Overview

The Migration Regulations 1994 were enacted to establish the framework for the regulation of migration in Australia, including provisions on financial requirements for visa applicants. The Explanatory Statement for the Eligible Managed Fund Investments under Regulation 5.19B, made in 2012, aims to clarify and specify the types of managed fund investments that are considered compliant for the purposes of meeting the financial criteria for migration. This regulation is an instrument made under the authority provided in paragraph 5.19B(2)(c) of the Migration Regulations 1994, which mandates that investments in managed funds must be for purposes specified by the Minister through a written instrument. The policy objective behind this regulation is to ensure that investments by visa applicants are directed towards productive and approved financial sectors within Australia, thereby supporting national economic interests. The instrument lists specific types of investments considered eligible, including infrastructure projects, cash held by Australian financial institutions, government and corporate bonds, real estate, agribusiness, and other regulated managed funds. This regulation was developed following consultations with various government departments and industry stakeholders, and it commenced on 24 November 2012.

Scope and Application

The Migration Regulations 1994, as amended, specify the types of investments that are eligible for managed fund schemes under the Migration Act 1958. Regulation 5.19B, and in particular the related instrument F2012L02238, delineates the eligible managed fund investments that meet the regulatory requirements for migration purposes. This regulation applies to any person making an investment in a managed fund for the purposes of complying with the Migration Regulations. The scope of the regulation encompasses investments in various asset classes including infrastructure projects, cash held by Australian deposit-taking institutions, bonds issued by Australian governments or financial institutions, real estate, Australian agribusiness, and other ASIC-regulated managed funds that invest in these specified assets. The regulation has a national jurisdictional reach, applying across Australia, and it specifies the types of investments that can be considered compliant for migration purposes. The regulation does not specify any exclusions or exemptions but rather defines the permissible scope of investments. Subordinate instruments may extend or refine the application of these regulations, providing further clarification or updates as necessary.

Key Provisions

The Migration Regulations 1994, specifically Regulation 5.19B, delineate the criteria for a complying investment by a person in a managed fund, either directly or via an investor directed portfolio service (subreg. 5.19B(1)). To be considered a complying investment, the fund must be invested in assets specified by the Minister through an instrument in writing (subreg. 5.19B(2)(c)). The Explanatory Statement outlines the purpose of this particular instrument, which is to specify the eligible managed fund investments that meet these criteria. These eligible investments include infrastructure projects in Australia, cash held by Australian deposit-taking institutions, bonds issued by the Commonwealth or State/Territory governments, bonds, equity, hybrids, or other corporate debt in companies and trusts listed on any Australian Stock Exchange, bonds or term deposits issued by Australian financial institutions, real estate in Australia, Australian agribusiness, and other ASIC-regulated managed funds that invest in these specified assets (subreg. 5.19B(2)(c)). These provisions ensure that the investments made by eligible investors under the Migration Regulations 1994 are directed towards sectors that are likely to be beneficial for the Australian economy and are regulated to ensure stability and transparency. The Act imposes obligations on the parties or entities it governs, specifically ensuring that investments made by eligible individuals are directed towards the specified assets listed in the regulations. This includes adherence to the categories of investments mentioned, such as infrastructure projects, bonds, real estate, and so on. Financial institutions and managed funds must ensure that the investments made by eligible individuals comply with these provisions. This regulation also places a responsibility on ASIC to monitor and regulate these investments to maintain compliance and transparency. Failure to comply with these regulations may result in civil or criminal consequences. Although the specific penalties are not detailed in the explanatory statement, breaches of the Migration Regulations 1994 can generally lead to penalties under the relevant legislation. Civil penalties can include fines, and in severe cases, criminal penalties may apply. The maximum penalties can vary depending on the specific breach and the provisions of the primary legislation that the regulations are made under. It is important for entities and individuals to be aware of these potential consequences and to ensure strict compliance with the regulations.