(1) A body, partnership or trust (each an entity) is an interposed vehicle in relation to a product or investment option if both of the following are satisfied:
(a) property attributable to the product or investment option to which the Product Disclosure Statement relates is invested in or through the entity;
(b) the responsible person for the Product Disclosure Statement believes or has reasonable grounds to believe that the entity has more than 70% of its assets by value invested in securities or other financial products.
(2) For the purposes of subclause (1) and subject to subclause (3), in determining whether an entity (the first entity) has more than 70% of its assets by value invested in securities or other financial products, disregard for the numerator, securities or other financial products that:
(a) are reasonably regarded as a means by which the first entity makes an investment in real property or an infrastructure entity; or
(b) confer on the first entity control of another entity (the second entity), unless the responsible person for the Product Disclosure Statement has reasonable grounds to believe that the second entity has more than 70% of its assets by value invested in securities or other financial products.
(3) For the purposes of paragraph (2)(b), in determining whether the second entity has more than 70% of its assets by value invested in securities or other financial products, apply subclause (2) to the second entity as if the second entity was the first entity referred to in that subclause.
PDS test
(4) An entity is also an interposed vehicle in relation to a product or investment option if, having regard to the Product Disclosure Statement for the product or investment option and any other information issued by the responsible person, a security or interest in the entity could be reasonably regarded, by retail clients who may be expected to be given the Product Disclosure Statement or other information, as the means by which the benefit of investments by or through the entity is obtained, rather than the investment of the superannuation entity, registered scheme or notified foreign passport fund to which the product or investment option relates.
(4A) Subject to subclause (4B), an entity is also an interposed vehicle in relation to a product or investment option if:
(a) the Product Disclosure Statement for the product or investment option or any other information issued by the responsible person relating to the product or investment option issued by the responsible person that has been given or may reasonably be expected to be given to retail clients refers to “property”, “real estate” or “land” or similar terms in the description of the product or investment option or as one of the assets (relevant asset) in which investment may be made under the product or investment option; and
Section 101B - ASIC Corporations (Disclosure of Fees and Costs) Instrument 2019/1070 - Interposed vehicle | Zoe
(b) real property or an interest in land to which the reference relates is directly or indirectly held by or through the entity.
(4B) An entity is not an interposed vehicle in relation to a product or investment option because of subclause (4A) if both the following are satisfied:
(a) the reference in the Product Disclosure Statement or other information is merely part of a reference to an entity (whether specified or not) that directly or indirectly invests in real property or interests in land or to physical infrastructure referred to in paragraphs (a) to (j) of the definition of infrastructure entity in subclause (6);
(b) a retail client who has read the Product Disclosure Statement or other information could not reasonably believe that the product or investment option or the relevant asset may be intended for persons predominantly intending to benefit from increases in the value of, or returns from holding, real property or an interest in land other than physical infrastructure referred to in paragraphs (a) to (j) of the definition of infrastructure entity in subclause (6).
(4C) Subject to subclause (4D), an entity is also an interposed vehicle in relation to a product or investment option if:
(a) the Product Disclosure Statement for the product or investment option or any other information issued by the responsible person relating to the product or investment option that has been given or may be reasonably expected to be given to retail clients refers to the product or option as being directly or indirectly invested in or through an entity (whether specified or not) other than an infrastructure entity which the responsible person believes has a majority of its assets invested in physical infrastructure referred to in paragraphs (a) to (j) of the definition of infrastructure entity in subclause (6); and
(b) the reference relates to the entity.
(4D) An entity is not an interposed vehicle because of subclause (4C) if:
(a) either of the following is satisfied:
(i) the entity is admitted to the official list of a prescribed financial market or a financial market operated outside of this jurisdiction that is regulated by a foreign government or an agency of a foreign government;
(ii) the issuer of the securities or financial products of the entity has applied, or stated in a regulated disclosure that they will apply, for such admission; and
(b) the securities or financial products of the entity are, or are to be, held under an investment strategy for the product or investment option that:
(i) relates to, or is publicly measured by the responsible person by reference to, a widely used index (reference index) of securities or financial products of entities that satisfy subparagraph (a)(i); and
(ii) is a strategy of holding directly or indirectly securities or financial products:
(A) of entities that satisfy paragraph (a); and
(B) that represent at least 80% by value of the net assets attributable to the investment strategy; and
(c) the value of all the securities or financial products of the entity that are in the same class as the securities or financial products held under the investment strategy does not exceed 30% of the value of the reference index.
Note: If paragraphs (a) to (c) are satisfied in relation to an entity, the entity may still be an interposed vehicle because of provisions of clause 101B other than subclause (4C).
Platform test
(5) Despite anything in subclauses (1) to (4D), an entity will not be an interposed vehicle in relation to a product or investment option if all of the following apply:
(a) the Product Disclosure Statement for the product or an investment option states that a holder of the product may give instructions, directions or requests for financial products to be acquired;
(b) the responsible person for the Product Disclosure Statement has published a list of financial products in relation to which the instructions, directions or requests may be given that includes a security or interest in the entity;
(c) the arrangement under which the instructions would be acted on is a custodial arrangement as defined in subsection 1012IA(1) of the Act.
Interpretation
(6) In this clause:
infrastructure entity means an entity that provides a return to its shareholders or members mainly from owning or operating any of the following:
(a) airports;
(b) electricity generation, transmission or distribution facilities;