By Jim Bulling and Kithmin Ranamukhaarachchi
A Federal election in Australia was held at the weekend which resulted in a change of Government. One of the signature priorities of the incoming Government is to introduce policies which more comprehensively address climate change challenges.
Read MoreBy Kane Barnett
On 1 July 2022 Australia will finally get a new fund vehicle, the corporate collective investment vehicle (CCIV).
Historically, Australian funds have been established as unit trusts or, in the case of certain venture capital funds, limited partnerships. The CCIV is a corporate structure that is intended to be more internationally recognisable than the trust-based fund structure as it is similar to the equivalent structure in other key fund jurisdictions such as the United Kingdom, Cayman Islands, Singapore and Hong Kong.
Read MoreBy: C. Todd Gibson
Last year, a number of lawsuits were filed against SPACs and their sponsors challenging (in part) their status under the U.S. Investment Company Act of 1940 (“1940 Act”) arguing that SPACs are essentially unregistered investment companies. A brief filed by two professors supported this notion on the basis that SPACs typically hold government securities until a target company is acquired (and thus, such SPACs are investment companies required to be registered). In an unusual move to provide SPAC market participants with some comfort on this issue, a number of law firms joined together refuting this position in a joint public statement outlining legal practioners’ historic view that SPACs are not investment companies.
Read MoreBy: Jim Bulling and Kithmin Ranamukhaarachchi
As Russia’s invasion of Ukraine continues, global economic sanctions have evolved into a complex web of restrictions and prohibitions with limited exceptions. As a result, asset managers have more layers of regulation to navigate in relation to current holdings and future investments in virtually all markets directly or indirectly connected to Russia, Belarus and Ukraine (Region).
Read MoreBy: Anthony R.G. Nolan and Kenneth Holston
Russia’s war against Ukraine has led in record time to the implementation of extensive anti-Russian sanctions by the United States, the European Union, and the United Kingdom, among others. Those initiatives in turn have led to the imposition of extensive capital controls within Russia. The combined effect of Western sanctions and Russian countermeasures threaten the liquidity and creditworthiness of Russian debt obligations. Although the Russian Federation avoided defaulting on a coupon payment on its dollar bonds on March 16, it subsequently announced that it will satisfy its obligations under rubles a dollar bond coming due on April 4 by making payment of principal and interest in rubles.
Read MoreBy: Jim Bulling and Felix Charlesworth
FFSP regime finally announced – good news for offshore managers
On 17 February 2022, the Government introduced the final version of the Foreign Financial Service Provider (FFSP) regulatory regime into Parliament.
The new laws outline three ways in which FFSPs will either be exempt from the requirement to hold an Australian Financial Services Licence (AFSL), or be able to fast track the licencing process. These exemptions will commence on 1 April 2023, to coincide with the expiry of the transitional relief.
Read MoreBy: Jim Bulling
Review of the Quality of Financial Advice
In December 2021, the Australian Treasury published the Draft Terms of Reference to the Review of the Quality of Financial Advice (Review). The Review takes up a number of recommendations of the Hayne Royal Commission and seeks to achieve the goal of providing retail investors access to high quality, affordable, and accessible financial advice. Amongst other areas, the Review will investigate whether regulatory compliance obligations can be streamlined and simplified to reduce cost and remove duplication. Additionally, the Review will consider whether the safe harbour provision for the duty of financial advice providers to act in the best interests of their clients pursuant to section 961B of the Corporations Act 2001 (Cth) is in line with Commissioner Hayne’s recommendation that “unless there is a clear justification for retaining that provision, it should be repealed.”
Read MoreBy: Jim Bulling and Phoebe Naylor
Controversial regulations seeking to govern the provision of proxy advice services were introduced by the Government in late December 2021. The Treasury Laws Amendment (Greater Transparency of Proxy Advice) Regulations 2021 (the Regulations) introduced a definition of “proxy advice” and prescribed it as a financial service. In summary, proxy advice was defined as an offer of voting recommendations to specified entities, in relation to the exercise of their voting rights attached to securities or interests.
Read MoreBy: Jim Bulling and Cathy Ma
Legislation Passes Parliament
The Australian Federal Government passed the long-awaited Corporate Collective Investment Vehicle Framework and Other Measures Bill 2021 on 10 February 2022. The new regulatory and tax framework for Corporate Collective Investment Vehicles (CCIV) will commence on 1 July 2022.
This reform is a welcome step forward for the Australian funds management industry and is aimed at increasing the competitiveness and familiarity of Australian investment offerings to offshore investors.
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