The NXT.Legal Guide to CCIV’s

What is a CCIV?

According to ASIC, a corporate collective investment vehicle (CCIV) is a new type of company that can be registered from 1 July 2022. The CCIV framework was introduced by the Corporate Collective Investment Vehicle Framework and Other Measures Act 2022 (Cth), including adding a new Chapter 8B to the Corporations Act 2001 (Corporations Act).
CCIV structure is a company limited by shares, modelled on the United Kingdom's Open-Ended Investment Companies (OEIC) regime. The CCIV will need to be registered with ASIC and can be closed ended or open ended. Sub-funds of a CCIV are registered with ASIC but are not proposed to be separate legal entities.
CCIV’s will be classified as retail or wholesale, with retail CCIV’s being subject to greater regulation, as with current retail managed investment schemes. We would think that could be a replacement structure for the trust-based managed investment scheme that operates in Australia.

Why do we need this?

This structure is similar to the ‘Protected Cell Companies” (PCC’s) that have been the traditional investment vehicles in UK, USA, Luxembourg, Ireland, Hong Kong, Caymans, Delaware, Guernsey and Jersey, so whereas Australia was relying mostly on unit trust structures for managed investment schemes (MIS),this means that our structures will now be incorporated and each ‘cell’ within the CCIV will be protected and treated as a separate legal person. It also makes passporting easier as similar structures exist in New Zealand, Japan and Korea.

Structure
A typical structure could look like this [1]:
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Key Features
  • It is a company with a constitution.
  • ACCIV must have a ‘Corporate Director’ which is a public company.
  • It does not have officers or employees, as it is intended to not operate a business, only undertaking passive investment activities.
  • A retail CCIV must be a ‘Depository’ to hold retail assets on trust, and the Depositary can appoint a custodian to do so on its behalf if not properly authorised. Supervisory responsibilities cannot be delegated.
  • It must at least have one sub-fund. All CCIV activities must be conducted via a sub-fund and all assets and liabilities adhere to a sub-fund.
  • The sub-funds are not separate legal entities. The sub-funds are similar to "statutory funds" maintained by life insurance companies.
  • Two or more sub-funds cannot jointly own a single asset (for example, jointly own a parcel of land). However, multiple sub-funds can separately invest into a trustor other investment structure that owns a single asset. As an example, this could be done through each sub-fund separately acquiring units in a trust that holds a parcel of land.
  • ACCIV may issue shares and debentures, provided that the security is referable only to one fund. It can also issue redeemable shares, which can be redeemed provided that the sub-fund to which the shares are referable does not become insolvent (plus some other requirements).
  • Cross investment between the sub-funds is permitted under certain circumstances.
  • The attribution flow-through taxation arrangements applying to attribution managed investment trusts are also available to CCIV’s, subject to meeting certain eligibility criteria.
‍‍NXT Steps
It will be critical for fund managers, super funds, investors and a range of other financial and fund raising institutions to consider (and to contact us here at NXT.Legal to discuss):
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  • How their business model or investment strategy will be compatible with the CCIV regime.
  • The opportunities for investment for both existing and potential clients.
  • The effect of and opportunities arising from the latest changes to the CCIV regime.
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