Declaration of Substantially Australian Investment Fund - SAPR 67/2017

Overview

The Airports (Ownership – Interests in Shares) Regulations 1996 were amended in 2017 to address the need for clear guidelines on what constitutes a substantially Australian investment fund for the purposes of owning shares in Australian airports. Enacted by the Commonwealth Parliament, this regulation aims to ensure that investment in critical infrastructure such as airports is controlled by entities that align with Australian economic and strategic interests. The declaration issued by the Secretary of the Department of Infrastructure and Regional Development under Regulation 2.07 identifies specific funds managed by AMP Capital Investors Limited as substantially Australian investment funds, thereby enabling these entities to participate in the ownership and management of airport shares in compliance with the regulatory framework. The 2017 declaration specifically names the AMP Capital Core Infrastructure Fund and the AMP Capital Diversified Infrastructure Trust as funds that meet the criteria for being substantially Australian. This legislative action was taken to provide clarity and certainty regarding the ownership of shares in Australian airports by investment funds, ensuring that such investments are aligned with national economic policies and security considerations. By declaring these funds as substantially Australian, the regulation facilitates their involvement in airport investments, while maintaining oversight to protect Australian interests.

Scope and Application

The Declaration of a Substantially Australian Investment Fund, issued by the Department of Infrastructure and Regional Development under the Airports (Ownership – Interests in Shares) Regulations 1996, specifically identifies two funds managed by AMP Capital Investors Limited as substantially Australian investment funds. These funds, AMP Capital Core Infrastructure Fund and AMP Capital Diversified Infrastructure Trust, are now recognised under this legislation, which applies to the entities managing these investment funds within the Australian financial sector. The geographic reach of this Act pertains to the Commonwealth, and it is designed to ensure that investment funds meeting the criteria are substantially Australian in nature, thus impacting entities involved in the ownership and management of these funds. The Act does not explicitly state any exclusions, exemptions, or thresholds within the declaration itself, but it relies on the broader regulatory framework of the Airports (Ownership – Interests in Shares) Regulations 1996, which may include such provisions in subordinate instruments.

Key Provisions

The legislation, C2017G00620, declares that two specific funds managed by AMP Capital Investors Limited are substantially Australian investment funds. These funds are the AMP Capital Core Infrastructure Fund and the AMP Capital Diversified Infrastructure Trust (section 1). This declaration is made under Regulation 2.07 of the Airports (Ownership – Interests in Shares) Regulations 1996 and is signed by Mike Mrdak, the Secretary of the Commonwealth Department of Infrastructure and Regional Development, dated 4th June 2017. This declaration is a formal recognition that these funds meet the criteria for being considered substantially Australian investment funds, which may have implications for ownership and control in certain sectors, particularly aviation. The declaration imposes specific obligations on the entities managing these funds, AMP Capital Investors Limited, ensuring that they maintain the substantial Australian investment status of the funds. This involves compliance with the relevant regulations and continuous adherence to the criteria that define a substantially Australian investment fund. The entities must ensure that the funds remain predominantly invested in Australian assets and that the majority of the fund's beneficial ownership remains with Australian residents or entities. Failure to maintain the substantially Australian investment status of the funds may result in various legal and financial consequences. Although the specific offences, penalties, or consequences are not detailed in the text provided, under the Airports (Ownership – Interests in Shares) Regulations 1996, non-compliance could lead to regulatory actions, fines, or even the revocation of rights to own or control shares in Australian airports. The maximum penalties would depend on the nature and severity of the breach, as well as the specific provisions of the relevant regulations. It is important for AMP Capital Investors Limited to ensure strict compliance to avoid such repercussions.