Corporate collective investment vehicles
A corporate collective investment vehicle (CCIV) is a new type of company that can be registered from 1 July 2022. The CCIV framework was introduced by the Corporate Collective Investment Vehicle Framework and Other Measures Act 2022, including adding a new Chapter 8B to the Corporations Act 2001 (the Act).
CCIVs and sub-funds
A CCIV is a company limited by shares and is a separate legal entity. It must have at least one sub-fund. A CCIV and its sub-funds must be registered.
A sub-fund of a CCIV is all or part of the business of a CCIV, and not a separate legal entity. Where a CCIV has two or more sub-funds, the assets and liabilities of the CCIV must be assigned to sub-funds. The Act sets out rules in relation to how assets and liabilities must be assigned to sub-funds, including in the case where an asset or liability relates to the businesses of two or more sub-funds. Each sub-fund’s assets and liabilities must be segregated from the assets and liabilities of other sub-funds and can only be applied for specific purposes, such as a sub-fund applying assets to meet the liabilities of that sub-fund.
A sub-fund can acquire shares in another sub-fund in the same CCIV, which is referred to in the Act as cross-investing. Subject to some restrictions, a single asset may be assigned across multiple sub-funds.
A CCIV may only have one director, its corporate director (see below), and a CCIV is not allowed to have any employees.
Retail and wholesale CCIVs
A CCIV will be a retail CCIV if it satisfies one of three tests under the Act. In broad terms, the three retail CCIV tests are:
- at least one member of the CCIV is a protected retail client; or
- at least one person is a protected client under a custodial arrangement; or
- at least one member is a protected member of a passport fund.
A CCIV that is not a retail CCIV is a wholesale CCIV.
Only a retail CCIV with a single sub-fund, or sub-fund of a retail CCIV which only has that one sub-fund, is allowed to be included in the official list of a prescribed financial market in Australia, such as the ASX or Cboe. However, a share in a CCIV may be quoted on a financial market that is not prescribed, such as AQUA or Cboe.
Registration of CCIVs and sub-funds
A CCIV and its initial sub-fund(s) will be established upon registration. The corporate director of a CCIV may apply to register subsequent sub-funds. The registration requirement applies to both retail and wholesale CCIVs.
In broad terms, the registration process for a CCIV is similar to the process for registering a company under the Act. The registration application for a CCIV must include a copy of the CCIV’s constitution and, for a retail CCIV, a copy of the compliance plan.
Please refer to Information Sheet 272 How to register a corporate collective investment vehicle and sub-fund (INFO 272) for more information.
A CCIV is not permitted to convert to another type of company and another type of company is not allowed to change to a CCIV.
A CCIV must have a constitution. There are no prescribed content requirements for the constitution of a wholesale CCIV. The constitution of a retail CCIV must include particular matters, such as complaints handling processes. A CCIV's constitution must not rely on the replaceable rules under the Act. There are no prescribed content requirements for the constitution of a wholesale CCIV.
A CCIV must have a corporate director. A corporate director must be a public company and must hold an Australian financial services licence (AFSL) that authorises it to operate the business and conduct the affairs of a CCIV. For a retail CCIV, at least half of the individual directors of its corporate director must be external directors.
Broadly, the corporate director of a CCIV is responsible for the conduct of the CCIV. The Act imposes duties on a corporate director and its directors and officers. These duties are based on the duties that apply of the Act to the responsible entity, and its directors and officers, of a registered managed investment scheme.
Further information & guidance:
- Report 728 Response to submissions on CP 360 Corporate collective investment vehicles: Preparing for the commencement of the new regime (REP 728)
- Information Sheet 272 How to register a corporate collective investment vehicle and sub-fund (INFO 272)
The following existing regulatory guides have been updated to support the implementation of the CCIVs regime:
- RG 1 AFS Licensing Kit: Part 1 – Applying for and varying an AFS licence
- RG 2 AFS Licensing Kit: Part 2 – Preparing your AFS licence or variation application
- RG 3 AFS Licensing Kit: Part 3 – Preparing your additional proofs
- RG 104 AFS licensing: Meeting the general obligations
- RG 105 AFS licensing: Organisational competence
- RG 132 Funds management: Compliance and oversight
- RG 133 Funds management and custodial services: Holding assets
ASIC will release a new legislative instrument and issue updated versions of the following regulatory guides shortly:
- ASIC Corporations (Financial Requirements for Corporate Directors of Retail Corporate Collective Investment Vehicles) Instrument 2022/449
- RG 126 Compensation and insurance arrangements for AFS licensees
- RG 134 Funds management: Constitutions
- RG 166 AFS licensing: Financial requirements
- RG 168 Disclosure: Product Disclosure Statements (and other disclosure obligations)