dishonest.

Civil liability

1230S(4)    
A person who is involved in a CCIV ' s contravention of subsection (1) contravenes this subsection.

Note 1: This subsection is a civil penalty provision (see section 1317E ).

Note 2: There are other possible consequences for such a contravention, including the suspension or cancellation of an Australian financial services licence held by the CCIV ' s corporate director (see paragraph 915C(1)(a) ).

SECTION 1230T   REQUIREMENTS OR RESTRICTIONS ON MEMBERSHIP RIGHTS FOR SHARES ACQUIRED FROM CROSS-INVESTMENT  

Voting at a meeting of the CCIV ' s members

1230T(1)    
Despite any other provision of this Act, a CCIV ' s acquisition mentioned in subsection 1230Q(1) of one or more shares referable to one of its sub-funds does not entitle the CCIV to vote as a member on a resolution at a meeting of the CCIV ' s members.

Voting at a meeting of members of a sub-fund of the CCIV

1230T(2)    
A CCIV ' s acquisition mentioned in subsection 1230Q(1) of one or more shares referable to one of its sub-funds entitles the CCIV to vote as a member on a resolution at a meeting of the members of the sub-fund.

1230T(3)    
A CCIV ' s entitlement to vote as described in subsection (2) applies:

(a)    despite any other provision of this Act; but

(b)    subject to any requirements or restrictions prescribed by regulations made for the purposes of this paragraph.

SECTION 1230U  

1230U   CROSS-INVESTMENT BETWEEN SUB-FUNDS IS NOT A SHARE BUY-BACK  

For the purposes of section 1231C and Division 2 of Part 2J.1 , the acquisition by a CCIV of any of its shares is not a buy-back of the share if:

(a)    the acquisition is in respect of a sub-fund of the CCIV; and

(b)    the share is referable to another of the CCIV ' s sub-funds.

SECTION 1230V  

1230V   GENERAL DUTIES STILL APPLY FOR CROSS-INVESTMENT BETWEEN SUB-FUNDS  

None of the following:

(a)    the corporate director of a CCIV;

(b)    an officer, or employee, of the corporate director of a CCIV;

is relieved from any of their duties under this Act, or their fiduciary duties, in connection with an acquisition merely because the acquisition is permitted by this Subdivision.

Note: These duties include those in sections 180 , 181 , 182 , 183 and 184 and in Divisions 2 and 3 of Part 8B.3 .

Division 2 - Transactions affecting share capital  

Subdivision A - Reductions in share capital and share buy-backs  

SECTION 1231  

1231   PURPOSE  

Section 256A does not apply in relation to a CCIV.

SECTION 1231A   CCIV MAY MAKE REDUCTION NOT OTHERWISE AUTHORISED  

1231A(1)    
A CCIV may reduce its share capital in a way that is not otherwise authorised by law if:

(a)    the reduction is permitted by the CCIV ' s constitution; and

(b)    immediately before the reduction:

(i) each sub-fund that the reduction affects is solvent; and

(ii) there are no reasonable grounds for suspecting that any sub-fund that the reduction affects would become insolvent immediately after the reduction; and

(c)    the reduction complies with any requirements prescribed by regulations made for the purposes of this paragraph.

Note: This Subdivision also deals with some other situations (such as share redemptions) in which reductions of share capital are authorised.

When a sub-fund is solvent and insolvent

1231A(2)    
A sub-fund is solvent if, and only if, the CCIV is able to pay all the debts that are liabilities of the sub-fund, as and when they become due and payable.

Note: The liabilities of a sub-fund can only be met from assets of the sub-fund: see section 1234A .

1231A(3)    
A sub-fund that is not solvent is insolvent .

Regulations

1231A(4)    
Without limiting paragraph (1)(c) , regulations made for the purposes of that paragraph may prescribe requirements for reductions of share capital, or classes of reductions of share capital, in relation to one or more of the following:

(a)    all CCIVs;

(b)    a specified class of CCIVs;

(c)    all sub-funds of all CCIVs;

(d)    a specified class of sub-funds of CCIVs;

(e)    all sub-funds of a specified class of CCIVs.

Note: An example of a class of a reduction of share capital is an off-market share buy-back.

Certain provisions do not apply to a CCIV

1231A(5)    
Division 1 of Part 2J.1 does not apply to a CCIV.

SECTION 1231B   CONSEQUENCES OF MAKING AN UNAUTHORISED REDUCTION  

1231B(1)    
A CCIV must not make a reduction in share capital if the reduction:

(a)    does not comply with subsection 1231A(1) ; and

(b)    is not otherwise authorised by law.

1231B(2)    
If a CCIV contravenes subsection (1) :

(a)    the contravention does not affect the validity of the reduction or of any contract or transaction connected with it; and

(b)    the CCIV does not commit an offence.

Fault-based offence

1231B(3)    
A person commits an offence if the person is involved in a CCIV ' s contravention of subsection (1) and the involvement is dishonest.

Civil liability

1231B(4)    
A person who is involved in a CCIV ' s contravention of subsection (1) contravenes this subsection.

Note 1: This subsection is a civil penalty provision (see section 1317E ).

Note 2: Section 79 defines involved .

SECTION 1231C   A CCIV ' s POWER TO BUY BACK ITS OWN SHARES  

1231C(1)    
A CCIV may buy back its own shares, including redeemable shares and redeemable preference shares.

Note: Cross-investment between sub-funds is not a buy-back (see section 1230U ).

1231C(2)    
However, if the buy-back involves a reduction of share capital, the reduction must be authorised by law.

Note: A share buy-back that involves a reduction of share capital will be authorised by law if, for example, the buy-back complies with subsection 1231A(1) .

1231C(3)    
If a CCIV has entered into an agreement to buy back shares, all rights attaching to the shares are suspended. The suspension is lifted if the agreement is terminated.

1231C(4)    
A CCIV must not dispose of shares it buys back. An agreement entered into in contravention of this subsection is void.

1231C(5)    
Immediately after the registration of the transfer to the CCIV of the shares bought back, the shares are cancelled.

1231C(6)    
Division 2 of Part 2J.1 does not apply to a CCIV.

SECTION 1231D  

1231D   AUTHORISED REDUCTIONS - SHARE REDEMPTIONS  

A CCIV may reduce its share capital if:

(a)    the reduction is involved in the redemption of a redeemable share or a redeemable preference share; and

(b)    the redemption complies with section 1230F ; and

(c)    for a retail CCIV - the redemption also complies with section 1230G .

SECTION 1231E  

1231E   Authorised reductions - regulations  

A CCIV may reduce its share capital in circumstances prescribed by regulations made for the purposes of this section.

SECTION 1231F  

1231F   Authorised reductions - Court orders  

A CCIV may reduce its share capital under a Court order.

SECTION 1231G  

1231G   AUTHORISED REDUCTIONS - RETURN OF FINANCIAL PRODUCT 

A CCIV may cancel shares returned to it under Division 5 of Part 7.9 (as that Division applies to the CCIV under section 1241ZA ) and any reduction in the CCIV ' s share capital that is involved is authorised by this section.

SECTION 1231H   OTHER SHARE CAPITAL REDUCTIONS  

1231H(1)    
Division 3 of Part 2J.1 applies to a CCIV subject to the modifications set out in this section.

1231H(2)    
Section 258D applies in relation to a CCIV as if a reference to a general meeting were instead a reference to a meeting of the members of each sub-fund of the CCIV to which the shares are referable.

1231H(3)    
Sections 258E and 258F do not apply to a CCIV.

Subdivision B - Self-acquisition and control of shares  

SECTION 1231J   DIRECTLY ACQUIRING OWN SHARES  

1231J(1)    
A CCIV must not acquire shares (or units of shares) in itself except:

(a)    in buying back shares under section 1231C ; or

(b)    under a court order; or

(c)    in circumstances covered by section 1230Q (about cross-investment).

1231J(2)    
Section 259A does not apply to a CCIV.

1231J(3)    
Subject to subsection (1) , a retail CCIV may acquire and hold a share in the CCIV, but it must only do so:

(a)    for not less than the consideration that would be payable if the share were acquired by another person; and

(b)    subject to terms and conditions that would not disadvantage other members.

Note: A similar limitation applies to the corporate director of a retail CCIV: see section 1224P .

1231J(4)    
If a CCIV contravenes subsection (1) or (3) :

(a)    the contravention does not affect the validity of the acquisition or security or of any contract or transaction connected with it; and

(b)    the CCIV is not guilty of an offence.

Civil liability

1231J(5)    
Any person who is involved in a CCIV ' s contravention of subsection (1) or (3) contravenes this subsection.

Note 1: This subsection is a civil penalty provision (see section 1317E ).

Note 2: Section 79 defines involved .

Fault-based offence

1231J(6)    
A person commits an offence if they are involved in a CCIV ' s contravention of subsection (1) or (3) and the involvement is dishonest.

SECTION 1231K  

1231K   TAKING SECURITY OVER OWN SHARES  

Subsection 259B(3) (about special exemptions for financial institutions) does not apply to a CCIV.

Note: The consequences of contravening subsection 259B(1) are set out in section 259F .

Subdivision C - Financial assistance  

SECTION 1231L  

1231L   PART 2J.3 DOES NOT APPLY TO A CCIV  

Part 2J.3 does not apply to a CCIV.

Subdivision D - Interaction with other duties  

SECTION 1231M  

1231M   OTHER DUTIES STILL APPLY  

To avoid doubt, for the purposes of section 260E , the duties of a director under this Act include the duties of a corporate director under this Act, including under a provision of this Chapter.

Division 3 - Debentures  

SECTION 1231N   DEBENTURES CAN ONLY BE ISSUED IN RESPECT OF SUB-FUNDS  

1231N(1)    
A CCIV can issue a debenture only if the debenture holder ' s rights in respect of assets of the CCIV are restricted to rights in respect of the assets of one (and only one) sub-fund of the CCIV. This is the sub-fund to which the debenture is referable .

1231N(2)    
Subsection (1) limits paragraph 124(1)(b) in relation to a CCIV.

1231N(3)    
If a security interest is included in or created by a debenture or the trust deed required by section 283AB , the security interest must not be over property of the CCIV that forms part of the assets of a different sub-fund of the CCIV.

SECTION 1231P  

1231P   MODIFIED OPERATION OF SECTION 283AA  

Paragraph 283AA(1)(a) has effect in relation to a CCIV as if an offer of debentures was an offer of the kind referred to in that paragraph if the offer gave rise to an obligation to give a Product Disclosure Statement under Chapter 7 (as that Chapter applies to securities in the CCIV under Division 4 of Part 8B.7 ).

Division 4 - Financial reports, sustainability reports and audit of CCIVs  

Subdivision A - Application of Chapter 2M to CCIVs and their sub-funds  

SECTION 1232   APPLICATION OF CHAPTER 2M TO CCIVs  

Application of Chapter 2M to retail CCIVs

1232(1)    

Subject to the modifications set out in this Division, Chapter 2M (about financial reports, sustainability reports and audit) applies to a retail CCIV as if:

(a)    references in that Chapter to the directors of, or a director of, the company were instead references to the corporate director of the CCIV; and

(b)    references in that Chapter to a resolution of the directors of the company were instead references to a resolution of the corporate director, passed as director of the CCIV.

Note: Section 1228 deals with directors ' resolutions for CCIVs.

Application of Part 2M.2 to wholesale CCIVs

1232(2)    
Subject to the modifications set out in Subdivision B of this Division, Part 2M.2 (about financial records) applies to a wholesale CCIV as if references in that Part to the directors of, or a director of, the company were instead references to the corporate director of the CCIV.

Part 2M.3 does not apply to wholesale CCIVs

1232(3)    
Part 2M.3 (about financial reporting) does not apply to a wholesale CCIV.

Subdivision B - Financial records (all CCIVs)  

SECTION 1232A   OBLIGATION TO KEEP FINANCIAL RECORDS FOR SUB-FUNDS  

1232A(1)    
Without limiting the application of subsection 286(1) to the retail or wholesale CCIV, the CCIV must also, for each sub-fund of the CCIV, keep written financial records that:

(a)    correctly record and explain the transactions relating to the sub-fund and the financial position and performance of the sub-fund; and

(b)    would enable true and fair financial statements to be prepared and audited for the sub-fund; and

(c)    comply with any further requirements prescribed by regulations made for the purposes of this paragraph.

Note: Section 9 defines financial records .

1232A(2)    
The remaining provisions of Part 2M.2 apply in relation to the financial records for the sub-fund as if the sub-fund were the CCIV.

1232A(3)    
This section does not apply if the CCIV has only one sub-fund.

SECTION 1232B  

1232B   ACCESS TO FINANCIAL RECORDS OF CCIVs AND SUB-FUNDS  

Without limiting the application of subsection 290(1) or section 1232A , a director of the corporate director of the retail or wholesale CCIV has the same rights as a director of the CCIV:

(a)    under subsection 290(1) to access the financial records of the CCIV; and

(b)    under that subsection, as applied by section 1232A , to access the financial records of a sub-fund of the CCIV; and

(c)    under subsection 290(2) to apply to the Court for an order.

Subdivision C - Financial and sustainability reporting (retail CCIVs only)  

SECTION 1232C   ANNUAL FINANCIAL REPORTS, SUSTAINABILITY REPORTS AND DIRECTORS ' REPORTS FOR SUB-FUNDS - GENERAL RULES  

1232C(1)    
Division 1 of Part 2M.3 applies to a retail CCIV as if:

(a)    subsection 292(1) required the CCIV to prepare a financial report for each of its sub-funds for each financial year; and

(aa)    

in a case in which subsection 292A(1) requires the CCIV to prepare a sustainability report for a financial year - that subsection requires the CCIV to prepare a sustainability report for each of its sub-funds for the financial year; and

(b)    subsections 292(1) and 298(1) required the CCIV to prepare a directors ' report for each of its sub-funds for each financial year.

Note: The CCIV is not required to prepare such reports for the CCIV itself.

1232C(2)    
The remaining provisions of Division 1 of Part 2M.3 apply in relation to the following documents relating to each sub-fund of the retail CCIV:

(a)    

a financial report, a sustainability report and a directors ' report referred to in subsection (1) of this section;

(b)    the documents of which the financial report consists under subsection 295(1) ;

(c)    

the documents of which the sustainability report consists under subsection 296A(1) ;

as if the sub-fund were the CCIV.

Note: The combined effect of subsection 1232(1) and this subsection is that references in the remaining provisions of Division 1 of Part 2M.3 to the company are, where appropriate, to be read as referring to the sub-fund.

Example: References in the remaining provisions of Division 1 of Part 2M.3 to a listed company will be read as referring to the sub-fund if the sub-fund is listed (see also paragraph (c) of the definition of listed in section 9 ).

1232C(3)    
Without limiting subsection (2) , Division 1 of Part 2M.3 so applies as if references in that Division to members (other than references to members of an audit firm) were instead references to members of the sub-fund.

1232C(4)    
Despite subsection (2) , Division 1 of Part 2M.3 applies to the retail CCIV in relation to each of its sub-funds as if:

(a)    references in that Division to the officers of, or an officer of, the company were instead references to each of the following:

(i) an officer of the CCIV;

(ii) an officer of the corporate director of the CCIV; and

(b)    despite paragraph 1232(1)(a) , references in that Division to the directors of, or a director of, the company were instead references to each of the following:

(i) the corporate director of the CCIV;

(ii) a director of the corporate director of the CCIV.

1232C(5)    
Subparagraphs (4)(a)(i) and (b)(i) are included for the avoidance of doubt.

SECTION 1232D   ANNUAL FINANCIAL REPORTS, SUSTAINABILITY REPORTS AND DIRECTORS ' REPORTS FOR SUB-FUNDS - SPECIAL RULES FOR FINANCIAL REPORTS AND SUSTAINABILITY REPORTS  

1232D(1)    
Despite subsection 1232C(2) , paragraph 295(4)(c) applies to a directors ' declaration relating to a sub-fund referred to in subsection 1232C(1) as if the debts mentioned in that paragraph were only the debts referable to the sub-fund.

1232D(2)    
Despite subsection 1232C(2) , subsection 301(1) applies to a CCIV referred to in subsection 1232C(1) in relation to the financial report for each of its sub-funds.

1232D(2A)    

Despite subsection 1232C(2) , section 301A applies to a CCIV referred to in subsection 1232C(1) in relation to the sustainability report for each of its sub-funds.

1232D(3)    
A financial report for a sub-fund referred to in subsection 1232C(1) must comply with any further requirements prescribed by regulations made for the purposes of this subsection.

1232D(4)    

A sustainability report for a sub-fund referred to in subsection 1232C(1) must comply with any further requirements prescribed by regulations made for the purposes of this subsection.

SECTION 1232E   ANNUAL FINANCIAL REPORTS AND DIRECTORS ' REPORTS FOR SUB-FUNDS - SPECIAL RULES FOR DIRECTORS ' REPORTS  

1232E(1)    
Section 300 applies in relation to a sub-fund of a CCIV referred to in subsection 1232C(1) as if:

(a)    a reference in that section to options, shares or interests relating to the CCIV were instead a reference to options, shares or interests referable to the sub-fund; and

(b)    a reference in that section to indemnities given, or insurance premiums paid, in relation to the CCIV were instead a reference to indemnities given, or insurance premiums paid, out of the assets of the sub-fund.

Note: This translation rule applies in addition to the translation rules in subsections 1232C(2) to (4) .

1232E(2)    
Subsection 300(13) applies in relation to a sub-fund of a CCIV referred to in subsection 1232C(1) as if:

(a)    the sub-fund were a registered scheme; and

(b)    the corporate director of the CCIV were the responsible entity for the scheme; and

(c)    references in that subsection to interests in the scheme were instead references to shares in the CCIV referable to the sub-fund; and

(d)    references in that subsection to scheme property were instead references to the property of the sub-fund.

Note: This translation rule applies in addition to the translation rules in subsections 1232C(2) to (4) .

1232E(3)    
If a sub-fund of a CCIV referred to in subsection 1232C(1) is a listed sub-fund, section 300A does not apply in relation to the sub-fund.

SECTION 1232F   HALF-YEAR FINANCIAL REPORTS AND DIRECTORS ' REPORTS FOR SUB-FUNDS WITH ED SECURITIES ON ISSUE  

1232F(1)    
Section 302 does not apply to a CCIV that is a disclosing entity except as set out in this section.

1232F(2)    
If any securities referable to a sub-fund of a retail CCIV are ED securities, section 302 applies to the CCIV as if the requirement in paragraph 302(a) required the CCIV to prepare a financial report and directors ' report for each half-year for the sub-fund.

Note: For ED securities in a CCIV, see subsection 111AF(3) , and section 111AI as affected by section 1231P .

1232F(3)    
For the purposes of subsection (2) , ED securities that are units of shares in a CCIV are referable to the sub-fund of the CCIV to which the shares are referable.

1232F(4)    
The remaining provisions of Division 2 of Part 2M.3 apply in relation to the following documents relating to the sub-fund:

(a)    a financial report and directors ' report prepared under paragraph 302(a) as applied by subsection (2) of this section;

(b)    the documents of which the financial report consists under subsection 303(1) ;

as if the sub-fund were the CCIV.

Note: The combined effect of subsection 1232(1) and this subsection is that references in the remaining provisions of Division 2 of Part 2M.3 to the disclosing entity are, where appropriate, to be read as referring to the sub-fund.

1232F(5)    
Despite subsection (4) of this section, paragraph 303(4)(c) applies to a directors ' declaration relating to the sub-fund as if the debts mentioned in that paragraph were only the debts referable to the sub-fund.

1232F(6)    
Section 306 applies to the sub-fund of the CCIV as if the requirement in subsection 306(1) were instead a requirement for the directors ' report for the sub-fund for each half-year to include:

(a)    a review of the sub-fund ' s operations during the half-year and the results of those operations; and

(b)    details of:

(i) the name of each corporate director of the CCIV at any time during or since the end of the half-year, and the period for which each was the corporate director; and

(ii) the name of each director of the corporate director of the CCIV at any time during or since the end of the half-year, and the period for which each was a director of the corporate director.

SECTION 1232G   AUDIT AND AUDITOR ' S REPORT FOR SUB-FUNDS  

1232G(1)    
Subject to the modifications set out in this section, Division 3 of Part 2M.3 applies in relation to a sub-fund of a retail CCIV, and in relation to the following documents relating to the sub-fund:

(a)    a financial report prepared as described in subsection 1232C(1) ;

(aa)    

a sustainability report prepared as described in subsection 1232C(1) ;

(b)    a financial report prepared as described in section 1232F ;

as if the sub-fund were the CCIV.

Note: The combined effect of subsection 1232(1) and this subsection is that references in the remaining provisions of Division 3 of Part 2M.3 to the company are, where appropriate, to be read as referring to the sub-fund.

1232G(2)    
Without limiting subsection (1) , Division 3 of Part 2M.3 so applies as if:

(a)    references in that Division to members (other than references to members of an audit firm) were instead references to members of the sub-fund; and

(b)    references in that Division to an officer included references to an officer of the corporate director of the CCIV.

Audit

1232G(3)    
Section 307 applies in relation to the sub-fund of the CCIV as if the requirements in paragraphs 307(c) and (d) do not apply, and as if those paragraphs instead require the auditor to form an opinion about whether the CCIV has kept:

(a)    financial records, relating to the sub-fund, sufficient to enable a financial report, relating to the sub-fund, to be prepared and audited; and

(b)    other records and registers, relating to the sub-fund, as required by this Act.

Reporting to ASIC

1232G(4)    
Section 311 applies in relation to the sub-fund of the CCIV as if the requirement in paragraph 311(4)(b) were a requirement to have regard to the effect that the contravention has, or may have, on:

(a)    the overall financial position of either the CCIV or the sub-fund, or both; or

(b)    the adequacy of the information available about the overall financial position of either the CCIV or the sub-fund, or both.

Subdivision D - Annual financial reporting to members (retail CCIVs only)  

SECTION 1232H   ANNUAL FINANCIAL AND SUSTAINABILITY REPORTING TO MEMBERS OF SUB-FUNDS  

1232H(1)    

Section 314 applies to a retail CCIV, in relation to each sub-fund of the CCIV, as if the requirement in subsection 314(1) were instead a requirement to report to members of the sub-fund for the year by providing either of the following in accordance with subsection 314(1AE) :

(a)    

all of the following reports:

(i) the financial report, sustainability report and directors ' report relating to the sub-fund for the year;

(ii) the auditor ' s reports;

(b)    a concise report relating to the sub-fund for the year that complies with subsection 314(2) .

1232H(2)    
Division 4 of Part 2M.3 applies in relation to a report relating to the sub-fund as if references in that Division to members were instead references to members of the sub-fund.

SECTION 1232J  

1232J   DEADLINE FOR REPORTING TO MEMBERS OF SUB-FUNDS  

Section 315 applies to a retail CCIV in relation to the members of each sub-fund of the CCIV as if the CCIV were a registered scheme.

SECTION 1232K  

1232K   CONSIDERATION OF REPORTS AT AGM  

Section 317 does not apply in relation to a retail CCIV.

SECTION 1232L  

1232L   ADDITIONAL REPORTING BY CCIVs THAT ARE DEBENTURE ISSUERS  

If a retail CCIV was a borrower in relation to debentures at the end of a financial year, section 318 applies to the CCIV, in relation to each sub-fund of the CCIV, as if:

(a)    the requirement in subsection 318(1) were instead a requirement to give to the trustee for debenture holders, by the deadline for the financial year set by section 315 as applied by section 1232J , a copy of each of the reports mentioned in paragraph 1232H(1)(a) for the sub-fund; and

(b)    the right of a debenture holder under paragraph 318(2)(a) were instead the right to ask the CCIV for copies of the last reports provided under subsection 1232H(1) to members of the sub-fund; and

(c)    the right of a debenture holder under paragraph 318(2)(b) were instead the right to ask the CCIV for copies of:

(i) the full financial report and directors ' report described in section 1232C for the sub-fund and prepared for the last financial year; and

(ii) the auditor ' s report relating to the sub-fund for the last financial year; and

(d)    the requirement in subsection 318(4) were instead a requirement to give to the trustee for debenture holders a copy of the half-year financial report, prepared for the sub-fund under section 302 as applied by section 1232F , within 75 days after the end of the half-year.

Subdivision E - Lodging reports with ASIC (retail CCIVs only)  

SECTION 1232M  

1232M   RELODGEMENT IF FINANCIAL REPORTS, SUSTAINABILITY REPORTS OR DIRECTORS ' REPORTS RELATING TO SUB-FUND AMENDED AFTER LODGEMENT  

Section 322 applies in relation to a financial report, sustainability report or directors ' report relating to a sub-fund of a retail CCIV as if references in that section to a member were instead references to a member of the sub-fund.

Subdivision F - Appointment and removal of auditors (retail CCIVs only)  

SECTION 1232N   CONFLICT OF INTEREST SITUATION  

1232N(1)    
Subsection 324CD(2) has effect as if the following item were added to the table in that subsection:

4	a retail CCIV	the corporate director or a former corporate director of the CCIV; or
		a current or former director of the corporate director; or
		a person currently or formerly involved in the management of the CCIV; or
		a person currently or formerly involved in the management of the corporate director.

1232N(2)    
Subsection 1232(1) does not apply for the purposes of subsection 324CD(2) .

SECTION 1232P  

1232P   AUDITOR INDEPENDENCE - SPECIFIC REQUIREMENTS  

Subdivision B of Division 3 of Part 2M.4 applies in relation to a retail CCIV as if:

(a)    references in the table in subsection 324CH(1) to the audited body included references to the corporate director of the CCIV; and

(b)    references in subsection 324CH(3) and sections 324CI , 324CJ and 324CK to a listed entity do not include references to a CCIV that is a listed company.

SECTION 1232Q  

1232Q   PEOPLE WHO ARE REGARDED AS OFFICERS OF A CCIV  

Section 324CL applies in relation to a retail CCIV as if references in paragraph 324CL(1)(a) or (b) or subsection 324CL(2) , (3) or (4) to the company included references to the corporate director of the CCIV.

SECTION 1232R   APPOINTMENT, REMOVAL AND FEES OF AUDITORS FOR CCIVs  

1232R(1)    
Division 6 of Part 2M.4 (about appointment, removal and fees of auditors for companies) does not apply to a CCIV.

1232R(2)    
Division 7 of Part 2M.4 (about appointment, removal and fees of auditors for registered schemes) applies to a retail CCIV as if:

(a)    the CCIV were a registered scheme; and

(b)    the corporate director of the CCIV were the responsible entity of that scheme.

SECTION 1232S   EFFECT OF WINDING UP OF SUB-FUND ON OFFICE OF AUDITOR  

Audit and auditor ' s report not required to cover a sub-fund in respect of which a CCIV is being wound up

1232S(1)    
An auditor of a CCIV is not required by Division 3 of Part 2M.3 , as it applies under subsection 1232G(1) , to do a thing in relation to a sub-fund at a time if the sub-fund is being wound up at that time.

Auditor ceases to hold office if CCIV is being wound up in respect of all of its sub-funds

1232S(2)    
An auditor of a CCIV ceases to hold office if an event mentioned in subsection (3) has occurred in relation to each sub-fund of the CCIV.

1232S(3)    
The events are as follows:

(a)    a special resolution is passed for the voluntary winding up of a sub-fund of the CCIV;

(b)    an order is made by the Court for the winding up of a sub-fund of the CCIV.

1232S(4)    
Section 330 does not apply to a CCIV.

Subdivision G - Sanctions for contravention of Chapter 2M  

SECTION 1232T   EXTENDED LIABILITY OF DIRECTORS OF THE CORPORATE DIRECTOR FOR CONTRAVENTIONS OF CHAPTER 2M  

1232T(1)    
Section 344 applies as if each of the following were a director of a CCIV:

(a)    the corporate director of the CCIV;

(b)    a director of the corporate director of the CCIV.

Note: Section 344 creates civil and criminal liability for contraventions of certain provisions in Chapter 2M .

1232T(2)    
Paragraph (1)(a) is included for the avoidance of doubt.

Division 5 - Updating ASIC information about CCIVs  

SECTION 1232U   SOLVENCY RESOLUTIONS  

1232U(1)    
Part 2N.3 (about solvency resolutions) does not apply in relation to a CCIV.

1232U(2)    
Section 348C (about ASIC requiring a solvency resolution and statement) does not apply in relation to a CCIV.