Understanding ASIC's Guidance Proposals for CCIVs: A Closer Look

The Australian Securities and Investments Commission (ASIC) has recently released Consultation Paper 360, seeking feedback on its proposed guidance on Corporate Collective Investment Vehicles (CCIVs). In this article, we will delve deeper into the key issues related to licensing and regulatory implications that would apply to CCIVs and corporate directors.

What is a CCIV?

For those who may not be familiar with the concept of a CCIV, it is an umbrella investment structure set up as a company limited by shares. This unique structure allows for multiple sub-funds to be held under one entity, each with its own allocated assets and liabilities. In essence, each sub-fund operates as a separate business from any other sub-fund within the CCIV.

Licensing Implications

One of the key issues related to licensing implications is how ASIC will administer the obligations that will apply to corporate directors. Under the proposed guidance, ASIC will assess Australian Financial Services (AFS) licence applications from persons seeking to provide financial product advice on and/or deal in CCIV securities. Additionally, ASIC will also assess AFS licence applications from corporate directors seeking to operate a CCIV.

Regulatory Implications

Another critical aspect of the proposed guidance is how ASIC will regulate the activities of CCIVs and their directors. The regulatory framework aims to ensure that CCIVs are operated in a responsible and transparent manner, providing investors with adequate protection.

In our previous article, we highlighted some of the key features of a CCIV. For those who may not be familiar, here is a brief summary:

* A CCIV cannot hire any employees, officers or directors.

* Each sub-fund has its own allocated assets and liabilities.

* The CCIV regime will commence on 1 July 2022.

Proposed Guidance from ASIC

The proposed guidance includes proposals on how ASIC will regulate the activities of CCIVs. Some of the key issues that have been highlighted in previous consultations include:

* How ASIC will assess AFS licence applications from persons seeking to provide financial product advice on and/or deal in CCIV securities.

* How ASIC will assess Australian Financial Services (AFS) licence applications from corporate directors seeking to operate a CCIV.

In conclusion, the proposed guidance from ASIC aims to provide clarity on the licensing and regulatory implications of CCIVs. As the CCIV regime is set to commence on 1 July 2022, it is essential for those involved in this space to be aware of the requirements and obligations that will apply to CCIVs and their directors.

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