ASIC Corporations (Changing Scheme and Retail CCIV Constitutions) Instrument 2019/700

Administered by Department of the Treasury

Legislation au F2019L01185 In force Legislative Instrument

Legislation content

ASIC Corporations (Changing Scheme and Retail CCIV Constitutions) Instrument 2019/700

 

About this compilation

 

Compilation No. 1

 

This is a compilation of ASIC Corporations (Changing Scheme and Retail CCIV Constitutions) Instrument 2019/700) 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.

 

 

Contents

Part 1—Preliminary

1 Name of legislative instrument

3 Authority

4 Definitions

Part 2—Declaration

5 Registered scheme – changing the constitution

6 Retail CCIV – changing the constitution

Endnotes

Endnote 1—Instrument history

Endnote 2—Amendment history

Part 1—Preliminary

1 Name of legislative instrument

This instrument is ASIC (Changing Scheme and Retail CCIV Constitutions) Instrument 2019/700.

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.

Part 2—Declaration

5 Registered scheme – changing the constitution

Chapter 5C of the Act applies to all persons in relation to a registered scheme as if section 601GC of the Act were modified or varied by, after subsection (1), inserting the following subsections:

“(1B) If the constitution of a scheme sets out a procedure for varying or cancelling rights of a class of members of the scheme, or rights attached to a class of interests under the scheme, those rights may be varied or cancelled by a resolution under paragraph (1)(a) only if that procedure is complied with.

Passport Rules

(1C) Despite subsection (1), the responsible entity of a registered scheme may modify the constitution of the scheme to the extent the responsible entity reasonably considers necessary to ensure the constitution:

(a)          is consistent with section 4 of the Passport Rules for this jurisdiction; and

(b)          specifies a right of withdrawal and contains provisions for making and dealing with withdrawal requests that are consistent with Division 7.1 of Part 7 of those Rules.

Any modifications made to the constitution under this subsection may be made before the scheme has a status of being an Australian passport fund but only have operative effect while the Passport Rules for this jurisdiction apply in relation to the fund.

Other scenarios

(1D) Despite subsection (1), the constitution of the scheme may be modified, or repealed and replaced with a new constitution, by the responsible entity if at least one of the following is satisfied at the time of the modification, or repeal and replacement:

(a) a meeting of members is unable to be held because the quorum requirement in either subsection 252R(2) or the scheme’s constitution is not capable of being satisfied because the scheme has an insufficient number of members;

(b) every member of the scheme is not entitled to vote at a meeting of members because of section 253E;

(c) all interests in the scheme were issued in situations that:

(i) did not require the responsible entity to give a Product Disclosure Statement; and

(ii) did not need disclosure under Part 6D.2, or under Division 2 of Part 7.12 of the old Corporations Law.

(1E) The responsible entity may only make the modification, or repeal and replacement, under subsection (1D) if, before the modification, or repeal and replacement, both of the following are satisfied:

(a)  the responsible entity has provided to each member of the scheme, the auditor of the scheme and the auditor of the scheme’s compliance plan, all the information that the responsible entity reasonably expects to be material to the decision of a member whether to consent to the modification, or repeal and replacement;

(b) after the information in paragraph (a) has been provided, every member of the scheme has given their written consent, to the modification, or repeal and replacement.”.

6 Retail CCIV – changing the constitution

Part 8B.3 of the Act applies in relation to a retail CCIV as if section 1223D of the Act were modified or varied by, after subsection (2), inserting the following subsections:

“(2A) If the constitution of a retail CCIV sets out a procedure for varying or cancelling rights of a class of members of the retail CCIV, or rights attached to a class of shares in the retail CCIV, those rights may be varied or cancelled by a resolution under subparagraph (2)(a)(i) or (iii) only if that procedure is complied with.

Passport Rules

(2B) Despite subsection (2), the corporate director of a retail CCIV may modify the constitution of the retail CCIV to the extent the corporate director reasonably considers necessary to ensure the constitution:

(a) is consistent with section 4 of the Passport Rules for this jurisdiction; and

(b) specifies a right of withdrawal and contains provisions for making and dealing with withdrawal requests that are consistent with Division 7.1 of Part 7 of those Rules.

Any modifications made to the constitution under this subsection may be made before a sub-fund of the retail CCIV has a status of being an Australian passport fund but only have operative effect while the Passport Rules for this jurisdiction apply in relation to the fund.

Other scenarios

(2C) Despite subsection (2), the constitution of the retail CCIV may be modified, or repealed and replaced with a new constitution, by the corporate director if at least one of the following is satisfied at the time of the modification, or repeal and replacement:

(a) a meeting of members is unable to be held because the quorum requirement in either subsection 252R(2) or the retail CCIV’s constitution is not capable of being satisfied because the retail CCIV has an insufficient number of members;

Note:  Section 252R applies in relation to a CCIV and its members subject to the modifications in Subdivision B of Division 6 of Part 8B.3. 

(b)              every member of the retail CCIV is not entitled to vote at a meeting of members because of section 253E;

Note:  Section 253E applies in relation to a CCIV subject to the modifications in Subdivision B of Division 6 of Part 8B.3.  

(c) all shares in the retail CCIV were issued in situations that did not require the retail CCIV to give a Product Disclosure Statement.

(2D) The corporate director may only make the modification, or repeal and replacement, under subsection (2C) if, before the modification, or repeal and replacement, both of the following are satisfied:

(a) the corporate director has provided to each member of the retail CCIV, the auditor of the retail CCIV and the auditor of the retail CCIV’s compliance plan, all the information that the corporate director reasonably expects to be material to the decision of a member whether to consent to the modification, or repeal and replacement;

(b) after the information in paragraph (a) has been provided, every member of the retail CCIV has given their written consent to the modification or repeal and replacement.”.

 

Endnotes

Endnote 1—Instrument history

Instrument number

Date of FRL registration

Date of commencement

Application, saving or transitional provisions

2019/700

12/09/2019 (see F2019L01185)

13/09/2019

 

2022/0940

14/11/2022 (see F2022L01459)

15/11/2022

-

Endnote 2—Amendment history

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 5 (heading)

rs. 2022/0940

Section 6

ad.  2022/0940

 

Overview

The ASIC Corporations (Changing Scheme and Retail CCIV Constitutions) Instrument 2019/700, enacted in 2019, was introduced to address specific issues surrounding the modification and repeal of constitutions within registered schemes and retail continuous-contribution investment vehicles (CCIVs) under the Corporations Act 2001. This legislative instrument was made under subsections 601QA(1) and 1243(2) of the Corporations Act and provides authority for the Australian Securities and Investments Commission (ASIC) to implement changes to the constitutions of these financial schemes. The overarching policy objective of this instrument is to ensure that any changes to the constitutions of registered schemes and retail CCIVs are made in a manner that aligns with relevant rules, particularly the Passport Rules, and that they are done in a way that appropriately informs and engages the members of the scheme or CCIV. The instrument seeks to provide a clear framework for modifying the constitutions, ensuring that any changes are made in accordance with the prescribed procedures and are consistent with applicable rules. It also sets out specific circumstances under which the constitutions can be modified or repealed, such as when a quorum cannot be achieved, when members are not entitled to vote, or when shares were issued without the need for certain disclosures. The instrument aims to protect the rights of members by requiring their informed consent for significant changes to the constitution.

Scope and Application

The ASIC Corporations (Changing Scheme and Retail CCIV Constitutions) Instrument 2019/700 provides modifications to the Corporations Act 2001 concerning the alteration of constitutions for registered schemes and retail Collective Investment Vehicles (CCIVs). This instrument applies to the responsible entities of registered schemes and the corporate directors of retail CCIVs, affecting their ability to modify or repeal and replace the constitutions of their respective schemes or vehicles. The changes are designed to ensure that any modifications made to the constitutions comply with specified regulatory requirements, such as those outlined in the Passport Rules for the jurisdiction. The modifications are subject to certain conditions, including providing material information to members and obtaining their written consent. The instrument’s application extends across Australia, as it is made under the authority of the Corporations Act 2001, which is a Commonwealth Act. Subordinate instruments may further extend or specify the application of this legislative instrument.

Key Provisions

The ASIC Corporations (Changing Scheme and Retail CCIV Constitutions) Instrument 2019/700 sets out specific provisions for modifying or cancelling the constitutions of registered schemes and retail Collective Investment Vehicles (CCIV). Section 5 of the instrument modifies the Corporations Act 2001 (Act) to address the changing of the constitution of a registered scheme, while section 6 addresses the same for a retail CCIV. These provisions are integral to ensuring that any changes to the constitutions comply with relevant laws and are done in a manner that protects the interests of the members. The obligations imposed by this instrument are primarily on the responsible entity of the registered scheme and the corporate director of the retail CCIV. For a registered scheme, the responsible entity must comply with specific procedures outlined in the constitution if it wishes to vary or cancel the rights of a class of members or interests under the scheme (section 5(1B)). In certain circumstances, the responsible entity can modify the constitution to ensure consistency with the Passport Rules, provided that all members have given their written consent (section 5(1C) and (1D)). Similarly, for a retail CCIV, the corporate director must adhere to the constitution's procedure for varying or cancelling member rights (section 6(2A)). The corporate director can also modify the constitution to align with the Passport Rules or in other specified scenarios, but only if all members have provided their written consent (section 6(2B) and (2C)). Breach of the provisions outlined in this instrument can lead to both civil and criminal consequences. Under the Corporations Act 2001, failure to comply with the Act's provisions, including those modified by this instrument, can result in penalties. For example, directors and officers can be subject to civil penalty provisions, which may include fines of up to $200,000 for individuals and significantly higher amounts for corporations (section 1317E). Additionally, serious breaches can lead to criminal charges, with potential penalties including imprisonment, depending on the severity and intent of the breach. The exact penalties depend on the specific provisions of the Act that are breached and the discretion of the court.

Legal classification tags

Area of Law
Corporate Law & Governance
Instrument
Legislative Instrument
Concepts
Definitions & Interpretation
Regulatory Standards
Compliance Obligations

Interactions

Authorises

All Versions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.