The Australian Investments and Securities Commission (ASIC) yesterday updated Regulatory Guide 134: Managed Investments: Constitutions.
The regulator has promised to take "no action" against MISs registered before 1 October this year if their constitutions fail to comply with the relevant sections of the Corporations Act – as long as they comply with the previous version of RG134.
The guidance sets out ASIC’s policy and the action it will take in relation to the constitutional provisions for an MIS.
Specifically, ASIC looked at the consideration to acquire an interest in a scheme; the powers and rights of the responsible entity; complaints handling for retail clients and wholesale clients; the withdrawal rights of members of a scheme; the winding up of a scheme, and the legal enforceability of a constitution.
In a response to submissions on the topic of MIS constitutions, ASIC pointed out that it had not reviewed its guidance on the topic since 2000 “when the managed investments regime was in its infancy”.
ASIC commissioner Greg Tanzer said the updated policy guidance would give MIS operators clarity as to how the regulator will apply its constitutional content requirements in deciding whether to register a scheme.
“Ultimately, this goes to our strategic priority of ensuring efficient registration and licensing, and aims to improve the overall efficiency and accessibility of the process,’ said Mr Tanzer.
The industry will be given a transition period of three months to allow operators of MIS and their advisers to consider the updated guidance and draft their constitutions.
“In addition, we acknowledge that for existing schemes, there may be legal, operational and cost implications in implementing changes to comply with our revised guidance,” said Mr Tanzer.
“As such, we will not require responsible entities of existing schemes to amend their constitution if it already meets the requirements of our previous policy in RG134,” he added.
