ASIC Corporations (Registered Schemes and CCIVs—Differential Fees) Instrument 2017/40
1ASIC Corporations (Registered Schemes and CCIVs—Differential Fees) Instrument 2017/40
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ASIC Corporations (Registered Schemes and CCIVs—Differential Fees) Instrument 2017/40
About this compilation
Compilation No. 1
This is a compilation of ASIC Corporations (Registered Schemes and CCIVs—Differential Fees) Instrument 2017/40 as in force on 15 November 2022. It includes any commenced amendment affecting the legislative instrument to that date.
This compilation was prepared by the Australian Securities and Investments Commission.
The notes at the end of this compilation (the endnotes) include information
about amending instruments and the amendment history of each amended provision.
This is the ASIC Corporations (Registered Schemes and CCIVs—Differential Fees) Instrument 2017/40.
3 Authority
This instrument is made under subsections 601QA(1) and 1243(2) of the Corporations Act 2001.
4 Definitions
In this instrument:
Act means the Corporations Act 2001.
associated person, in relation to a member, means:
(a) a spouse, parent, child, brother or sister of the member; or
(b) a company which has no member other than the member or a person mentioned in paragraph (a); or
(c) a regulated superannuation fund within the meaning of the Superannuation Industry (Supervision) Act 1993 which has no member other than the member or a person mentioned in paragraph (a); or
(d) a trust which has no beneficiary other than the member or a person mentioned in paragraph (a) or (b); or
(e) an entity controlled by the member or a person mentioned in paragraph (a) or (b), and includes an entity jointly controlled by the member and a person mentioned in paragraph (a) or (b).
differential fee arrangement:
(a) in relation to a registered scheme, means an arrangement for the charging, rebating or waiving of fees, including entry, exit and periodic fees, by the responsible entity to members of the scheme on a basis that differs from that applying to other members who hold interests of the same class; and
(b) in relation to a CCIV, means an arrangement for the charging, rebating or waiving of fees, including entry, exit and periodic fees, by the corporate director of the CCIV or the CCIV, as the case may be, to members of a sub-fund of the CCIV on a basis that differs from that applying to other members of the sub-fund who hold shares of the same class referable to that sub-fund.
employee member:
(a) in relation to a scheme, means a member of the scheme who is also an employee of the responsible entity of the scheme or a related body corporate; and
(b) in relation to a CCIV, means a member of the CCIV who is also an employee of:
(i) the corporate director of the CCIV; or
(ii) a related body corporate of the corporate director.
wholesale client has the meaning given by section 761G of the Act.
Part 2—Exemption
5 Registered schemes - differential fees
(1) A responsible entity of a registered scheme does not have to comply with paragraph 601FC(1)(d) of the Act to the extent it would otherwise prohibit the responsible entity from administering a differential fee arrangement.
Characteristics of the member or of their investment
(2) This instrument applies to a differential fee arrangement in relation to a registered scheme under which the fees that may be charged, rebated or waived by the responsible entity to members of the scheme differ based on any of the following criteria:
(a) the total value of, or the number of, interests held by the member, or by the member and associated persons, in one or more of the following:
(i) the scheme;
(ii) other managed investment schemes operated by the responsible entity or a related body corporate;
(iii) other financial products issued by the responsible entity or a related body corporate;
(b) the total period of time during which the member, or the member and associated persons, has held interests in one or more of the following:
(i) the scheme;
(ii) other managed investment schemes operated by the responsible entity or a related body corporate;
(iii) other financial products issued by the responsible entity or a related body corporate;
(c) the member being an employee of the responsible entity or a related body corporate in circumstances where the number of votes that may be cast on a resolution of the scheme’s members by employee members is no more than 5% of the total votes that may be cast by the scheme’s members;
(d) the member having acquired their interests under a switching facility that involved the member first withdrawing from a managed investment scheme operated by the responsible entity or a related body corporate; or
(e) savings to the scheme resulting, or reasonably expected by the responsible entity to result, from the lower cost of servicing a member of the scheme because of particular characteristics of that member or of their investment, where the amount of the benefit by way of lower fees charged to that member, or the rebate or waiver of fees provided to that member, is no greater than a reasonable estimate of the amount of the saving or expected saving.
Individual negotiation with wholesale clients
(3) This instrument also applies to a differential fee arrangement in relation to a registered scheme under which the fees that may be charged, rebated or waived by the responsible entity to a member that is a wholesale client differs from that applying to other members based on individual negotiation between the responsible entity and the member.
6 Conditions
(1) The responsible entity must ensure that:
(a) where a differential fee arrangement of a kind referred to in subsection 5(2) is in place or is to be offered—a statement of the basis on which the differential fee will be calculated and which specifies the fees that members will have to bear; and
(b) where a differential fee arrangement of a kind referred to in subsection 5(3) is in place or is to be offered—a statement of that fact,
is or has been disclosed in a clear, concise and effective manner:
(c) to existing members of the scheme by no later than the date of the first communication by the responsible entity to all members after the date when the differential fee arrangement is first offered; and
(d) in any Product Disclosure Statement required by the Act in relation to interests in the scheme that is in use during the period in which the differential fee arrangement is offered.
(2) The responsible entity must ensure that any differential fee arrangements do not adversely affect the fees paid or to be paid by any member of the scheme who is not entitled to the benefit of those fee arrangements.
(3) The responsible entity must ensure that where a differential fee arrangement of a kind referred to subsection 5(2) is in place or is to be offered, the arrangement is applied without discrimination to all members who satisfy the criteria necessary to receive the benefit of the arrangement.
7 CCIVs – differential fees
(1) A corporate director of a CCIV does not have to comply with paragraphs 1224D(2)(b) or (3)(b) of the Act, as the case may be, to the extent they would otherwise prohibit the corporate director or the CCIV from administering a differential fee arrangement.
Characteristics of the member or of their investment
(2) This instrument applies to a differential fee arrangement in relation to a CCIV under which the fees that may be charged, rebated or waived by the corporate director or the CCIV to members of a sub-fund of the CCIV differ based on any of the following criteria:
(a) the total value of, or the number of, shares held by the member, or by the member and associated persons, in one or more of the following:
(i) the CCIV (in respect of the sub-fund);
(ii) other CCIVs operated by the corporate director or a related body corporate of the corporate director;
(iii) other financial products issued by the corporate director or a related body corporate of the corporate director;
(b) the total period of time during which the member, or the member and associated persons, has held shares in one or more of the following:
(i) the CCIV (in respect of the sub-fund);
(ii) other CCIVs operated by the corporate director or a related body corporate of the corporate director;
(iii) other financial products issued by the corporate director or a related body corporate of the corporate director;
(c) the member being an employee of the corporate director or a related body corporate of the corporate director in circumstances where the number of votes that may be cast on a resolution of the members of the sub-fund of the CCIV by employee members is no more than 5% of the total votes that may be cast by the members of the sub-fund of the CCIV;
(d) the member having acquired their shares under a switching facility that involved the member first withdrawing from:
(i) another sub-fund of the CCIV; or
(ii) another CCIV operated by the corporate director or a related body corporate of the corporate director; or
(e) savings to the CCIV resulting, or reasonably expected by the corporate director to result, from the lower cost of servicing a member of the CCIV because of particular characteristics of that member or of their investment, where the amount of the benefit by way of lower fees charged to that member, or the rebate or waiver of fees provided to that member, is no greater than a reasonable estimate of the amount of the saving or expected saving.
Individual negotiation with wholesale clients
(3) This instrument also applies to a differential fee arrangement in relation to a CCIV under which the fees that may be charged, rebated or waived by the corporate director or a CCIV to a member that is a wholesale client differs from that applying to other members based on individual negotiation between the corporate director and the member.
8 Conditions
(1) The corporate director must ensure that:
(a) where a differential fee arrangement of a kind referred to in subsection 7(2) is in place or is to be offered—a statement of the basis on which the differential fee will be calculated and which specifies the fees that members will have to bear; and
(b) where a differential fee arrangement of a kind referred to in subsection 7(3) is in place or is to be offered—a statement of that fact,
is or has been disclosed in a clear, concise and effective manner:
(c) to existing members of the sub-fund of the CCIV by no later than the date of the first communication by the corporate director to all members of the sub-fund after the date when the differential fee arrangement is first offered; and
(d) in any Product Disclosure Statement required by the Act in relation to shares in the CCIV that is in use during the period in which the differential fee arrangement is offered.
(2) The corporate director must ensure that any differential fee arrangements do not adversely affect the fees paid or to be paid by any member of the sub-fund of the CCIV who is not entitled to the benefit of those fee arrangements.
(3) The corporate director must ensure that where a differential fee arrangement of a kind referred to in subsection 7(2) is in place or is to be offered, the arrangement is applied without discrimination to all members of the sub-fund of the CCIV who satisfy the criteria necessary to receive the benefit of the arrangement.
Endnotes
Endnote 1—Instrument history
Instrument number
Date of FRL registration
Date of commencement
Application, saving or transitional provisions
2017/40
10/03/2017 (see F2017L00202)
11/03/2017
2022/0940
14/11/2022 (see F2022L01459)
15/11/2022
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Endnote 2—Amendment history
Note: ad. = added or inserted am. = amended LA = Legislation Act 2003 rep. = repealed rs. = repealed and substituted
Provision affected
How affected
Section 1
am. 2022/0940
Section 2
rep. s48D LA
Section 3
am. 2022/0940
Section 4 (definition of differential fee arrangement)