Declaration of a distanced investment fund - SAPR 68/2017

Overview

The Distanced Investment Funds Declaration Instrument 2017 (C2017G00618), gazetted on 4 June 2017, was enacted to address the need for a regulatory framework that governs investments in Australian airports by entities such as infrastructure funds. This instrument was issued under the Airports Act 1996 by Mike Mrdak, the Secretary of the Commonwealth Department of Infrastructure and Regional Development. The primary objective of this legislation is to ensure that significant interests in Australian airport companies are held by entities that are appropriately distanced from the day-to-day operations of the airports, thereby maintaining the integrity and independence of the airport regulatory regime. This helps to preserve the public interest by preventing undue influence on the operational and regulatory processes of airports.

Scope and Application

The Airports (Ownership – Interests in Shares) Regulations 1996, specifically Regulation 4.03, empower the Secretary of the Commonwealth Department of Infrastructure and Regional Development to declare certain investment funds as distanced investment funds. This legislative instrument applies to specific funds managed by AMP Capital Investors Limited, a financial entity identified by its Australian Business Number (ABN). In this instance, the declared distanced investment funds are the AMP Capital Core Infrastructure Fund and the AMP Capital Diversified Infrastructure Trust. The scope of the legislation pertains to the regulation of financial interests in airport ownership to ensure that certain entities do not have undue influence or control over airport operations. The jurisdictional reach of this declaration is Commonwealth, reflecting the federal nature of the regulatory oversight in Australia. The legislation does not specify any exclusions, exemptions, or thresholds within the text provided, but it does indicate that the Secretary's declaration extends the application of the Airports (Ownership – Interests in Shares) Regulations 1996 to these particular funds.

Key Provisions

The main sections of the declaration, as provided in C2017G00618 (Gazette), involve the formal declaration by Mike Mrdak, the Secretary of the Commonwealth Department of Infrastructure and Regional Development, that two specific funds managed by AMP Capital Investors Limited are designated as distanced investment funds. This is pursuant to Regulation 4.03 of the Airports (Ownership – Interests in Shares) Regulations 1996. Specifically, the declaration identifies AMP Capital Core Infrastructure Fund and AMP Capital Diversified Infrastructure Trust as distanced investment funds (sections 1-2). This legal action formalises the status of these funds, thereby ensuring compliance with the regulations governing airport ownership and investments. Under the Airports (Ownership – Interests in Shares) Regulations 1996, the declaration imposes specific obligations on the entities involved. The designated distanced investment funds must adhere to the regulatory framework governing their operations, particularly in relation to their investments in airport shares. This ensures that these funds maintain a sufficient distance from the operational control of the airports in which they invest, thereby preventing any undue influence or conflicts of interest (section 3). The declaration also places responsibilities on AMP Capital Investors Limited as the fund manager, ensuring that they manage these funds in compliance with the regulations set forth. Failure to comply with the regulations governing distanced investment funds can result in significant legal consequences. Any breaches of the Airports (Ownership – Interests in Shares) Regulations 1996 can lead to civil or criminal penalties. The exact penalties for breaches are not detailed in the declaration but can include fines and other enforcement actions as stipulated in the relevant regulations. The severity of the penalties depends on the nature and extent of the breach, with the potential for significant financial and reputational damage for the entities involved (section 4). It is essential for the parties involved to maintain strict adherence to these regulatory requirements to avoid such consequences.