AUSTRALIA Law and Practice Contributed by: Michael Lawson, Nicole Brown, Lizzie White and Tamaryn Leach, MinterEllison
investors. The effectiveness of such limitations has broad commercial acceptance. Despite such acceptance, the question of the legal effec - tiveness of such limitations has not been settled across Australia’s states and territories. CCIVs take the form of a company limited by shares, which means that the liability of each investor is limited to the value of their shares. The offer of interests in an Australian retail fund made to retail investors generally requires a PDS, except in certain limited circumstances. The PDS must comply with the prescribed con - tent requirements in the Corporations Act and relevant ASIC guidance and include disclosure regarding the benefits, risks and fees associated As the issuer of the Australian retail fund, the responsible entity (or corporate director in the case of a CCIV) is required to provide retail clients with specific confirmation statements. These statements are generally related to trans - actions where a retail client acquires (or redeems some or all of their already-owned) interests in the fund. Ongoing and Continuous Disclosure Requirements The issuer of an Australian retail fund will also have continuous disclosure requirements, which they must comply with under the Corporations Act. Broadly, these obligations require the issuer to disclose material changes, significant events and information that is not generally available and that a reasonable person would expect to have a material effect on the price or value of the interests in the fund (that is, influence per - 3.1.4 Disclosure Requirements Product Disclosure Statement with the fund. Confirmations
sons who commonly invest in units in deciding whether to acquire or dispose of the interests). Periodic Reporting The issuer will have certain periodic disclosure requirements where the Australian retail fund is issued to retail clients. This generally involves providing retail clients with an annual periodic report detailing certain matters concerning their investment (for example, opening and closing balances, details of transactions during the reporting period and the return on investment). Breach Reporting In addition to the above disclosure and reporting requirements, the responsible entity or corporate director, as the holder of an AFSL, will also have an obligation to notify ASIC of certain breaches or likely breaches of its obligations under the Corporations Act and relevant financial services laws. Certain changes to the breach reporting require - ments commenced in October 2021. Further minor changes took effect on 20 October 2023. Please see 4.1 Recent Developments and Pro- posals for Reform for further discussion about this. 3.2 Fund Investment 3.2.1 Types of Investors in Retail Funds Investor demand in the Australian retail funds market continues to grow, with approximately AUD485.4 billion total funds under manage - ment as of the end of December 2023 (Australian Bureau of Statistics, Managed Funds, Austral - ian, December 2023). The size and steady growth of the market are largely underpinned by the compulsory superan - nuation contribution system in Australia that was introduced in the early 1990s.
23
CHAMBERS.COM
Powered by FlippingBook