Declaration of a Distanced Investment Fund SAPR 64/2023

Overview

The Airports (Ownership – Interests in Shares) Regulations 1996 were enacted to address the need for oversight and regulation of investment in airport assets to ensure national security and competition standards are maintained. The regulation was introduced by the Parliament of Australia to provide a framework for the ownership and control of shares in airport companies, specifically targeting the influence and control exerted by foreign entities. The policy objective is to maintain the integrity and safety of Australia’s airport infrastructure by preventing undue influence from distant investment funds, thereby safeguarding the nation's aviation interests. The notifiable instrument, F2023N00151, declares the Dexus Core Infrastructure Fund as a Distanced Investment Fund, reflecting the ongoing commitment to regulating and monitoring significant investments in critical infrastructure sectors.

Scope and Application

The Airports (Ownership – Interests In shares) Regulations 1996, as amended by F2023N00151, applies to any entity that holds a significant interest in an Australian airport. The act is primarily concerned with entities that hold, directly or indirectly, more than a 49% interest in the voting shares of an airport operator. This encompasses corporate entities, unincorporated associations, and any individual acting on behalf of such entities. The jurisdictional reach of this legislation is national, as it is administered under Commonwealth law, ensuring uniform standards and oversight across all states and territories. This act does not apply to entities with less than a 49% interest in an airport operator's voting shares or to entities that do not engage in the operation or management of airports. The scope of the act can be extended or restricted through subordinate instruments, which may introduce specific conditions or exemptions applicable to particular circumstances or entities.

Key Provisions

The principal operative section of this legislation (F2023N00151) is the declaration of the Dexus Core Infrastructure Fund as a Distanced Investment Fund under the Airports (Ownership – Interests In shares) Regulations 1996 (section 1). This declaration signifies that the fund meets the regulatory criteria to be considered a Distanced Investment Fund, as defined under the relevant regulations. This formal recognition is essential for compliance and governance under the specified regulatory framework. The declaration is made by Jim Betts, the Secretary of the Commonwealth Department of Infrastructure, Transport, Regional Development, Communications and the Arts, acting pursuant to Regulation 4.03 of the Airports (Ownership – Interests In shares) Regulations 1996. The Act imposes specific obligations and requirements on the entities it governs, particularly focusing on compliance and adherence to the regulations pertaining to distanced investment funds. The fund manager, Dexus Capital Funds Management Limited, must ensure that the Dexus Core Infrastructure Fund maintains its status as a Distanced Investment Fund. This includes fulfilling all the conditions set forth in the Airports (Ownership – Interests In shares) Regulations 1996. Additionally, the fund manager is required to keep detailed records and provide regular updates to the Department of Infrastructure, Transport, Regional Development, Communications and the Arts to ensure ongoing compliance. In terms of consequences for breach, the legislation does not explicitly detail offences, penalties, or civil/criminal consequences for non-compliance within the text provided. However, it is reasonable to infer that failure to maintain the fund's status as a Distanced Investment Fund could result in regulatory action, potential fines, or other sanctions as prescribed under the Airports (Ownership – Interests In shares) Regulations 1996. The severity of these consequences would depend on the nature and extent of the non-compliance, with potential penalties aligning with those typically stipulated in related regulations and Acts.