AUSTRALIA Law and Practice Contributed by: Michael Lawson, Nicole Brown, Lizzie White and Tamaryn Leach, MinterEllison
and therefore, any contracts relating to the fund will be entered into by the responsible entity. This can give rise to some additional complexities when applying the insolvency rules. CCIVs Amendments to the Corporations Act in 2022 have facilitated the emergence of an alternative fund vehicle to the unit trust, namely the CCIV. Please refer to 2.2.2 Legal Structures Used by Fund Managers for further information. 3.1.2 Common Process for Setting Up Investment Funds Registration Requirement A retail fund in Australia will generally be required to be registered with ASIC as a managed invest - ment scheme in accordance with Chapter 5C of the Corporations Act unless all investors are wholesale clients. Wholesale clients include: • professional investors (for example, AFSL holders, trustees of superannuation funds with net assets of at least AUD10 million, or entities regulated by the Australian Prudential Regulation Authority); • sophisticated investors (ie, persons regarded as having sufficient experience to assess the relevant investment); • investors investing at least AUD500,000; and • investors who met the requisite wealth test of net assets of AUD2.5 million or gross income of AUD250,000 in each of the previous two years. Investors who do not satisfy one of the whole - sale client tests are considered retail clients. CCIVs and their sub-funds are also subject to a registration requirement under the Corporations
Act, although it applies to retail and wholesale CCIVs. Process and Documentation Required To register a fund with ASIC, the responsible entity must lodge the following documentation with ASIC: • a prescribed form including details of the responsible entity, fund, the auditor and com - pliance plan auditor; • the constitution (ie, the trust deed) for the fund, which complies with the prescribed requirements in the Corporations Act and relevant ASIC guidance; and • a compliance plan for the fund, which follows the prescribed requirements set out in the Corporations Act and relevant ASIC guid - ance. Once an application for registration has been lodged with ASIC, ASIC has a statutory 14-day period to consider the application and register the fund or reject the application. During the 14-day registration period, ASIC will generally respond with queries and comments in relation to the constitution and compliance plan. Despite the prescribed requirements for consti - tutions and compliance plans, the cost of pre - paring and lodging these documents with ASIC for registration is reasonable. The registration process and documentation for a CCIV and its sub-funds are similar and include lodgement of the CCIV’s constitution and, in the case of a CCIV offered to retail clients, the com - pliance plan. 3.1.3 Limited Liability The trust deed for most unit trusts includes what is, in effect, a contractual limitation of liability of
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