Overview of Corporate Collective Investment Vehicles (CCIV) – Fund Management/REIT

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Traditionally, overseas investors’ lack of familiarity with the trust-based structure of Australian managed investment schemes has been seen as a significant impediment to attracting overseas investment to Australian funds.

To combat this, from 1 July 2022 fund managers will be able to register corporate collective investment vehicles (CCVI) with ASICs.

Key points to remember

  • A CCIV is an alternative to a managed investment fund.

  • A CCIV may offer several products (compartments) and investment strategies within the same vehicle.

  • A CCIV must have a company director, whose role is comparable to that of an entity responsible for a managed UCITS.

What is a CCIV?

A CCIV is an alternative to a managed investment system and has important similarities to investment vehicles commonly used overseas. It is hoped that these similarities will make Australian funds more attractive to overseas investors and increase the competitiveness of the Australian fund management industry.

A CCIV has many similarities with a company:

  • it is a company limited by shares and must be registered with ASIC;

  • it has a separate legal identity and will be governed by the Corporations Act;

  • it must have a constitution (like managed investment funds, these are subject to prescribed consent rules); and

  • it will have most of the powers, rights, duties and characteristics of a corporation.

A CCIV may offer several products (compartments) and investment strategies within the same vehicle. A CCIV will need to have at least one compartment and each compartment must be registered with ASIC and have a member.

Each compartment will be separated from the other compartments of the CCIV. Thus, the investor will hold an investment in a specific sub-fund of the CCIV and will receive returns according to his share of capital in this sub-fund.

A CCIV can be either a retail or a wholesale CCIV. The usual additional consumer protection obligations will apply if it is a retail CCIV.

A CCIV must have a company director – an unlisted public limited company – whose role is comparable to that of an entity responsible for a managed UCITS. The company director must hold an Australian Financial Services License (AFSL) which authorizes the corporate officer to ‘operate the business and conduct the business of the CCIV’. This is a new AFSL authorization specifically created for CCIVs.

As 1 July 2022 approaches, we will take a closer look at the CCIV regime and the practical issues that may arise for Australian fund managers.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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