Corporations Act 2001

CHAPTER 8B - CORPORATE COLLECTIVE INVESTMENT VEHICLES  

PART 8B.5 - OPERATING A CCIV  

Division 1 - Preliminary  

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).

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).

Division 2 - Requirement to operate sub-funds as separate businesses  

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) .

Division 3 - Requirement for assets and liabilities to be allocated between sub-funds  

Subdivision A - The CCIV ' s allocation register  

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) .

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) .

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) .

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.

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) .

Subdivision B - What are the assets of a particular sub-fund  

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.

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 .

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.

Subdivision C - What are the liabilities of a particular sub-fund  

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.

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 .

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.

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) .

Subdivision D - Orders the Court can make  

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.

Division 4 - Purposes for which sub-fund assets may be applied  

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.

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 .

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) .

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 .

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 .

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.

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) .

Division 5 - How CCIV assets must be held  

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) .

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.

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.

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.