ASIC has written to stakeholders and affected licensees regarding the commencement of its new regime regarding Corporate Collective Investment Vehicles (CCIVs). ASIC noted the release of Consultation Paper 360 which sought feedback on ASIC’s proposed regulatory guidance on the licensing regime and its application to CCIVs.
ASIC’s correspondence noted two important points:
- Existing licensees that hold authorisations in relation to securities: For existing AFS licensees that hold advice and dealing authorisations in relation to securities, ASIC stated that these AFS licensees do not need to vary their licence in order to provide advice or intermediary services relating to securities in CCIVs.
- Existing licensees that do not hold authorisations in relation to securities: For existing AFS licensees that hold authorisations in relation to Managed Investment Schemes (MIS), but not in relation to securities, ASIC noted that it has written to these AFS licensees to explain the process of an ASIC initiated variation to include an authorisation in relation to securities in a CCIV.
The CCIV regime commences on 1 July 2022 and provides an alternative to the existing managed investment scheme regime under the Corporations Act. CCIVs are:
- a type of company;
- limited by shares;
- has a single corporate director. The corporate director is a public company which holds an AFS licence authorising it to operate the business and conduct the affairs of the CCIV.
CCIV securities are financial products and fall within the definition of security under the Corporations Act. Whilst the CCIV itself is exempt from licensing, the public company which operates the CCIV must hold an AFS licence and any other entity or person that provides financial services in relation to the securities in a CCIV must hold the appropriate AFS licence.
In March 2022, ASIC released Consultation Paper 360 which included an overview of ASIC’s approach to licensees that intend to provide the following services in relation to securities in CCIVs:
- advice (personal or general);
- intermediary services (including dealing in CCIV securities).
The Consultation Paper sought feedback on ASIC’s proposed guidance on CCIVs and includes proposals in relation to how ASIC will assess AFS licence applications from:
- corporate directors seeking to operate a CCIV;
- persons seeking to provide financial product advice and/or deal in CCIV securities; and
- how ASIC will administer the licence obligations that apply to corporate directors.
The Consultation Paper includes updates to the following Regulatory Guides:
- Regulatory Guide 2: AFS licensing Kit Part 2 – Preparing your AFS licence or variation application;
- Regulatory Guide 3: AFS Licensing Kit Part 3 – Preparing your additional proofs;
- Regulatory Guide 105: AFS Licensing – Organisational Competence;
- Regulatory Guide 126: Compensation and insurance arrangements for AFS licensees; and
- Regulatory Guide 166: AFS Licensing – Financial requirements
Sophie Grace can assist with all aspects of AFS licensing. Please contact us to discuss further.