ASIC has given ongoing relief exempting trustees of wholesale equity schemes from having to hold an Australian financial services (AFS) licence to provide custodial or depository services and dealing services (wholesale equity financial services).
ASIC has released Class Order [CO 08/405] Wholesale equity schemes: licensing relief for trustees – Amendment, which makes the licensing relief in Class Order [CO 07/74] Wholesale Equity Schemes: Licensing relief for trustee ongoing.
We have released Regulatory Guide 192 Licensing: wholesale equity venture capital schemes: trustee licensing (RG 192) which explains the licensing relief in [CO 07/74].
Background
A wholesale equity scheme is an unregistered managed investment scheme that primarily invests in the securities of unlisted companies and whose members are wholesale clients.
For tax reasons, wholesale equity schemes are usually structured using a multiple unit trust structure with separate corporate trustees. The AFS licensing provisions in the Corporations Act are likely to require the trustee of each of the multiple trusts in a wholesale equity scheme to hold an AFS licence to provide wholesale equity financial services, even though the scheme is effectively only being operated by a fund manager that already holds an AFS licence. We have given the relief because we consider that requiring each trustee to hold an AFS licence, when a fund manager that is already an AFS licence holder takes responsibility for the operation of the wholesale equity scheme, would impose a disproportionate cost burden on the scheme.
Whilst consulting on whether to give ongoing relief, ASIC issued CO 07/74 in May 2007 to provide interim licensing relief to trustees of wholesale equity schemes when a fund manager that has an AFS licence and is a related body corporate of the trustees accepts responsibility for the conduct of the trustees. The interim relief expires on 31 December 2008.
Further background information on CO 07/74 is provided in ASIC Information Release (IR 07-21) ASIC consults on policy on licensing relief for trustees of wholesale equity schemes (31 May 2007).
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