Sophie Grace has extensive experience in establishing a range of retail funds for our clients.
We can help you through all aspects of establishing and maintaining your retail fund.
The trustee of a retail fund is a responsible entity and must be a public company that holds an AFSL with the appropriate authorisations.
Retail funds are required to issue a PDS unless an exemption applies. There is an exemption for small-scale offerings of managed investment products.
“Small-scale offerings” must:
- not breach the 20 investors ceiling test;
- not breach the $2 million ceiling test; and
- be “personal offers”.
There will be a breach of the 20 investors ceiling test (item 1 above) if the offering “results in the number of people to whom the issuer has issued managed investment products exceeding 20 in any 12 month period”.
There will be a breach of the $2 million ceiling test (item 2 above) if the offering “results in the amount raised by the issuer has issued managed investment products exceeding $2 million in any 12 month period”.
To meet the “personal offers” test under the Corporations Act (item 3 above) the offer must:
- only be able to be accepted by the person to whom it is made; and
- be made to a person who is likely to be interested in the offer.
Retail funds are required to be registered with ASIC unless they fall within the exemption of “small-scale offerings” where no PDS is required.
There are a number of documents required for registration, including:
- A constitution;
- A compliance plan;
- A compliance committee (where less than half the directors of the trustee are external).
- advise on fund establishment issues including Financial Services Regulation (FSR) implications of establishing a fund (e.g. licensing and the requirement to be registered as a managed investment scheme);
- prepare or review trust deeds and constitutions;
- prepare or review Product Disclosure Statements (PDS);
- prepare investor subscription agreements; and
- prepare or review outsourcing agreements including investment management, custody and fund administration agreements.
There are a number of issues for those needing finance and those providing finance. For example, fundraising disclosure requirements, Personal Property Securities Registration (PPSR) requirements, financial assistance prohibitions, interest withholding tax and state-based stamp duties.
We have experience in assisting those needing finance and those providing finance. We can help you deal with the legal aspects of these issues, including drafting and/or negotiating the relevant loan or facility note issuance, security and/or disclosure documentation.