Managed investment schemes
This section includes information on:
- ASIC’s role in relation to managed investment schemes
- various types of managed investment schemes that may be operated under the Corporations Act
- transitional relief arrangements that apply to Foreign Financial Service Providers
- developments in relation to managed funds.
What are managed investment schemes?
Managed investment schemes are also known as 'managed funds', 'pooled investments' or 'collective investments'. ASIC uses the terms ‘managed investment scheme’ and ‘scheme’ interchangeably. Generally, in a managed investment scheme:
- multiple investors contribute money or money's worth and get an interest in the scheme. 'Interests' in a scheme are a type of financial product and are regulated by the Corporations Act
- money from the different investors is pooled together (often many hundreds or thousands of investors) or used in a common enterprise
- a 'responsible entity' (also referred to as a 'fund manager') operates the scheme. Investors do not have day-to-day control over the operation of the scheme.
Managed investment schemes cover a wide variety of arrangements and underlying assets. Some examples of managed investment schemes include:
- cash management trusts
- property schemes
- Australian equity (share) schemes
- international equity schemes
- exchange traded funds (ETFs)
- mortgage schemes
- agricultural schemes (e.g. horticulture, aquaculture, viticulture)
- horse-breeding and horse racing schemes
- time-sharing schemes
- serviced strata schemes.
Some marketplace lending arrangements (sometimes described as ‘peer to peer lending arrangements’) are structured as managed investment schemes. For more information on market place lending structures, read Information Sheet 213 Marketplace lending (peer to peer lending) products (INFO 213).
What types of investments are not managed investment schemes?
Generally, only investments that are 'collective' are considered managed investment schemes. Some examples of investments that are not managed investment schemes include:
- debentures issued by a body corporate
- barter schemes
- direct purchases of shares or other equities
- schemes operated by an Australian bank in the ordinary course of banking business (e.g. term deposit).
Superannuation products such as regulated superannuation funds and approved deposit funds are not managed investment schemes.
We also provide relief to some arrangements, such as serviced strata schemes, from certain obligations under the Corporations Act. We provide this relief on a conditional basis. The purpose of the relief is to ensure that these arrangements are regulated in accordance with the current market environment for that arrangement.
ASIC’s role in relation to managed investment schemes
ASIC is the regulator responsible for administering the Corporations Act and the Australian Securities and Investments Commission Act 2001 (ASIC Act). These Acts set out the conduct and disclosure obligations of financial services providers, including operators of managed investment schemes.
ASIC’s role in relation to regulating managed investment schemes includes:
- undertaking proactive and reactive supervision and surveillance activities into operators’ conduct and disclosure obligations
- taking enforcement action in response to non-compliance with the laws administered by ASIC
- assessing Australian financial service (AFS) licence applications submitted by entities seeking to be operators of registered and unregistered managed investment schemes
- assessing applications for registration of managed investment schemes
- exercising ASIC’s administrative powers in relation to AFS licences and disclosure
- providing guidance to industry and policy advice to the Australian Government
- providing relief from provisions of the Corporations Act where necessary and appropriate.