Natalie Raju and Jamie Levy discuss the merits of the Federal Government's proposed corporate collective investment vehicle (CCIV) regime.
The Stereo MCs, who had a strong following in their day, were going to get connected. Nowadays, with the Federal Government's proposed corporate collective investment vehicle (CCIV) regime we are going to get collective instead.
Australia’s ability to attract foreign investment has for many years been sub-optimal due to the reluctance of certain overseas investors to put their money into trust structures.The CCIV regime would create an alternative for Australian investment outside of traditional trust structures. This has the potential to improve the international competitiveness of Australian fund managers, and to simplify some inbound Australian investment structures. Exposure draft legislation was released in late August 2017 for public comment.
However, it is unclear how extensively the CCIV will be used, unless its features allow it to:
Certain features of the proposed wholesale CCIV regime (including, for example, the requirement for the corporate director to be an Australian public company that is registered as a CCIV and that is subject to restrictions that the trustee of a wholesale MIS is not subject to) would present additional cost and complexity compared to the current requirements for a wholesale MIS.
For a retail fund, the requirement to have a separate and independent depositary entity with supervisory responsibilities, in addition to the corporate director, would again impose a risk of additional costs compared to the structures currently in use.
KPMG’s submission on the exposure draft included the following recommendations for inclusion in the Bill when it is introduced to Parliament: