The regime sets out the regulatory and tax treatment of these vehicles. The Australian Taxation Office has published guidance on the tax treatment, including Law Companion Ruling 2024/1, which was finalised in October 2024. Anyone starting a fund should compare this structure with the established trust-based alternative.
The law amends the Corporations Act 2001 to set out how these vehicles are established and operated. It works alongside the existing financial services rules.
The laws include additional protections for retail investors.
A corporate collective investment vehicle is a type of company used for collective investment. It is an alternative to the trust-based managed investment scheme. For each vehicle:
- The company is limited by shares.
- It must have a single corporate director (that is, the director must not be a natural person).
- The corporate director must be a public company, with an Australian Financial Services Licence authorising its relevant functions.
- For a retail vehicle, the corporate director’s board must have a majority of external directors.
- The vehicle may not have any other officers.
- Every vehicle must register with the Australian Securities and Investments Commission, called the regulator on this page, and meet certain basic requirements.
- At registration, it must have at least one sub-fund, which has at least one member.
- Within a vehicle, one or more sub-funds may be established. Each sub-fund’s registration with the regulator is a ‘standalone’ process.
- The vehicle must register as retail or wholesale. If even one investor is retail, it must register as retail and comply with additional requirements designed to protect retail investors.
Because it is a company, it is generally subject to the ordinary rules of the Corporations Act, with some particular provisions. Most of the powers, rights, duties and characteristics of a company apply.