ASIC RG 131 — ASIC Regulatory Guide – RG 131 Funds management: Establishing and registering a fund

Page 1 REGULATORY GUIDE 131 Funds management: Establishing and registering a fund October 2022 About this guide This guide is for responsible entities of registered managed investment schemes (registered schemes), Australian passport fund operators, corporate directors of retail corporate collective investment vehicles (CCIVs), and their advisers. It provides guidance on our requirements for:  establishing and registering a managed investment scheme and subsequently registering as an Australian passport fund;  establishing and registering a CCIV and its initial sub-fund(s); and  registering further sub-funds. Page 2 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 2 About ASIC regulatory documents In administering legislation ASIC issues the following types of regulatory documents. Consultation papers: seek feedback from stakeholders on matters ASIC is considering, such as proposed relief or proposed regulatory guidance. Regulatory guides: give guidance to regulated entities by:  explaining when and how ASIC will exercise specific powers under legislation (primarily the Corporations Act)  explaining how ASIC interprets the law  describing the principles underlying ASIC’s approach  giving practical guidance (e.g. describing the steps of a process such as applying for a licence or giving practical examples of how regulated entities may decide to meet their obligations). Information sheets: provide concise guidance on a specific process or compliance issue or an overview of detailed guidance. Reports: describe ASIC compliance or relief activity or the results of a research project. Document history This guide was issued in October 2022 and is based on legislation and regulations as at the date of issue. In June 2025, we updated references to reflect changes to Regulatory Guide 1 Applying for and varying an AFS licence (RG 1) and related guidance. In April 2026, we made amendments to reflect updated Regulatory Guide 181 AFS licensing: Managing conflicts of interest (RG 181). Previous versions:  Superseded Regulatory Guide 131, issued July 2018 Disclaimer This guide does not constitute legal advice. We encourage you to seek your own professional advice to find out how the Corporations Act and other applicable laws apply to you, as it is your responsibility to determine your obligations. Page 3 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 3 Contents A Overview ........................................................................................... 4 How our guidance applies ................................................................. 4 Registering a managed investment scheme ..................................... 4 Registering as an Australian passport fund ....................................... 6 Registering a CCIV and sub-funds .................................................... 7 What to include with an application ................................................... 8 How we assess an application........................................................... 9 B Registering a managed investment scheme............................... 11 Applying to register a scheme ......................................................... 11 The responsible entity ...................................................................... 11 Contents of the application .............................................................. 12 Assessment by ASIC ....................................................................... 14 C Registering as an Australian passport fund ............................... 19 Applying to register as an Australian passport fund ........................ 19 Contents of the application .............................................................. 20 Assessment by ASIC ....................................................................... 26 Decision by ASIC ............................................................................. 36 Entry on the Asia Region Funds Passport Register ........................ 36 D Registering a CCIV and sub-funds .............................................. 38 Meeting the CCIV registration requirements ................................... 38 Contents of the application .............................................................. 39 Lodging the application form and paying the fee ............................. 41 Assessment by ASIC ....................................................................... 42 Registering further sub-funds .......................................................... 42 Registering a sub-fund of a CCIV as an Australian passport fund .. 44 Key terms ............................................................................................... 45 Related information ............................................................................... 50 Page 4 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 4 A Overview Key points This guide provides information on how to establish and register a managed investment scheme. A managed investment scheme must meet certain requirements to become registered under the Corporations Act 2001 (Corporations Act). This guide provides information on how to register as an Australian passport fund for the purposes of the Asia Region Funds Passport. This guide also provides information on how to register a corporate collective investment vehicle (CCIV), its initial sub-fund(s) and any further sub-funds. How our guidance applies RG 131.1 This guide is for: (a) responsible entities of registered managed investment schemes (registered schemes); (b) Australian passport fund operators; (c) corporate directors of CCIVs; and (d) their advisers. RG 131.2 We will apply this guide when assessing applications lodged with ASIC to register: (a) a managed investment scheme; (b) a registered scheme as an Australian passport fund; and (c) a CCIV, its initial sub-fund(s) and any further sub-funds. RG 131.3 This guide does not apply to operators of foreign passport funds lodging a notice of intention to enter or operate in Australia as a host economy under the Asia Region Funds Passport. Note: For information on the requirements for foreign passport fund operators lodging a notice of intention to offer interests in Australia, see Regulatory Guide 138 Foreign passport funds (RG 138). Registering a managed investment scheme RG 131.4 To register a managed investment scheme, the responsible entity must be an Australian public company registered under the Corporations Act and hold Page 5 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 5 an Australian financial services (AFS) licence authorising it to operate a registered scheme. RG 131.5 An application to register a managed investment scheme can be made to ASIC by completing Form 5100 Application for registration of a managed investment scheme. RG 131.6 For a managed investment scheme to be registered, s601EB(1) of the Corporations Act sets out that: (a) the application must: (i) state the name of the scheme, the name and address of the responsible entity, and the name and address of the person who has consented to act as auditor of the compliance plan; and (ii) be accompanied by a copy of the constitution, a copy of the compliance plan and a statement signed by the directors (directors’ statement) that the constitution meets s601GA and 601GB and the compliance plan meets s601HA (see s601EA); (b) the responsible entity must be an Australian public company holding an AFS licence (see s601FA); (c) the constitution must meet the requirements of s601GA and 601GB; (d) the compliance plan must set out the adequate measures that the responsible entity will apply in operating the managed investment scheme (see s601HA); (e) a copy of the compliance plan (signed by the directors of the responsible entity) must be lodged with ASIC (see s601HC); and (f) arrangements that satisfy the requirements of s601HG must be in place to audit compliance with the compliance plan. Note: In this guide, references to sections (s), chapters (Chs) and parts (Pts) are to the Corporations Act, unless otherwise specified. RG 131.7 When lodging an application, the responsible entity will also need to select the dominant asset kind relevant to the managed investment scheme. RG 131.8 When an application to register a managed investment scheme is lodged with ASIC, we assess whether the application complies with the requirements of the Corporations Act. We must register a managed investment scheme within 14 days of lodgement (14-day registration period), unless it appears to us that an application does not meet one or more legislative requirements under s601EB. RG 131.9 We may seek clarification about the information in an application or the documents attached to it during the 14-day registration period. We may also ask for amendments to the application form, constitution, compliance plan or directors’ statement if they do not appear to comply with the requirements of the law as interpreted and set out in our regulatory guides. We may also Page 6 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 6 refuse the application if we are of the opinion there is non-compliance, without asking for amendments. RG 131.10 We will refuse to register a managed investment scheme if the responsible entity or its advisers are unwilling or unable to make any requested amendments within the 14-day registration period, and it appears to us that s601EB is not met. RG 131.11 When a managed investment scheme is registered, we give it an Australian Registered Scheme Number (ARSN) and keep a record of it: see s601EB(2) and (3). Note: See Section B for information on registering a managed investment scheme. Registering as an Australian passport fund RG 131.12 An Australian passport fund operator will use its Australian Company Number (ACN) or Australian Registered Business Number (ARBN) to log into the ASIC Regulatory Portal to apply for registration as an Australian passport fund. RG 131.13 An Australian passport fund operator seeking to register an Australian passport fund will need to complete and submit to ASIC an application and attach a copy of the Product Disclosure Statement (PDS): see s1212. Note: See our website for more information on how to register as an Australian passport fund, which includes guidance on the requirements for PDSs. RG 131.14 A managed investment scheme must be registered under the Corporations Act before it may become registered as an Australian passport fund. However, it does not need to be registered at the time the application to register as an Australian passport fund is lodged. RG 131.15 We must register an Australian passport fund if we are of the opinion that the Australian passport fund operator: (a) meets the eligible entity requirements in section 3 of Annex 2 to the Memorandum of Cooperation on the Establishment and Implementation of the Asia Region Funds Passport (Memorandum of Cooperation); and (b) is likely to comply with the Corporations Act, including the Australian Passport Rules, and the Australian Securities and Investments Commission 2001 (ASIC Act). Note: The Australian Passport Rules are made under s1211 and 1211A by the Australian Minister responsible for the Asia Region Funds Passport (the responsible Minister). RG 131.16 There is no prescribed timeframe for us to decide whether to register an Australian passport fund. We will aim to make decisions about applications Page 7 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 7 promptly. However, the time we take to make a decision is likely to be impacted by the nature, scale and complexity of the Australian passport fund operator and the fund, and the quality of the information provided in support of the application. RG 131.17 In making any decision whether to register an Australian passport fund, we may: (a) ask for further information on answers the Australian passport fund operator has given in the application, particularly if they are unclear or do not appear to be consistent with the law and/or our guidance; (b) give the operator the opportunity to make amendments to the answers it has given; (c) seek clarification of the contents of the PDS; or (d) give the operator the opportunity to make amendments to the PDS or provide explanations where we have concerns. RG 131.18 We may refuse registration as an Australian passport fund if the Australian passport fund operator or its advisers are unwilling or unable to provide information or make amendments needed to enable us to grant the registration. Note: See Section C for more information on registering as an Australian passport fund. Registering a CCIV and sub-funds RG 131.19 A CCIV is a type of company that is limited by shares. Chapter 8B of the Corporations Act, which took effect on 1 July 2022, governs CCIVs. RG 131.20 A CCIV will be either a retail CCIV or a wholesale CCIV. A CCIV must have at least one sub-fund from the initial registration of the CCIV. RG 131.21 A CCIV must have a sole director—its corporate director. A corporate director must be an Australian public company that holds an AFS licence. RG 131.22 All CCIVs must have a constitution and retail CCIVs must have a compliance plan. RG 131.23 Subject to the corporate director providing the documents set out in Table 1, ASIC will register a CCIV, its initial sub-fund(s) and any future sub-funds. Note: See Section D for more information on registering a CCIV and sub-funds. Page 8 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 8 What to include with an application RG 131.24 Table 1 sets out what a responsible entity, Australian passport fund operator or corporate director needs to provide and do to register a managed investment scheme, an Australian passport fund, or a CCIV or sub-fund. Table 1: Application requirements for registering a managed investment scheme, an Australian passport fund, or a CCIV or sub-fund Application requirements Managed investment scheme Australian passport fund CCIV or sub-fund Application Form 5100 Application for registration of a managed investment scheme Apply for registration as an Australian passport fund, available through the ASIC Regulatory Portal To register:  the CCIV and initial sub- fund(s), use Form 5201 Application for registration of a corporate collective investment vehicle; and  subsequent sub-fund(s), use Form 5202 Application for registration of a sub-fund of a corporate collective investment vehicle. Constitution Must meet s601GA and 601GB Must meet section 4 of the Australian Passport Rules The constitution of a:  retail CCIV must meet s1223B, 1223G and s1223H; and  wholesale CCIV must meet s1223B and 1223F. Compliance plan Must meet s601HA Must meet s601HA, including the additional obligations for an Australian passport fund Must meet s1226A. Wholesale CCIVs are not required to lodge a compliance plan: see s1226(3). Directors’ statement Form 5103 Directors’ statement relating to application for registration of a managed investment scheme Not applicable Not applicable PDS Not applicable Must meet Div 2 of Pt 7.9 Not applicable Fee Yes Yes Yes Page 9 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 9 Application requirements Managed investment scheme Australian passport fund CCIV or sub-fund Additional information Not applicable The Australian passport fund operator must supply:  an Australian criminal history check; and  a bankruptcy check Note: If an overseas criminal history or bankruptcy check has not been obtained, the operator may alternatively provide a statutory declaration explaining the efforts made to obtain the checks and stating their criminal and bankruptcy history. Not applicable Note 1: For more information on our fees and methods of payment, see Information Sheet 30 Fees for commonly lodged documents (INFO 30). Note 2: For an Australian passport fund, overseas criminal history and bankruptcy checks are required for each country of residence (in addition to Australian criminal history and bankruptcy checks) if the person has resided overseas within the past 10 years. Australian criminal history and bankruptcy checks are not required if the person has not resided in Australia at all over the past 10 years. How we assess an application RG 131.25 Once an application has been submitted, we will advise the responsible entity, Australian passport fund operator or corporate director that we have received the application. RG 131.26 We will contact the responsible entity, Australian passport fund operator or corporate director to let them know whether we require more information or amendments to the application or documents, or if we have decided to register or refuse the application. RG 131.27 If we request more information or amendments, we will give the responsible entity, Australian passport fund operator or corporate director a reasonable time to supply any more information or make any amendments required before deciding whether to register or refuse the application. We will communicate our decision to the responsible entity, operator or corporate director once the further information is supplied or the amendments are made. Note: If the responsible entity, Australian passport fund operator or corporate director does not supply the information or make the amendments within a reasonable time, we will refuse the application for registration if we are of the opinion it does not meet the requirements to be granted. RG 131.28 This process is shown in Figure 1. Page 10 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 10 Figure 1: Application assessment process Note 1: The process in this flowchart is explained in RG 131.25–RG 131.27 (accessible version). Note 2: Applicants may choose to withdraw their application at any stage of the process. However, this does not mean that they will be entitled to a refund of the application fee. Applicant advised of receipt of application Applicant supplies further information or amended documents Assessment of compliance with relevant provisions Further information or amendment to documents if required Refusal to register Decision to register Application entered on ASIC system Application allocated to ASIC officers Decision communicated to applicant Consideration of materials Application lodged with ASIC Page 11 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 11 B Registering a managed investment scheme Key points To register a managed investment scheme an application must be lodged with ASIC. The application must be in the approved form, and the contents of the application and necessary supporting documentation must meet the requirements of the Corporations Act. This section explains how we apply those requirements when assessing an application to register a scheme. Applying to register a scheme RG 131.29 An application to register a managed investment scheme must be lodged with ASIC and meet the requirements in s601EA. RG 131.30 After we receive an application, we will undertake a ‘completeness check’ to see whether it is complete. If it does not pass this check, we will reject the application and the responsible entity will have to reapply. We will generally tell the responsible entity which parts are incomplete. The responsible entity RG 131.31 To register a managed investment scheme, the responsible entity must be an Australian public company that has an AFS licence authorising it to operate the registered scheme: see s601FA. Note: For information on how to become licensed as a responsible entity under the AFS licensing regime, see Regulatory Guide 1 Applying for and varying an AFS license (RG 1). RG 131.32 If the responsible entity is not already authorised by its AFS licence to operate the relevant kind of registered scheme, an application to register a managed investment scheme should not be submitted until we have considered the AFS licensing application. We will indicate when an application to register the scheme can be made. If the application to register the scheme is made before we have given this indication, we may refuse the application because there is no responsible entity that meets the requirements of s601FA. Page 12 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 12 Contents of the application Application RG 131.33 The responsible entity must complete Form 5100. The application requires details about the responsible entity and the person who has consented to be the auditor of the compliance plan: see s601EA(2)(a) and (b). Note: The consent of the auditor under s601EA(2)(b) must be obtained before the application is lodged: see s601EA(3). RG 131.34 All relevant fields on the application must be completed or we will reject the application for lodgement. RG 131.35 Where the application requires detail about an aspect of the managed investment scheme, this should be completed with sufficient detail to enable us to properly understand and assess the answer. Constitution RG 131.36 The constitution must meet the requirements in s601GA and 601GB. RG 131.37 Under s601GA, the constitution must make adequate provision for, or specify, certain prescribed matters. These include: (a) the consideration to acquire and dispose of an interest in the registered scheme; (b) the powers and rights of the responsible entity, including: (i) powers to make investments of, or borrow or deal with, scheme property; and (ii) rights to be paid fees or be indemnified out of scheme property; (c) the method for dealing with complaints about the registered scheme; (d) any rights of members to withdraw from the registered scheme; and (e) the process for winding up the registered scheme. RG 131.38 Under s601GB, the constitution of a registered scheme must be a legally enforceable document between the responsible entity and members. It must set out some or all of the rights, duties and liabilities of the responsible entity in its operation of the scheme. RG 131.39 While there is no prescribed form for the constitution of a registered scheme, the application must state which provisions of the constitution address the matters in s601GA and 601GB. We will usually consider only these provisions, and other provisions that appear related, when registering a managed investment scheme. Page 13 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 13 Compliance plan RG 131.40 The compliance plan must set out the adequate measures the responsible entity will apply to ensure the registered scheme operates in accordance with the Corporations Act and its constitution: see s601HA. RG 131.41 A compliance plan must include the following arrangements: (a) all scheme property is clearly identified as scheme property and held separately from the property of the responsible entity and any other scheme; (b) the compliance committee functions properly; (c) scheme property is valued at regular intervals appropriate to the nature of the property; (d) the compliance plan is audited; and (e) adequate records of the scheme’s operations are kept (see s601HA(1)). RG 131.42 Under s601HB(1), the responsible entity may lodge a compliance plan that incorporates by reference specified provisions, as in force at a specified time or from time to time, of the compliance plan of another registered scheme of which it is also the responsible entity. RG 131.43 The compliance controls in a compliance plan should be prepared specifically by reference to the type of registered scheme and its investment strategy. Where a compliance plan incorporates parts of another plan, the compliance controls that make up that part of the incorporated plan should be appropriate compliance controls for that registered scheme. Because group compliance risks apply across all registered schemes the responsible entity operates, we consider group compliance controls are generally appropriate to be incorporated into all compliance plans for those schemes. However, registered scheme level compliance controls should only be incorporated where they are appropriate to the nature, scale and complexity of the particular scheme. For example, incorporating parts of a compliance plan that address compliance risks associated with the investment strategy for a mortgage fund into an agribusiness fund plan will not be appropriately tailored to addressing the specific risks of the second fund. Note 1: For more information on incorporating parts of compliance plans into other compliance plans, see Regulatory Guide 132 Funds management: Compliance and oversight (RG 132) at RG 132.89–RG 132.92. Note 2: For examples of group compliance risks and scheme-level compliance risks, see RG 132.119 and RG 132.146–RG 132.148. Page 14 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 14 Directors’ statement RG 131.44 The directors of the responsible entity must declare that: (a) the contents of the constitution meet the requirements of the Corporations Act; (b) the constitution is a legally enforceable document between the members and the responsible entity; and (c) the compliance plan complies with s601HA. RG 131.45 The directors must make this or by lodging a signed Form 5103. RG 131.46 Where Form 5103 is used, each director of the responsible entity at the date of lodgement must have signed the directors’ statement. Directors need to take care that their statement is correct. Under s1308, if a director does not take reasonable steps to ensure they do not make a false statement to ASIC, the director may be guilty of an offence. RG 131.47 Agents for the directors cannot make the declaration. However, on occasion, an alternate director may make the declaration. A director can appoint an alternate director with the other directors’ approval. The alternate director will act as an alternate to exercise some or all of the director’s powers for a specified period. Depending on the terms of appointment, an alternate may be granted the same powers and carry out the same duties as the appointing director. Assessment by ASIC RG 131.48 When an application to register a managed investment scheme is lodged with ASIC, we will look at whether it appears to comply with s601EB. We must register the managed investment scheme within the 14-day registration period, unless it appears to us that the application does not meet one or more of the requirements: see s601EB. Constitution RG 131.49 We will look at whether the constitution appears to meet the requirements in s601GA and 601GB: see our guidance on these requirements in Regulatory Guide 134 Funds management: Constitutions (RG 134). This regulatory guide sets out the basis on which we will apply the content requirements for constitutions when an application to register a managed investment scheme is lodged with ASIC. RG 131.50 We will consider whether the constitution appears to make adequate provision for or specifies: (a) the consideration that is to be paid to acquire an interest in the scheme (see Section B of RG 134); Page 15 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 15 (b) the powers of the responsible entity in making investments of, or otherwise dealing with, scheme property (see RG 134.139– RG 134.145); (c) any rights to be paid fees out of scheme property or to be indemnified out of scheme property for liabilities or expenses incurred in relation to performing its duties (see RG 134.146–RG 134.160); (d) method by which complaints made by members in relation to the scheme are to be dealt with (see RG 134.161–RG 134.176); (e) any right to withdraw from a registered scheme and the adequate procedures for making and dealing with withdrawal requests (see RG 134.199–RG 134.239); (f) winding up the scheme (see Section H of RG 134). Compliance plan RG 131.51 We will consider whether the compliance plan appears to meet the requirements in s601HA: see our guidance on the requirements in RG 132. RG 131.52 Taking into account our guidance in RG 132, we will check whether the compliance plan for a registered scheme appears to contain: (a) adequate compliance controls as set out in RG 131.41; and (b) at a minimum, adequate detail about the things set out in RG 132.85. Note: If the compliance plan incorporates provisions from the compliance plan of an earlier scheme, we will not generally check that the compliance plan of the earlier scheme contains this content at the point of registering the later scheme. However, if we have concerns about the content of the incorporated compliance plan, we may raise it at a later time. RG 131.53 Where a compliance plan incorporates parts of another plan, we will consider whether the compliance controls which make up that part of the incorporated plan appear to be appropriate compliance controls for the registered scheme: see RG 132.89–RG 132.92. We will apply greater scrutiny to scheme-level compliance controls that are incorporated into the compliance plan to satisfy ourselves that they are appropriate to the nature, scale and complexity of the particular scheme. We will generally also check that the parts of the other plan have been incorporated in the way that meets s601HB and ASIC Corporations (Chapter 5C—Miscellaneous Provisions) Instrument 2017/125: see RG 132.89. RG 131.54 We will consider whether the group-level and scheme-level compliance controls appear adequate to ensure compliance with the Corporations Act and the scheme’s constitution. We expect adequate compliance controls to: (a) align with the responsible entity’s values, objectives and strategy (see RG 132.86); Page 16 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 16 (b) reflect the responsible entity’s actual procedures, processes and practices (see RG 132.87 and RG 132.99); (c) have a nexus to the compliance obligations and compliance risks (see RG 132.88); (d) be set out with enough certainty (see RG 132.93–RG 132.96); (e) be written in a clear manner so that they are usable by the target audience (see RG 132.97–RG 132.99); (f) identify functional roles responsible for carrying out a particular compliance control (see RG 132.100–RG 132.101 and RG 132.106); (g) have sufficient frequency and quantity to effectively manage the compliance risks (see RG 132.107–RG 132.109); (h) be tailored to the nature, scale and complexity of the scheme, taking into account the assets invested in by the scheme and the scheme’s investment strategy (see RG 132.85(a), RG 132.146 and RG 132.153); and (i) be reviewed and maintained (see RG 132.112–RG 132.118). RG 131.55 We will also consider the processes for monitoring compliance with the compliance controls: see RG 132.110. We expect adequate processes to: (a) evaluate the effectiveness of compliance controls; (b) ensure that the allocation of roles is appropriate for meeting compliance obligations; (c) ensure the compliance obligations are accurate and up to date; (d) ensure that previously identified compliance failures are addressed effectively; (e) identify and address instances where compliance controls were not complied with or there were ‘near misses’; (f) note attitudes and behaviours in relation to compliance and the perceived competence of employees when dealing with issues that arise; (g) assess performance against the compliance controls; and (h) keep records of the compliance controls, results of testing and remediation undertaken. Director’s statement RG 131.56 For an application that uses Form 5103, we will check that each and every director of the responsible entity, or a properly appointed alternate, has signed the form. We will check these directors were directors at the date of lodgement. If an alternate director has signed, we will review the terms of the alternate director’s appointment to ensure they are broad enough to authorise the signing of the form. Page 17 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 17 Action we may take RG 131.57 During the 14-day registration period, we may ask for: (a) in rare instances, an explanation of how the managed investment scheme meets the definition of a ‘managed investment scheme’ in s9; (b) an amendment to the application or more information, particularly where an answer given does not provide sufficient detail to enable us to properly understand and assess the answer; (c) a new Form 5103 to be signed by all directors and lodged; (d) a further explanation of provisions in the constitution; (e) amendments to be made to provisions in the constitution to meet s601GA and 601GB (see our guidance in RG 134), and the constitution to be re-executed; (f) a further explanation about the contents of the compliance plan; and (g) amendments to be made to the compliance plan to meet s601HA (see our guidance in RG 132). RG 131.58 We will refuse to register the managed investment scheme if the responsible entity or its advisers are unwilling or unable to provide this explanation, further information or amended documentation as required within the 14-day registration period. RG 131.59 We may also refuse to register the managed investment scheme if it appears to us that one or more of the criteria in s601EB are not met. We may do this without taking any of the steps in RG 131.57. This is because it is up to the responsible entity to ensure the application meets the requirements of the Corporations Act when lodged. RG 131.60 If we decide not to register the managed investment scheme, we will write to the responsible entity setting out the decision and the reasons why. We will also tell the responsible entity how to apply to the Administrative Appeals Tribunal for a review if the responsible entity considers the decision is wrong. RG 131.61 The responsible entity may choose to withdraw the application. If the responsible entity takes this option, we will not be able to refund the application fee or hold it over if the responsible entity decides to reapply. The fact that the application has been withdrawn will be on the public record. Review of provisions prior to lodgement of application RG 131.62 When lodging an application to register the managed investment scheme, the responsible entity or its advisers should state that certain provisions of the Page 18 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 18 constitution have been reviewed before lodgement if that is the case. We may refuse registration if: (a) the responsible entity or its advisers have not requested a review of provisions before lodgement; (b) the provisions appear to us to not meet the Corporations Act; and (c) we do not have sufficient time to seek information on whether the provisions will meet the Corporations Act. Note: Generally, we will not review draft provisions of a scheme constitution before it is lodged for registration, except for the provisions for the consideration to acquire an interest or calculation of the withdrawal amount. For more information on requesting a review of provisions for constitutions, see Section B of RG 134. RG 131.63 We will not give priority to or expedite the processing time of an application to register a managed investment scheme on the sole basis that it has been preceded by a review by our staff. RG 131.64 Our review of the provisions in a constitution before lodgement does not prevent us from raising more matters when we assess whether the constitution meets the requirements under s601EB. Page 19 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 19 C Registering as an Australian passport fund Key points The Asia Region Funds Passport allows interests in passport funds established and regulated in one participating economy to be sold to investors in another participating economy. Australian passport fund operators wishing to operate an Australian passport fund under the Asia Region Funds Passport will need to comply with the registration and ongoing requirements under the Passport Rules agreed between participating economies, and comply with the law in their home economy (Australia) and host economies. ASIC and our fellow passport regulators have established arrangements for cooperation and information sharing in administering the Asia Region Funds Passport. Applying to register as an Australian passport fund RG 131.65 An Australian passport fund operator seeking to register an Australian passport fund will need to complete and submit to ASIC an application and attach a copy of the PDS: see s1212. RG 131.66 The requirements for applying to register as an Australian passport fund are in addition to the requirements for registering a managed investment scheme under Ch 5C. RG 131.67 To register an Australian passport fund, we need to be of the opinion that: (a) the Australian passport fund operator is an eligible entity within the meaning of section 3 of Annex 2 to the Memorandum of Cooperation; and (b) the Australian passport fund is likely to be operated in compliance with the Corporations Act, including the Australian Passport Rules, and the ASIC Act. RG 131.68 Section 1212(1) sets out that an application may be made to register as an Australian passport fund where: (a) the responsible entity or person acting on its behalf lodges the application; or (b) the proposed responsible entity or person acting on its behalf lodges the application and has also applied to register the managed investment scheme under s601EB. Page 20 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 20 RG 131.69 Where an application for registration of a managed investment scheme is lodged at the same time as an application to register as an Australian passport fund, we may: (a) begin our assessment of both applications on receiving them; and (b) ask for further information or amendments at the same time. RG 131.70 As an Australian passport fund must be a registered scheme, we will refuse the application to register as an Australian passport fund if we also refuse the application to register the managed investment scheme. RG 131.71 We will be unlikely to make a decision to register the Australian passport fund at the same time as making a decision to register the managed investment scheme. This is because generally an application to register as an Australian passport fund is more complex and will take more time for us to assess. Contents of the application Application RG 131.72 The Australian passport fund operator can complete the Apply for registration as an Australian passport fund transaction, which is available through the ASIC Regulatory Portal. Note 1: See our website for more information on how to register as an Australian passport fund, which includes guidance on the requirements for PDSs. Note 2: An Australian passport fund operator will need to contact us to obtain a copy of the application if it cannot complete the Apply for registration as an Australian passport fund transaction using the ASIC Regulatory Portal. Please ask online or call 1300 300 630. RG 131.73 The Australian passport fund operator will also need to pay the applicable fee when submitting their application. Note: For more information on our fees and methods of payment, see INFO 30. RG 131.74 The application is made up of yes/no, multiple choice and open-ended questions that take into account the purpose of each provision in the Australian Passport Rules. RG 131.75 Where we have asked for specific representations to be given about compliance with the Australian Passport Rules, we will usually rely on the answer that is given to form an opinion about the likelihood of compliance. RG 131.76 Australian passport fund operators need to take care that their representations are correct. Under s1308, if an operator does not take Page 21 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 21 reasonable steps to ensure it does not make a false statement to ASIC, it may be guilty of an offence. RG 131.77 The number of questions that an Australian passport fund operator will need to answer depends on a range of factors. These include the type of assets held, whether any portfolio limits have been exceeded and whether any functions are delegated. Delegated functions RG 131.78 Under the Australian Passport Rules, delegated functions remain the responsibility of the Australian passport fund operator. This requires it to have suitable processes in place to ensure appropriate standards of care are applied by the delegate or sub-delegate in performing functions and that delegates’ activities are monitored, controlled and evaluated: see section 11(1) of the Australian Passport Rules. Note: Under s1211(2), the Australian Passport Rules must be substantially the same as the Passport Rules set out in Annex 3 to the Memorandum of Cooperation. The Australian Passport Rules made under s1211(1) will be taken to be substantially the same where they together with other provisions of the Corporations legislation made by the responsible Minister have substantially the same effect as the Passport Rules set out in Annex 3 to the Memorandum of Cooperation: see s1211(3). RG 131.79 We consider suitable processes may include an established process for delegations that incorporates set accountabilities, reporting obligations and performance appraisals of delegates, along with appropriate oversight and knowledge of any sub-delegations and sub-delegates. We will generally check this information as part of the application. RG 131.80 Section 11(3) of the Australian Passport Rules sets out requirements where an Australian passport fund operator delegates the investment management function for more than 20% of the value of the Australian passport fund’s assets. Where this happens, the investment management business of every qualifying delegate must be regulated in: (a) a participating economy; or (b) an economy that has, in respect of investment management functions of collective investment schemes that may be offered to the general public, a regulatory framework that is ‘broadly similar in effectiveness’ to that in Australia (see section 11(3)). Note: Section 11(3) does not require regulation in this way for a qualifying delegate of the investment management function if the delegation is for less than 20% of the assets. RG 131.81 We consider that regulatory frameworks are broadly similar in effectiveness to the Australian framework for the purpose of section 11(3) in the following economies: (a) Hong Kong; (b) Singapore; Page 22 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 22 (c) member states of the European Union; and (d) the United Kingdom. RG 131.82 Our view is based on an examination of the criteria that we use to assess whether a foreign regulatory regime is ‘sufficiently equivalent’. RG 131.83 If an Australian passport fund operator wants a further economy to be recognised, it should consider the principles we have developed for granting relief for foreign providers from certain Australian regulatory requirements. One key requirement is that the foreign provider is subject to a sufficiently equivalent overseas regulatory regime. Note: For more information on sufficient equivalence, see Regulatory Guide 54 Principles for cross-border financial regulation (RG 54). These principles include the General Principles (see Table 1 of RG 54) and the Equivalence Principles (see Table 2 of RG 54). RG 131.84 To properly assess an application for relief, we need to understand how managed investments are regulated in the relevant overseas regulatory regime. Note: Applications for relief should be lodged through the ASIC Regulatory Portal. RG 131.85 The more complex the arrangements, the greater the likelihood more questions will need to be answered and, generally, the longer the assessment period. Compliance with the Basel Committee on Banking Supervision guidelines RG 131.86 Under the Australian Passport Rules, a body may be required to be regulated or supervised by a regulatory body in general compliance with the Basel Committee on Banking Supervision (BCBS) guidelines: see sections 7(3)(a)(iv), 13(10)(a), 21(1), 27(2)(a)(i), 28(2)(a)(i), 30(2)(a)(ii) and 30(4)(a) of the Australian Passport Rules. RG 131.87 We have adopted a three-tiered approach when considering compliance with the BCBS guidelines. We consider that a body will be from a: (a) Tier 1 country—if that country is a member of the Basel Committee on Banking Supervision; Note: This includes members of the European Union, as the European Union is a member of the Basel Committee on Banking Supervision. (b) Tier 2 country—if that country is a participating economy; or (c) Tier 3 country—if that country is any other country. RG 131.88 We will accept all Tier 1 countries as complying with the BCBS guidelines. This is because, as members of Basel Committee on Banking Supervision, these countries are required to implement the initiatives of the committee. They must meet minimum standards of implementation, but can exceed Page 23 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 23 them. Members of the European Union are required to meet similar requirements because of their membership of the European Union. RG 131.89 We will also accept all Tier 2 countries, because each participating economy has been subject to a Financial Sector Assessment Program country report. RG 131.90 We will treat the BCBS guidelines referred to in the Australian Passport Rules as referring to the core principles methodology adopted by the BCBS. Eligible entity requirements RG 131.91 An Australian passport fund operator must meet certain requirements in the Australian Passport Rules to be an eligible entity. These requirements apply at the time of application, unless there is an exemption or modification. The eligible entity requirements are summarised in Table 2, and the assessments we apply in considering whether the requirements have been met are discussed in further detail at RG 131.104–RG 131.135. Table 2: Summary of eligible entity requirements for Australian passport fund operators Requirement Guidance Assets under management test The Australian passport fund operator or its related parties must have assets under management with a total value of at least US$500 million. RG 131.108– RG 131.110 Relevant qualifications test The Australian passport fund operator must have officers with the relevant qualifications set out in section 6 of the Australian Passport Rules. RG 131.111– RG 131.114 Financial resources test The Australian passport fund operator must have equity resources of at least US$1 million, plus the additional capital amount: see section 7 of the Australian Passport Rules. RG 131.115– RG 131.118 Organisational arrangements test The Australian passport fund operator must have in place processes and procedures to ensure it meets the organisational arrangements test in section 8 of the Australian Passport Rules. RG 131.119– RG 131.123 Track record test The Australian passport fund operator or a related party must meet the track record test in section 9 of the Australian Passport Rules. RG 131.124– RG 131.129 Good standing test The Australian passport fund operator must meet the good standing test in section 10 of the Australian Passport Rules. RG 131.130– RG 131.135 Page 24 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 24 Requirement Guidance Home economy and home regulator test The Australian passport fund operator must:  have its principal place of business in Australia; and  be regulated by ASIC as responsible entity of a registered scheme. See section 3 of Annex 2 to the Memorandum of Cooperation RG 131.92 One of the key objectives of the Asia Region Funds Passport is to provide a high degree of investor protection. The eligibility requirements in the Australian Passport Rules aim to ensure high standards are met and, in particular, that Australian passport fund operators are well established, competent, adequately resourced and adequately set up to manage retail collective investment schemes. Compliance with the Corporations Act, including the Australian Passport Rules, and the ASIC Act RG 131.93 Under s1212A, we must be of the opinion that the Australian passport fund operator is likely to comply with the Corporations Act, including the Australian Passport Rules, and the ASIC Act. In forming this opinion, we will take into account: (a) the operator’s compliance history; and (b) whether the operator’s compliance management system is sufficiently effective and responsive to allow it to demonstrate its commitment to complying with its obligations under the Corporations Act and ASIC Act (see Section B of RG 132). RG 131.94 In our view, there is a greater likelihood of non-compliance with the Corporations Act and ASIC Act when the compliance management system is not effective and responsive. To be effective and responsive, we consider the compliance management system should be planned, implemented, evaluated, improved and documented. RG 131.95 We will ask Australian passport fund operators to identify the compliance controls in place to meet the requirements of the Corporations Act, including the Australian Passport Rules, the frequency with which they are undertaken and the frequency with which compliance with them is monitored. We have included some common compliance controls and frequencies in the prescribed form to make it less time consuming for an operator to describe all of the compliance controls and their frequencies. However, we do not expect operators to use this list if they do not have those compliance controls or frequencies—in this case, operators can describe the actual compliance controls and frequencies instead. Page 25 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 25 Permitted investments RG 131.96 Division 6.2 of the Australian Passport Rules governs the types of assets in which an Australian passport fund is permitted to invest. Those assets include investments in regulated collective investment schemes, deposits, currency, derivatives, transferable securities, money market instruments and depository receipts over gold. The purpose of restricting passport funds to holding only certain types of assets is to secure the reputation of the Asia Region Funds Passport as a regulatory arrangement that provides for liquid investments that are readily able to be priced. RG 131.97 The application asks questions about the permitted assets that will be held by the Australian passport fund, to break down the requirements of the relevant specific provision of the Australian Passport Rules into its key components. Breach of the Australian Passport Rules RG 131.98 To submit an application to become an Australian passport fund, the prospective Australian passport fund operator must be able to comply with the Australian Passport Rules. Where there is a breach of the Australian Passport Rules any attempt to submit an application will most likely result in a decision to refuse the application. We expect prospective operators to rectify any breach of the Australian Passport Rules, and have no reasonable basis to expect a further breach, before submitting an application. Exceeding portfolio allocation limits RG 131.99 The Australian Passport Rules set out portfolio allocation limits across the permitted asset types: see Division 6.3 of the Australian Passport Rules. These limits seek to ensure that a passport fund is well diversified across different issuers and equivalent assets with similar characteristics. However, it is not a breach of the Australian Passport Rules to exceed a portfolio allocation limit: see section 29 of the Australian Passport Rules. RG 131.100 An Australian passport fund that exceeds a portfolio allocation limit must cease to do so as soon as reasonably practicable, but no later than three months after the date the limit was first exceeded: see section 29(2) of the Australian Passport Rules. If the Australian passport fund operator satisfies the independent oversight entity that an extension would be in the best interests of members and receives notice in writing from the independent oversight entity, this three-month period may be extended by one month (with further one-month extensions allowed): see section 29(3) of the Australian Passport Rules. RG 131.101 Where an existing registered scheme has exceeded one or more portfolio allocation limits, or it is considered likely that a limit may soon be exceeded, but the period in section 29(2) and (3) has not expired, it may still be possible to submit an application for registration. In this case, we encourage Page 26 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 26 the prospective Australian passport fund operator to raise any concerns or discussion points with us before lodging an application. PDS RG 131.102 An Australian passport fund operator must also attach to its application a copy of the PDS, which is required before the operator may offer interests to retail clients: see s1212(2). RG 131.103 The PDS must comply with the requirements in s1013C and must contain sufficient information on the Australian passport fund for a retail client to make an informed decision about whether to purchase an interest in the fund. Assessment by ASIC RG 131.104 When an application to register as an Australian passport fund is lodged with ASIC, we will assess whether it complies with s1212A. RG 131.105 We take a risk-based approach to assessment. We will consider each question answered and the underlying risk the relevant provision in the Australian Passport Rules is intended to address. Assessment of the eligible entity requirements RG 131.106 When we assess the application to register as an Australian passport fund, we may ask for more information or documents that will demonstrate the Australian passport fund operator’s ability to meet the eligible entity requirements. If the operator does not provide the information and documentation we need, we may consider that it has not demonstrated that it can meet the eligible entity requirements. Note: The eligible entity requirements applicable to an Australian passport fund operator are distinct from, and may be additional to, the AFS licensing requirements for a responsible entity. RG 131.107 We will refuse to register an Australian passport fund if: (a) the Australian passport fund operator or its advisers are unwilling or unable to provide more information or documentation within a reasonable time, and we are unable to form an opinion that the eligible entity test can be met; or (b) in our opinion the operator cannot meet the relevant eligible entity test. Assets under management test RG 131.108 The Australian passport fund operator and its related parties must be collectively responsible for operating financial asset collective investment Page 27 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 27 schemes that have total assets of at least US$500 million. This is calculated using the method set out in section 3(5)(b) of Annex 2 to the Memorandum of Cooperation. The calculation can include any amounts in relation to which the operator or related party has discretionary management powers. RG 131.109 We will generally check: (a) the percentage by which the test has been exceeded; and (b) whether all assets invested directly or indirectly in other collective investment schemes or discretionary management accounts operated by the Australian passport fund operator or its related parties have been excluded to avoid double counting. RG 131.110 We will generally ask for more information or documents where the test has been exceeded by less than 1%. If the assets under management test is exceeded by only a small amount, there may be a higher likelihood that the Australian passport fund operator will not meet section 7 of the Australian Passport Rules in the future. We may ask for the financial accounts used to derive the total amount of assets under management. We may also ask for more information on: (a) any related party that is being relied on; (b) how each related party is a related party within the meaning of the Memorandum of Cooperation; and (c) how the amount was calculated. Relevant qualifications test RG 131.111 The Australian passport fund operator must have officers with the relevant qualifications. We will assess whether the following officers have relevant experience in an International Organization of Securities Commissions (IOSCO) financial services related business: (a) CEO—the CEO must have spent 10 of the last 15 years in such an organisation and 5 of those 10 years in a managerial or supervisory role; (b) at least two executive directors (which may include the CEO)—the executive directors must have spent five of the last seven years in such an organisation; and (c) any officer or employee responsible for making, or supervising at least on a joint basis, all discretionary investment decisions for the Australian passport fund—the employee or officer must have spent either: (i) five of the last seven years in such an organisation; or (ii) three of the last five years in such an organisation and hold a bachelor degree or higher qualification in a relevant discipline. Note: For the definition of ‘IOSCO financial services related business’, see the key terms. Page 28 REGULATORY GUIDE 131: Funds management: Establishing and registering a fund © Australian Securities and Investments Commission October 2022 Page 28 RG 131.112 We may request more information on: (a) the ways in which the experience of the CEO, executive directors, or an officer or employee is relevant; (b) how the organisation carries on business in financial or capital markets or financial services; (c) how a qualification is the equivalent of a bachelor degree or higher qualification; and (d) how a qualification is in a relevant discipl