Corporate Collective Investment Vehicle - tranche two

Overview

The Government has released for public consultation the second tranche of the Treasury Laws Amendment (Corporate Collective Investment Vehicle) Bill 2018 and explanatory materials. 

The Corporate Collective Investment Vehicle (CCIV) will offer an internationally recognisable investment vehicle which can be readily marketed to foreign investors, including through the Asia Region Funds Passport.

The Government previously released the tranche 1 draft Bill for consultation on 13 June 2018. Submissions for tranche 1 closed on 18 July 2018.

The tranche 2 exposure draft includes:

• External administration of a CCIV in a winding up situation. This involves winding up on a sub-fund-by-sub-fund basis by treating the CCIV in a winding up situation as if it is comprised only of the sub-fund in respect of which the CCIV is wound up.
• The application of the Chapter 7 financial services regime to CCIVs. Chapter 7 will generally apply to CCIVs and corporate directors in the same way as it applies to other companies, with some modifications to take into account the unique structure of a CCIV and ensure parity with the requirements for registered schemes. In particular, the corporate director must have an AFSL that covers both its operations and the operations of the CCIV.
• The liability of the corporate director of a CCIV for contraventions of the law by the CCIV. The provisions clarify how a contravention of a law of the Commonwealth by a CCIV is established. The provisions also re-route offences and penalties committed by the CCIV, and the associated penalty, to the corporate director (so members of a CCIV do not suffer loss). 
• The explanatory materials also include a detailed description of the proposed penalties framework for CCIVs (including the proposed penalties for a contravention of a provision in the new Chapter 8B) and the proposed approach to takeovers, compulsory acquisitions and buy-outs of a CCIV. The provisions for these aspects of the Bill are under development.