CHAPTER 8B
-
CORPORATE COLLECTIVE INVESTMENT VEHICLES
History
Ch 8B inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
PART 8B.5
-
OPERATING A CCIV
History
Pt 8B.5 inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
Division 1
-
Preliminary
History
Div 1 inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1233
1233
MEANING OF PROPERTY
In this Part:
property
of a CCIV includes PPSA retention of title property, if the security interest in the property is vested in the CCIV because of the operation of any of the following provisions:
(a)
section 267 or 267A of the
Personal Property Securities Act 2009
(property subject to unperfected security interests);
(b)
section
588FL
of this Act (collateral not registered within time).
Note: See sections
9
(definition of
property
) and
51F
(PPSA retention of title property).
History
S 1233 inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1233A
REFERENCES TO LIABILITIES OF A CCIV
1233A(1)
A reference in this Act to the liabilities of a CCIV includes a reference to:
(a)
debts of the CCIV (including contingent and prospective debts); and
(b)
expenses of the CCIV; and
(c)
anything not covered by paragraphs
(a)
and
(b)
that might give rise to a debt of the CCIV, or a claim against the CCIV (present or future, certain or contingent, ascertained or sounding only in damages).
1233A(2)
For the purposes of this Part, a liability of a CCIV arises when the circumstances giving rise to the debt, expense or claim occur.
1233A(3)
This section does not apply for the purposes of Chapter
2M
(about financial reports and audit).
History
S 1233A inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
Division 2
-
Requirement to operate sub-funds as separate businesses
History
Div 2 inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1233B
SUB-FUNDS TO BE OPERATED AS SEPARATE BUSINESSES
1233B(1)
A part of the business of a CCIV must not be operated if it is not registered as a sub-fund.
1233B(2)
A part of the business of a CCIV that is registered as a sub-fund must be operated as a separate business from the business of any other sub-fund of the CCIV.
Requirement for corporate director to operate sub-funds as separate businesses
1233B(3)
The corporate director of a CCIV contravenes this subsection if:
(a)
the corporate director operates a part of the business of the CCIV; and
(b)
the operation contravenes subsection
(1)
or
(2)
.
Fault-based offence
1233B(4)
A person commits an offence if the person contravenes subsection
(3)
.
Strict liability offence
1233B(5)
A person commits an offence of strict liability if the person contravenes subsection
(3)
.
History
S 1233B inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
Division 3
-
Requirement for assets and liabilities to be allocated between sub-funds
History
Div 3 inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
Subdivision A
-
The CCIV
'
s allocation register
History
Subdiv A inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1233C
CORPORATE DIRECTOR TO KEEP ALLOCATION REGISTER
1233C(1)
The corporate director of a CCIV must set up and maintain a register of the assets and liabilities of the sub-funds of the CCIV. The register is the CCIV
'
s allocation register.
Note: The register may be kept on computer (see section
1306
).
Strict liability offence
1233C(2)
A person commits an offence of strict liability if the person contravenes subsection
(1)
.
Corporate director must maintain allocation register during liquidation
1233C(3)
For the purposes of section
1224Q
(about exercise of powers while sub-fund in liquidation), the maintenance of the allocation register is a function the corporate director is required by this section to perform even when one or more, or all, of the sub-funds of the CCIV are being wound up.
Note: However, the corporate director may not make allocation determinations in relation to assets and liabilities while all the sub-funds are being wound up: see subsections
1233J(7)
and
1233M(7)
.
History
S 1233C inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1233D
REQUIREMENT TO ENTER ASSETS ON THE ALLOCATION REGISTER
1233D(1)
The assets of a sub-fund of a CCIV must be clearly identified in the allocation register as assets of the sub-fund.
1233D(2)
If section
1233K
(about property that has to be converted into money etc.) applies to an item of property of a CCIV:
(a)
the item of property must be clearly identified in the allocation register as an item of property to which that section applies; and
(b)
the proportion of the property applicable to each sub-fund under subsection
1233H(3)
must be clearly identified in the allocation register as the proportion applicable to the sub-fund.
1233D(3)
The corporate director must make entries in the allocation register as required in order to ensure the allocation register makes the identifications required by subsections
(1)
and
(2)
.
1233D(4)
An entry required by subsection
(3)
must be made within:
(a)
for a case where money or property is acquired by the CCIV:
(i)
5 business days after the money or property is acquired, unless subparagraph
(ii)
applies; or
(ii)
if an allocation determination is required to be made in relation to the money or property under section
1233J
-
5 business days after the determination is made; or
(b)
for a case where money or property is disposed of, or otherwise ceases to be money or property of the CCIV
-
5 business days after the disposal or cessation.
Fault-based offence
1233D(5)
A person commits an offence if:
(a)
the person is subject to a requirement under subsection
(3)
; and
(b)
the person fails to comply with the requirement.
Strict liability offence
1233D(6)
A person commits an offence of strict liability if the person contravenes subsection
(3)
.
History
S 1233D inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1233E
REQUIREMENT TO ENTER LIABILITIES ON THE ALLOCATION REGISTER
1233E(1)
The liabilities of a sub-fund of a CCIV must be clearly identified in the allocation register as liabilities of the sub-fund.
1233E(2)
If section
1233M
(about liabilities allocated to 2 or more sub-funds) applies to a liability of a CCIV:
(a)
the liability must be clearly identified in the allocation register as a liability to which that section applies; and
(b)
the proportion of the liability applicable to each sub-fund under subsection
1233L(2)
must be clearly identified in the allocation register as the proportion applicable to the sub-fund.
1233E(3)
The corporate director must make entries in the allocation register as required in order to ensure the allocation register makes the identifications required by subsections
(1)
and
(2)
.
1233E(4)
An entry required by subsection
(3)
must be made within:
(a)
for a case where a liability arises
-
5 business days after the liability arises; or
(b)
for a case where a liability is discharged, or otherwise ceases to be a liability of the sub-fund
-
5 business days after the discharge or cessation.
Note: For the liabilities of a CCIV, and when they arise, see section
1233A
.
Fault-based offence
1233E(5)
A person commits an offence if:
(a)
the person is subject to a requirement under subsection
(3)
; and
(b)
the person fails to comply with the requirement.
Strict liability offence
1233E(6)
A person commits an offence of strict liability if the person contravenes subsection
(3)
.
History
S 1233E inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1233F
LIQUIDATOR MAY REQUIRE CORPORATE DIRECTOR TO RECORD DEBT, CLAIM OR PROPERTY IN ALLOCATION REGISTER
1233F(1)
This section applies if:
(a)
a debt payable by, or claim against, a CCIV (present or future, certain or contingent, ascertained or sounding only in damages) is not entered as a liability of any sub-fund of the CCIV in the allocation register of the CCIV; or
(b)
property of the CCIV is not entered as an asset of any sub-fund of the CCIV in the allocation register of the CCIV.
1233F(2)
A liquidator of a sub-fund of the CCIV may, by notice in writing given to the corporate director of the CCIV, require the corporate director to make entries in the allocation register within the period (which must be at least one business day after the notice is given) specified in the notice.
Note: See also section
1233Q
(about Court orders the liquidator can apply for).
1233F(3)
The notice must include sufficient information to enable the corporate director to identify the debt, claim or property.
Note 1: Only liabilities of a sub-fund of a CCIV are provable in a winding up of the sub-fund: see section
1237W
.
Note 2: If the asset or liability has to be allocated between sub-funds, the corporate director will have to determine the allocation in order to update the records: see sections
1233J
and
1233M
.
1233F(4)
The corporate director must comply with the notice within the period specified.
1233F(5)
An offence based on subsection
(4)
is an offence of strict liability.
History
S 1233F inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1233G
REQUIREMENT TO RETAIN RECORDS OF ALLOCATIONS FOR 7 YEARS
1233G(1)
The corporate director must retain a record of:
(a)
entries made in the allocation register in relation to assets and liabilities of the CCIV; and
(b)
determinations made under Subdivision
B
or
C
in relation to assets and liabilities of the CCIV (including variations made under section
1233N
).
1233G(2)
The records must be retained for 7 years after the end of the year in which:
(a)
for money or property
-
the money or property is disposed of or otherwise ceases to be money or property of the CCIV; and
(b)
for a liability
-
the liability is discharged or otherwise ceases to be a liability of the CCIV.
Fault-based offence
1233G(3)
A person commits an offence if the person contravenes subsection
(1)
.
Strict liability offence
1233G(4)
A person commits an offence of strict liability if the person contravenes subsection
(1)
.
History
S 1233G inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
Subdivision B
-
What are the assets of a particular sub-fund
History
Subdiv B inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1233H
MEANING OF ASSETS
-
SUB-FUND OF A CCIV
1233H(1)
Money or property forms part of the
assets
of a sub-fund to the extent the money or property was obtained by the application of assets of the sub-fund.
Note: Division
4
of this Part requires assets of a sub-fund to be applied only for purposes relating to the sub-fund.
1233H(2)
Subject to subsection
(1)
, the
assets
of a sub-fund of a CCIV at a particular time are the following:
(a)
amounts paid up in consideration for the issue of shares that are referable to the sub-fund;
(b)
money deposited with or lent to the CCIV under debentures that are referable to the sub-fund;
(c)
shares acquired by the CCIV in respect of the sub-fund that are shares in the CCIV that are referable to another of the CCIV
'
s sub-funds;
(d)
money or property of the CCIV not covered by paragraph
(a)
,
(b)
or
(c)
, to the extent the money or property, at the time it is acquired, relates solely to the business of the sub-fund;
(e)
if there is money or property of the CCIV not covered by paragraph
(a)
,
(b)
,
(c)
or
(d)
at the time it is acquired
-
the proportion (which may be nil) of the money or property that it is fair and reasonable, in the circumstances, to allocate to the sub-fund at that time.
Effect of an allocation determination
1233H(3)
Despite subsections
(1)
and
(2)
, if:
(a)
the corporate director of a CCIV determines under section
1233J
that a particular proportion of certain money or property of a CCIV is allocated to a sub-fund of the CCIV; and
(b)
the determination is operative (see subsection
1233J(4)
);
that proportion of the money or property is taken to form part of the
assets
of the sub-fund, and to have been part of the
assets
of the sub-fund from the time the money or property was acquired.
Note: If there is a single item of property that forms part of the assets of 2 or more sub-funds, it may not be held by the CCIV as an investment but must instead be converted into money or other fungible assets (see section
1233K
).
Effect of a Court order about an arrangement or reconstruction
1233H(4)
Despite subsections
(1)
,
(2)
and
(3)
, the assets of a sub-fund of a CCIV:
(a)
include assets that, in accordance with a Court order made under section
1235F
(about arrangements and reconstructions of sub-funds), are to be assets of the sub-fund; and
(b)
do not include assets that, in accordance with an order made under that section, are no longer to be assets of the sub-fund.
Note: Subsection
(1)
of this section applies to money or property obtained by the application of these assets of a sub-fund.
Regulations
1233H(5)
The regulations may provide for and in relation to matters to be considered in determining the extent to which money or property of a CCIV forms part of the assets of a sub-fund of the CCIV.
History
S 1233H inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1233J
WHEN AN ALLOCATION DETERMINATION IS REQUIRED
1233J(1)
This section applies if money or property acquired by a CCIV in a single transaction does not become wholly part of the assets of a single sub-fund of the CCIV under section
1233H
.
1233J(2)
The corporate director must determine (whether in the CCIV
'
s allocation register or otherwise in writing) the proportion (including nil) of the money or property that is to be allocated to each sub-fund of the CCIV.
Requirements for determination
1233J(3)
The determination:
(a)
must be fair and reasonable in the circumstances and having regard to section
1233H
; and
(b)
must result in the money or property being wholly allocated; and
(c)
must be made as soon as practicable after the money or property is acquired.
When the determination is operative
1233J(4)
If the determination is one that a reasonable person in the corporate director
'
s position could make, the determination is operative from the time the money or property is acquired, which may be earlier than the time at which the determination is made.
1233J(5)
A determination under this section is irrevocable.
Fault-based offence
1233J(6)
A person commits an offence if:
(a)
the person is subject to a requirement under this section; and
(b)
the person fails to comply with the requirement.
Determinations during winding up and controllership
1233J(7)
Subsection
(2)
does not apply if all of the CCIV
'
s sub-funds are being wound up.
1233J(8)
Despite subsection
13.3(3)
of the
Criminal Code
, in a prosecution for an offence based on subsection
(6)
of this section, a defendant does not bear an evidential burden in relation to the matter in subsection
(7)
.
1233J(9)
A liquidator of a sub-fund of a CCIV, or a receiver of property of a sub-fund of a CCIV, may not make a determination under this section.
Note: A liquidator may apply to the Court for an order under section
1233Q
.
History
S 1233J inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1233K
WHEN PROPERTY MUST BE CONVERTED INTO MONEY ETC.
1233K(1)
This section applies if, as a result of the operation of section
1233H
, a single item of property of a CCIV forms part of the assets of 2 or more sub-funds of the CCIV.
1233K(2)
For the purposes of subsection
(1)
, treat an item of property as a single item if the item would generally be applied or dealt with as an indivisible item in the ordinary course of commercial dealing.
Note: An example of a single item of property is a share or unit in a unit trust.
1233K(3)
The corporate director of the CCIV must apply the item of property to obtain other money or fungible property, so as to achieve the result that, when subsection
1233H(1)
is applied to the other money or property to determine the extent to which it forms part of the assets of the sub-funds, no single item of property forms part of the assets of 2 or more sub-funds.
Note: This conversion is intended to ensure that the assets of a sub-fund can be kept separate and distinct from the assets of other sub-funds.
1233K(4)
The conversion required by subsection
(3)
must be completed as soon as practicable after the item of property is acquired.
Fault-based offence
1233K(5)
A person commits an offence if:
(a)
the person is subject to a requirement under this section; and
(b)
the person fails to comply with the requirement.
History
S 1233K inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
Subdivision C
-
What are the liabilities of a particular sub-fund
History
Subdiv C inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1233L
MEANING OF LIABILITIES
-
SUB-FUND OF A CCIV
1233L(1)
The
liabilities
of a sub-fund of a CCIV at a particular time are the following:
(a)
liabilities of the CCIV that relate solely to the business of the sub-fund;
(b)
liabilities of the CCIV not covered by paragraph
(a)
, to the extent that it is fair and reasonable in the circumstances to allocate the liability to the sub-fund at the time having regard to the following matters:
(i)
the extent to which the liability, when it arose, related to the business of the sub-fund;
(ii)
the extent to which assets of the sub-fund, and assets of other sub-funds, of the CCIV have been applied to meet the liability;
(iii)
the regulations (if any) made for the purposes of subsection
(4)
.
Note: Section
1233A
is about references to the liabilities of a CCIV.
Effect of an allocation determination
1233L(2)
Despite subsection
(1)
, if:
(a)
a particular proportion of a liability of a CCIV is allocated to a sub-fund of the CCIV at a time under a determination made under section
1233M
(including a determination as varied under section
1233N
); and
(b)
the determination is operative at the time (see subsection
1233M(4)
);
that proportion of the liability is taken to form part of the
liabilities
of the sub-fund at that time.
Effect of a Court order about an arrangement or reconstruction
1233L(3)
Despite subsections
(1)
and
(2)
, the
liabilities
of a sub-fund of a CCIV:
(a)
include liabilities that, in accordance with a Court order made under section
1235F
(about arrangements and reconstructions of sub-funds), are to be liabilities of the sub-fund; and
(b)
do not include liabilities that, in accordance with an order made under that section, are no longer to be liabilities of the sub-fund.
Regulations
1233L(4)
The regulations may provide for and in relation to matters to be considered in determining the extent to which a liability of a CCIV forms part of the liabilities of a sub-fund of the CCIV.
History
S 1233L inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1233M
WHEN AN ALLOCATION DETERMINATION IS REQUIRED
1233M(1)
This section applies if a liability of a CCIV does not relate solely to the business of one sub-fund of the CCIV.
1233M(2)
The corporate director must determine (whether in the CCIV
'
s allocation register or otherwise in writing) the proportion (including nil) of the liability that is to be allocated to each sub-fund of the CCIV.
Requirements for determination
1233M(3)
The determination:
(a)
must be fair and reasonable in the circumstances and having regard to the matters referred to in paragraph
1233L(1)(b)
; and
(b)
must result in the liability being wholly allocated; and
(c)
must be made as soon as practicable after the liability arises; and
(d)
must be expressed to apply from the time the liability arises (which may be earlier than the time at which the determination is made).
When the determination is operative
1233M(4)
A determination under this section (including a determination as varied under section
1233N
) is operative at a time if:
(a)
the determination applies at that time; and
(b)
the determination is one that a reasonable person in the corporate director
'
s position could make.
1233M(5)
A determination under this section is irrevocable, however it may be varied under section
1233N
even if it has become inoperative.
Fault-based offence
1233M(6)
A person commits an offence if:
(a)
the person is subject to a requirement under this section; and
(b)
the person fails to comply with the requirement.
Determinations during winding up and controllership
1233M(7)
Subsection
(1)
does not apply if all of the CCIV
'
s sub-funds are being wound up.
1233M(8)
Despite subsection
13.3(3)
of the
Criminal Code
, in a prosecution for an offence based on subsection
(6)
of this section, a defendant does not bear an evidential burden in relation to the matter in subsection
(7)
.
1233M(9)
A liquidator of a sub-fund of a CCIV, or a receiver of property of a sub-fund of a CCIV, may not make a determination under this section.
Note: A liquidator may apply to the Court for an order under section
1233Q
.
History
S 1233M inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1233N
VARIATIONS OF PROPORTIONAL ALLOCATION OF LIABILITIES
1233N(1)
The corporate director may vary a determination made under section
1233M
if it is necessary to do so to ensure that the determination remains operative for the purposes of subsection
1233M(4)
.
1233N(2)
If, as a result of a change in circumstances, a determination has or will become inoperative, the corporate director must vary the determination as soon as is practicable.
Note: The variation may take effect retrospectively to make operative a determination that has become inoperative: see paragraph
(3)(b)
.
1233N(3)
The variation:
(a)
must be fair and reasonable in the circumstances and having regard to:
(i)
the matters referred to in paragraph
1233L(1)(b)
; and
(ii)
the time at which it starts to apply; and
(b)
must specify the time at which it starts to apply, which may be earlier or later than the time at which the variation is made; and
(c)
must result in the liability being wholly allocated; and
(d)
must be made in writing.
Effect of variation
1233N(4)
The variation takes effect from the time at which it starts to apply.
Fault-based offences
1233N(5)
A person commits an offence if:
(a)
the person is subject to a requirement under subsection
(2)
; and
(b)
the person fails to comply with the requirement.
History
S 1233N inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1233P
CREDITOR MAY REQUIRE CORPORATE DIRECTOR TO PROVIDE INFORMATION ABOUT ALLOCATION
1233P(1)
A creditor of a CCIV may, by notice in writing given to the corporate director of the CCIV, require the corporate director to provide the creditor with the following information about the debt owing to the creditor:
(a)
the sub-fund or sub-funds of the CCIV of which the debt is a liability;
(b)
if the debt is a liability of 2 or more sub-funds of the CCIV
-
the proportion of the debt allocated to each sub-fund;
within the period (which must be at least 14 days after the notice is given), and in the manner, specified in the notice.
1233P(2)
The notice must include sufficient information to enable the corporate director to identify the debt.
Strict liability offence
1233P(3)
A person commits an offence of strict liability if the person fails to comply with a notice given to the person in accordance with subsection
(1)
.
History
S 1233P inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
Subdivision D
-
Orders the Court can make
History
Subdiv D inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1233Q
ORDERS THE COURT CAN MAKE IN RELATION TO ASSETS AND LIABILITIES OF SUB-FUNDS
1233Q(1)
The Court may, on an application under subsection
(3)
, make any orders, and give any directions, that the Court considers appropriate in relation to the assets and liabilities of the sub-funds of a CCIV, including any of the following:
(a)
an order requiring the corporate director to update or correct the CCIV
'
s allocation register;
(b)
an order declaring that money or property of a CCIV forms part of the assets of a particular sub-fund of the CCIV;
(c)
an order declaring that a determination made by the corporate director under section
1233J
is not operative;
(d)
an order requiring the corporate director to make one or more determinations under section
1233J
;
(e)
an order declaring the extent to which the money or property forms part of the assets of each sub-fund of the CCIV;
(f)
an order declaring that a liability of a CCIV forms part of the liabilities of a particular sub-fund of the CCIV;
(g)
an order declaring that a determination made by the corporate director under section
1233M
(including a determination as varied under section
1233N
), is not operative;
(h)
an order requiring the corporate director to make one or more determinations under section
1233M
, or to vary a determination under section
1233N
;
(i)
an order declaring the extent to which a liability forms part of the liabilities of each sub-fund of the CCIV at a time.
1233Q(2)
The Court may make an order or give directions under subsection
(1)
if any of the following applies:
(a)
the Court is satisfied a determination made by the corporate director under section
1233J
or
1233M
(including a determination varied under section
1233N
) is not operative;
(b)
the Court is satisfied that the CCIV
'
s allocation register is otherwise incorrect or deficient;
(c)
all of the CCIV
'
s sub-funds are being wound up.
1233Q(3)
An application for an order or directions under subsection
(1)
may be made by any of the following:
(a)
the corporate director of the CCIV;
(b)
a liquidator of a sub-fund of the CCIV;
(c)
a controller of property of a sub-fund of the CCIV.
1233Q(4)
If the Court makes an order under paragraph
(1)(b)
,
(e)
or
(i)
, the corporate director does not have the power under section
1233J
,
1233M
or
1233N
(as the case requires) to make a determination that is inconsistent with the order unless:
(a)
the order states that the corporate director does have the power to make an inconsistent determination; or
(b)
the corporate director first obtains the leave of the Court.
History
S 1233Q inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
Division 4
-
Purposes for which sub-fund assets may be applied
History
Div 4 inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1234
1234
UNALLOCATED MONEY AND PROPERTY MAY NOT BE APPLIED FOR ANY PURPOSE
Money or property of a CCIV that has not been clearly identified in the CCIV
'
s allocation register as forming part of the assets of a sub-fund or sub-funds of the CCIV may not be applied, or dealt with, whether directly or indirectly, for any purpose.
History
S 1234 inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1234A
REQUIREMENT FOR SEGREGATED APPLICATION OF ASSETS OF SUB-FUNDS
1234A(1)
The assets of a sub-fund of a CCIV must not be applied, or dealt with, whether directly or indirectly:
(a)
subject to paragraph
(b)
, for any purpose other than a purpose covered by section
1234B
; or
(b)
for a purpose prescribed by regulations made for the purposes of this paragraph.
Note: For the consequences of a contravention of this requirement, see section
1234F
.
1234A(2)
Subsection
(1)
does not apply to:
(a)
money or property to which section
1234
applies; or
(b)
assets of a sub-fund of the CCIV, to the extent the assets consist of property to which section
1233K
(about property that has to be converted into money etc.) applies.
Note: For paragraph
(b)
, see instead section
1234C
.
1234A(3)
The assets of 2 or more sub-funds of a CCIV must not be applied jointly to acquire a single item of property of the CCIV.
Note: A single item of property that forms part of the assets of 2 or more sub-funds must be converted into money or other fungible property: see section
1233K
.
Liquidators
1234A(4)
However, a liquidator or provisional liquidator of a sub-fund of a CCIV may:
(a)
make a disposition of assets of the sub-fund that is an exempt disposition for the purposes of subsection
468(2)
, as that subsection applies to the sub-fund under Division
5
of Part
8B.6
; or
(b)
disclaim property of a sub-fund under Division
7A
of Part
5.6
, as that Division applies to the sub-fund under Division
5
of Part
8B.6
.
History
S 1234A inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1234B
1234B
PURPOSES FOR WHICH SUB-FUND ASSETS MAY BE APPLIED
This section covers the following purposes:
(a)
meeting liabilities of the sub-fund;
(b)
carrying on the business of the sub-fund;
(c)
paying a dividend to members of the sub-fund;
(d)
providing consideration to a member of the sub-fund in respect of a reduction of share capital affecting the sub-fund;
(e)
redeeming redeemable shares or redeemable preference shares that are referable to the sub-fund;
(f)
making a payment covered by section
1237Y
(about winding up);
(g)
making a payment covered by section
1236K
(about certain priority payments by a receiver);
(h)
complying with a compromise or arrangement relating to the sub-fund and approved by the Court under paragraph
411(4)(b)
, or an order made under section
413
in relation to such a compromise or arrangement;
(i)
making any other distribution to members of the sub-fund that the CCIV is permitted by this Act and its constitution to make;
(j)
a purpose prescribed by regulations made for the purposes of this paragraph.
Note: The assets may also be applied in accordance with a court order: see subsection
1234E(2)
.
History
S 1234B inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1234C
1234C
PROPERTY THAT IS REQUIRED TO BE CONVERTED TO BE APPLIED ONLY FOR THAT PURPOSE
An item of property of a CCIV to which section
1233K
applies may not be applied for any purpose, except for the purpose of the conversion required by that section.
Note: For the consequences of a contravention of this requirement, see section
1234F
.
History
S 1234C inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1234D
1234D
REQUIREMENT FOR SECURITY INTERESTS TO BE SEGREGATED
A CCIV must not grant a security interest in personal property of the CCIV if the personal property comprises assets of 2 or more sub-funds of the CCIV.
Note: For the consequences of a contravention of this requirement, see section
1234F
.
History
S 1234D inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1234E
COURT ORDERS
1234E(1)
In a proceeding to which a CCIV is a party, a court must not make an order that is inconsistent with section
1234
,
1234A
,
1234C
or
1234D
, unless the court considers that the interests of justice require it to do so.
1234E(2)
If a court makes an order that is inconsistent with section
1234
,
1234A
,
1234C
or
1234D
, the assets of a sub-fund must be applied for the purpose of complying with the court order, in priority to any other permitted application of the assets.
History
S 1234E inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1234F
CONSEQUENCES OF NON-COMPLIANT APPLICATION OF ASSETS
1234F(1)
If money or property of a CCIV is applied or dealt with in contravention of section
1234
,
1234A
,
1234C
or
1234D
, the contravention does not affect the validity of any contract or transaction connected with the application or dealing.
Note: A Court may order an injunction to stop the CCIV applying or dealing with the asset (see section1324
).
1234F(2)
A CCIV contravenes this subsection if:
(a)
the CCIV applies or deals with money or property of the CCIV; and
(b)
the application or dealing contravenes section
1234
,
1234A
,
1234C
or
1234D
.
Fault-based offence
1234F(3)
A person commits an offence if the person contravenes subsection
(2)
.
Strict liability offence
1234F(4)
A person commits an offence of strict liability if the person contravenes subsection
(2)
.
History
S 1234F inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
Division 5
-
How CCIV assets must be held
History
Div 5 inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1234G
WHO MAY HOLD THE ASSETS OF A CCIV
1234G(1)
The money and property of a CCIV may be held by the CCIV or another person.
1234G(2)
Subsection
(1)
is subject to the regulations made for the purposes of this subsection.
Note: This Division contains requirements for holding the money and property of a CCIV. Further requirements that apply to a CCIV or another person who holds such assets may be prescribed by regulations made for the purposes of subsection
(2)
.
History
S 1234G inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1234H
PERSON OTHER THAN CCIV HOLDS MONEY OR PROPERTY ON TRUST
1234H(1)
A person other than the CCIV who holds money or property of the CCIV is taken to hold the money or property on trust for the CCIV.
1234H(2)
To avoid doubt, nothing in this Chapter is intended to have the effect of making a CCIV or its corporate director a trustee or trustees of the money or property of the CCIV.
History
S 1234H inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1234J
HOW CCIV MONEY AND PROPERTY MUST BE HELD
1234J(1)
A person who holds assets of a sub-fund of a CCIV that have been clearly identified as such in the CCIV
'
s allocation register must hold the assets separately from any other property (including from assets of any other sub-fund of the CCIV).
Note: This subsection is a civil penalty provision (see section
1317E
).
1234J(2)
A person who holds money or property of a CCIV that has not yet been clearly identified in the CCIV
'
s allocation register as forming part of the assets of a sub-fund or sub-funds of the CCIV must hold that money or property separately from any other property.
Note: This subsection is a civil penalty provision (see section
1317E
).
1234J(3)
Despite subsection
(1)
, a person who holds an item of property of a CCIV to which section
1233K
(about property that has to be converted into money etc.) applies must hold that item of property separately from any other property.
Note: This subsection is a civil penalty provision (see section
1317E
).
1234J(4)
Subsections
(1)
,
(2)
and
(3)
are subject to the regulations made for the purposes of this subsection.
Strict liability offence
1234J(5)
An offence based on subsection
(1)
,
(2)
or
(3)
is an offence of strict liability.
History
S 1234J inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).
SECTION 1234K
REGULATIONS MAY CREATE EXCEPTIONS
1234K(1)
The regulations may provide that prescribed classes of assets:
(a)
are assets to which the provisions of this Division do not apply; or
(b)
are assets to which prescribed provisions of this Division do not apply.
1234K(2)
The regulations may make provision in relation to the holding of assets of a sub-fund of a CCIV that are in a class of assets prescribed by the regulations for the purposes of subsection
(1)
.
1234K(3)
Without limiting subsection
(1)
, regulations made for the purposes of that subsection may prescribe assets that are held outside of Australia in prescribed circumstances as a class of assets.
History
S 1234K inserted by No 8 of 2022, s 3, Sch 1
[
4] (effective 1 July 2022).