Declaration of a Substantially Australian Investment Fund SAPR 62/2023

Overview

The Declaration of a Substantially Australian Investment Fund (SAI Fund) instrument, numbered F2023N00150 and dated 1st June 2023, was enacted by Jim Betts, Secretary of the Commonwealth Department of Infrastructure, Transport, Regional Development, Communications and the Arts. The regulation was introduced to address a specific gap in the Airports (Ownership – Interests In shares) Regulations 1996, aiming to clarify and facilitate the identification and recognition of investment funds that meet the criteria of being substantially Australian. This instrument serves to officially declare that the Dexus Core Infrastructure Fund, managed by Dexus Capital Funds Management Limited, qualifies as a Substantially Australian Investment Fund, thereby enabling its eligibility under the aforementioned regulations. The enactment aims to streamline compliance and regulatory processes, ensuring that investment funds that meet the specified criteria are properly identified and managed within the framework of the Airports Act.

Scope and Application

The Airports (Ownership – Interests in Shares) Regulations 1996, under the authority of the Secretary of the Commonwealth Department of Infrastructure, Transport, Regional Development, Communications and the Arts, apply to entities that hold or propose to hold substantial interests in the shares of companies involved in airport operations. The declaration made under this legislation identifies the Dexus Core Infrastructure Fund, managed by Dexus Capital Funds Management Limited, as a Substantially Australian Investment Fund. This declaration is significant as it ensures compliance with the regulations concerning the ownership and management of shares in entities that have interests in Australian airports. The jurisdictional reach of these regulations is national, applying across all states and territories of Australia, and they are enforced under the Commonwealth framework. There are no exclusions, exemptions, or thresholds specified in the text provided, and any further application or restrictions would be determined through subordinate instruments as deemed necessary by the relevant authorities.

Key Provisions

The key operative sections of this notifiable instrument, F2023N00150, pertain to the declaration of a Substantially Australian Investment Fund (SAI Fund) under the Airports (Ownership – Interests In shares) Regulations 1996 (section 2.07). Specifically, Section 1 of the instrument declares that the Dexus Core Infrastructure Fund, managed by Dexus Capital Funds Management Limited, is designated as an SAI Fund. This declaration was made on 1st June 2023 by Jim Betts, Secretary of the Commonwealth Department of Infrastructure, Transport, Regional Development, Communications and the Arts (section 2). The obligations imposed by this declaration are primarily administrative and informational. The Secretary’s role is to ensure that the fund meets the criteria for being classified as an SAI Fund, which generally means that the fund's assets are predominantly invested in Australian businesses or property. The entity managing the fund, Dexus Capital Funds Management Limited, must maintain records and documentation that support the fund’s compliance with these criteria. These records must be readily available for review by the relevant authorities to ensure ongoing compliance with the designation as an SAI Fund. Breaches of the requirements governing the classification of an SAI Fund may not be explicitly detailed in this notifiable instrument. However, under the broader regulatory framework of the Airports (Ownership – Interests In shares) Regulations 1996, non-compliance could result in significant consequences. For instance, if the fund does not maintain its status as an SAI Fund, the Secretary may revoke the designation. This could lead to legal and financial repercussions for the fund managers, including potential financial penalties or legal action. While the specific penalties are not detailed in this instrument, they could potentially include fines and other sanctions as prescribed by the applicable regulations and laws.