AUSTRALIA Law and Practice Contributed by: Andrew Stone, Dhanushka Jayawardena, Andrew Choi and Chris Kinsella, Holding Redlich
son for this is the responsible entity of a registered managed investment scheme is subject to a statutory obligation to treat members who hold interests in the fund in the same class equally. 4.3 Marketing of Alternative Funds to Investors The marketing of alternative funds to Australian inves - tors requires the person who engages in the marketing to hold an AFSL or to benefit from a relevant exemp - tion from the requirement. The conditions on which a person holds an AFSL, or benefits from a relevant exemption, will specify wheth - er marketing by the person to wholesale clients or to retail clients (or to both) is permitted. Local investors, both wholesale clients and retail clients, are permitted to invest in alternative funds established in Australia. Fund product issuers and distributors must comply with the financial product “design and distribution obligations” laws. Generally, this requires those issu - ing interests to identify the class of retail clients that comprise the “target market” for the interests (that is, persons in respect of whom the interest is consist - ent with their likely objectives, financial situation and needs) and create a target market determination for the interests. The person who made the target market determination must take reasonable steps that will, or are likely to, result in distribution of the interests being consistent with the determination. 4.4 Rules Concerning Marketing of Alternative Funds In addition to the rules specified in 4.3 Marketing of Alternative Funds to Investors , interests in funds marketed to investors who are retail clients must be offered under a regulated product disclosure state - ment (PDS). The content of a PDS is specified under Australian legislation and must include features and benefits of the product, risks of the product, fees and costs, and ESG-related disclosures. Notice must be lodged with ASIC within five business days of a PDS being first given to a retail client. Interests in funds that are marketed to investors who are wholesale clients are not required to be offered under a PDS. An information memorandum (IM) is
typically used. The content of an IM is not prescribed by law but the issuers must ensure they do not make false or misleading statements nor engage in mislead - ing or deceptive conduct. Those involved in the marketing of fund interests (whether via a PDS, an IM or via other marketing col - lateral) must not make false or misleading statements or engage in misleading or deceptive conduct. In rela - tion to these obligations, ASIC has issued the follow - ing regulatory guidance: • Regulatory Guide 234 Advertising financial prod - ucts and services (including credit): Good practice guidance (“RG 234”); • Regulatory Guide 53 The use of past performance in promotional material (“RG 53”); and • Regulatory Guide 170 Prospective financial infor - mation (“RG 170”). RG 234, RG 53 and RG 170 are referenced broadly within the industry as part of approval processes fol - lowed before marketing collateral is issued. 4.5 High Net Worth or Retail Investors Alternative investment managers can potentially implement a range of distribution strategies focused on high net worth or retail investors in Australia. Some of these are outlined here. For high net worth or wholesale clients: • direct distribution – via family offices and private wealth managers who service ultra high net worth families, or via private client teams at major banks, or via independent financial advisers specialising in alternative investments; • institutional platforms – multi-manager platforms providing capital raising services, as well as private wealth platforms and dealer group platforms that provide access to alternative strategies; • placement agents who may provide bespoke capi - tal raising, strategic advice and related services; and • self-managed super funds that allow members to access alternative investments, as well as model portfolio providers who may service those funds.
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