18Foreign‑owned investment funds

18 Foreign‑owned investment funds

Application for investment fund to be declared a substantially Australian investment fund (1) A trustee or manager of an investment fund may, in writing, apply to the Minister for a declaration that the investment fund is a substantially Australian investment fund. Eligibility for declaration (2) An investment fund is eligible to be declared a substantially Australian investment fund if the investment fund is a fund in which a beneficial interest in less than 40% of the capital, and 40% of the income, is held by persons who are foreign persons. (3) For the purposes of subsection (2), a person is not taken to be a foreign person if: (a) the person holds a beneficial interest in the investment fund; and (b) the person is the trustee of another investment fund; and (c) the beneficial interest exists solely because the person is the trustee of the other investment fund; and (d) the other investment fund is a fund in which a beneficial interest in less than 40% of the capital, and 40% of the income, is held by persons who are foreign persons. Minister to decide if investment fund to be declared a substantially Australian investment fund (4) On application under subsection (1), the Minister must: (a) if reasonably satisfied that the investment fund is eligible to be declared a substantially Australian investment fund: (i) make the declaration; and (ii) within 7 days of making the declaration, give a copy of the declaration to the applicant and publish a notice of the declaration on the Department’s website; or (b) if not so satisfied—refuse to make the declaration. Notice of refusal decision to be given (5) The Minister must, within 7 days of deciding to refuse to make a declaration, give the applicant written notice stating: (a) the reasons for the decision; and (b) the applicant’s right to have the decision reviewed by the Administrative Review Tribunal.

Note: See section 28 for review of decisions.

Prescribed interest and prescribed person (6) If a declaration by the Minister that an investment fund is a substantially Australian investment fund is in force: (a) an interest in a share is an interest of a prescribed kind if the interest exists solely as a result of an action by the interest‑holder in the interest‑holder’s capacity as trustee or manager of the fund; and (b) the interest‑holder is a prescribed person. Minister to be advised of adverse facts or circumstances (7) If: (a) a declaration by the Minister that an investment fund is a substantially Australian investment fund is in force; and (b) the interest‑holder is, or becomes, aware of the existence of a fact or circumstance that, had it existed and been known to the Minister at the time the declaration was made, is likely to have resulted in the Minister refusing to make the declaration; the interest‑holder must give the Minister written details of the fact or circumstance, before the end of 7 days after becoming aware of the fact or circumstance. Minister may require information about continuing eligibility of investment fund (8) The Minister may, by written notice given to the interest‑holder, require the interest‑holder to give the Minister, within any period and in the manner specified in the notice, specified information about the eligibility of the investment fund to continue to be declared a substantially Australian investment fund. (9) If a period is specified in the notice as the period within which the information must be given to the Minister, the period must be at least 30 days. (10) If no period within which the information must be given to the Minister is specified in the notice, the information must be given to the Minister within 30 days of the date of the notice.