Global

Details

  • Service: Tax
  • Type: Regulatory update, Survey report
  • Date: 1/1/2014

Australia - Regulation 

International hedge funds survey
1.1 Hedge fund managers/advisors
1.2 Hedge fund structures
1.3 Investors


1.1 Hedge fund managers/advisors

Authorization requirements and process


In Australia, the regulatory regime makes no distinction between hedge funds and other managed funds. The same registration, operational, and disclosure requirements apply to a fund regardless of whether it is a hedge fund or not.


Unit trust structures are most commonly adopted for the management of both wholesale and retail funds and are generally referred to as managed investment schemes, schemes, or retail schemes to distinguish them from other types of unit trusts, such as those used to carry on active businesses.


Wholesale unit trusts are created under common law and are subject to general trust law.


Retail funds, that is those widely held and offered to the public for subscription, must be established under and subject to the Managed Investment Scheme provisions of the Corporations Act (Chapter 5C). Registered Schemes must prepare and lodge a Compliance Plan with the Australian Securities and Investments Commission (ASIC). The Plan must be audited.


Superannuation entities are subject to the Superannuation Industry (Supervision) Act 1993 (SIS Act) and its Regulations.


Typical timescale to receive approval


Timescales are the same as for traditional fund managers. There is no prescribed timeframe, but general practice is two to four months.


Regulatory capital requirements


ASIC Class Order 11/1140 imposes financial requirements for Responsible Entities of Managed Funds. These are outlined in ASIC Regulatory Guide 166. The Responsible Entity must hold a certain amount of net tangible assets (NTA), fulfill liquidity and extended cashflow projection requirements.


Significant restrictions on marketing to investors


There are no restrictions specific to offshore hedge funds. Rather any products offered by offshore companies must comply with Australia’s local licensing rules. The Australian Securities and Investments Commission (ASIC) administers the Corporations Act 2001 including licensing, conduct, and disclosure in relation to financial products.


ASIC has finalised Regulatory Guide 240 Hedge Funds: Improving disclosure. The aim of the guidance is provide new disclosure benchmarks and principles for hedge funds to improve investor awareness of the risks associated with these products. The new principles cover a range of disclosures relating to the responsible entity, the individuals making the investment decisions for the fund, service providers, fund strategies and fund assets.


back to top

1.2 Hedge fund structures

Authorization requirements


Nothing specific to hedge funds.


Restrictions on types of investments, concentration levels, and the manner in which hedge funds can invest and/or strategies


None.


Rules regarding the publishing of the accounts and prospectuses


Nothing specific to hedge funds.


Time-scale of establishment of a hedge fund


Timescales are the same as for traditional funds. Timeframes depend on the complexity of the fund and can vary from two to six months.


back to top

1.3 Investors

Restrictions on which type of investors can invest in a hedge fund and/or the minimum/maximum number of investors in a hedge fund


None.




© 2014 KPMG Australia Pty Limited, an Australian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.

 
 

Share this

Share this

Contact

Jacinta Munro

KPMG in Australia

+61 3 9288 5877

International hedge funds survey

International funds and fund management survey

A survey of accounting, taxation and regulation issues that affect funds and fund management in more than 70 countries.