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June 13, 2011 at 1:40 pm #2369
If there are less than 20 members in a unit trust structure and total ceiling is less than 2 million, does one require to register the invesment scheme with ASIC ?. Is a Product disclosure statement (PDS) required or an AFSL required in order for the fund managers to charge a fee and pool funds from the different members and make investments in the ASX.
The licensing and registration seem to be two different things and ASIC website is not very clear
ManishJune 27, 2011 at 6:50 am #3046
You are correct that the licensing and the registration are seperate areas. The question of whether you require an AFSL, if a managed investment scheme (MIS) must be registered and the requirement to issue a PDS are interrelated but all need to be addressed seperately.
An entity (either a person or a corporate entity) will generally require an AFSL if they carry on a financial services business within Australia under s911A of the Corporations Act 2001. This generally includes operating a MIS and dealing in interests in a MIS. You are exempt from this requirement if you act as a representative of an AFSL licensee.
A MIS may not have to be registered if it has less than 20 members and the entity promoting the scheme is not in the business of promoting such schemes (see s301ED of the Corporations Act 2001). A MIS also doesn’t need to be registered if the issue of interests in the MIS does not require a PDS.
A MIS may not require a PDS to be issued if the scheme is offered soley to wholesale investors or if it does not breach 20 purchasers or $2 million within a 12 month period and is offered by personal offer only (see s1012E of the Corporations Act 2001).
There are exemptions to each of these requirements depending on your business. We recommend seeking independent legal advice to ensure you are meeting all of your requirements prior to embarking on a new business venture.
Please feel free to contact us if you require further clarification.
Author: Tim Nethercote
Co-contributor: Megan Jaksa