Declaration of a Substantially Australian Investment Fund SAPR 1/2022

Overview

The Airports (Ownership – Interests in Shares) Regulations 1996, amended by C2022G00123 (Gazette) enacted on 10 February 2022, aims to address the need for clear criteria in determining the Australian ownership of investment funds that hold interests in airport shares. This legislation was introduced by the Department of Infrastructure, Transport, Regional Development and Communications to ensure that any investment in Australian airports remains substantially Australian-owned. The policy objective of this regulation is to maintain the integrity and control of Australian aviation infrastructure within Australian hands, providing a safeguard against foreign entities gaining undue influence over critical national assets. The declaration issued under this regulation by Simon Atkinson, Secretary of the Department, identifies the Jandakot Airport Domestic Trust, managed by Dexus Wholesale Management Limited, as a substantially Australian investment fund. This formal recognition ensures that the fund meets the stringent ownership criteria set out by the Airports Act 1996 and its associated regulations, thereby upholding the legislative intent to protect and promote Australian interests in the aviation sector.

Scope and Application

The declaration outlined in the Airports (Ownership – Interests in Shares) Regulations 1996, specifically under Regulation 2.07, pertains to the identification and categorisation of investment funds in relation to their Australian ownership status. This applies to entities managing such funds, such as Dexus Wholesale Management Limited, identified in this instance as the manager of the Jandakot Airport Domestic Trust. The declaration signifies that the trust in question is recognised as a substantially Australian investment fund, which may have implications for compliance with Australian regulatory requirements concerning foreign investment in Australian infrastructure, particularly airports. This jurisdictional reach is significant for the Commonwealth and potentially impacts all entities involved in the management and operation of airport assets within Australia, ensuring adherence to the regulatory framework designed to protect national interests in critical infrastructure sectors. No exclusions, exemptions, or specific thresholds are explicitly stated within this declaration; however, the broader regulatory context may include additional conditions or requirements that apply to the investment fund's operations and ownership structure.

Key Provisions

The key operative sections of the Declaration of a Substantially Australian Investment Fund (SAPR 1/2022) include the declaration itself, which identifies the fund managed by Dexus Wholesale Management Limited (ACN 159 301 907) as a substantially Australian investment fund (section 1). This declaration is made under the authority of Regulation 2.07 of the Airports (Ownership – Interests in Shares) Regulations 1996. The declaration specifically names the Jandakot Airport Domestic Trust as the fund in question, which is managed by Dexus Wholesale Management Limited. This formal declaration is necessary to ensure that the fund qualifies under the Australian investment criteria, which is pivotal for compliance with aviation ownership regulations. The Act imposes several obligations and requirements on the parties involved. Primarily, it mandates that the fund must meet the criteria for being classified as substantially Australian. This includes ensuring that the majority of the fund’s assets are held by Australian residents or entities that are subject to Australian law and regulation. The declaration itself must be made in a formal and documented manner, as evidenced by the signature of the Secretary of the Commonwealth Department of Infrastructure, Transport, Regional Development and Communications, Simon Atkinson. Additionally, Dexus Wholesale Management Limited must maintain records and documentation to substantiate the fund’s compliance with these criteria. These requirements are critical to uphold the integrity and legality of the investment fund’s status under Australian law. Failure to comply with the provisions of this declaration could result in several civil or criminal consequences. Although the specific offences and penalties are not detailed in the document, breaches of investment regulations in Australia can typically lead to fines, legal penalties, and in severe cases, criminal charges. The maximum penalties for such breaches can vary widely depending on the nature and severity of the non-compliance, but can include substantial fines and, in extreme cases, imprisonment. The enforcement of these penalties is intended to ensure that investment funds adhere to the regulations governing their operation and ownership, thereby maintaining the integrity of the Australian investment landscape.