Pooled Development Funds Regulations 2018

Administered by Department of Industry, Science and Resources

Legislation au F2018L01291 Regulations In force Legislative Instrument

Legislation content

 

EXPLANATORY STATEMENT

Issued by the authority of the Minister for Industry, Science and Technology

Pooled Development Funds Act 1992

Pooled Development Funds Regulations 2018

Purpose and Operation

The purpose of the Pooled Development Funds Regulations 2018 is to remake and update the Pooled Development Funds Regulations, which are due to sunset on 1 October 2018.

The Regulations remake the Pooled Development Funds Regulations without substantive change. They improve the former Regulations by repealing redundant provisions, updating language and aligning with current drafting practices. The key provisions:

  • remake the definition of excluded activity, which prohibits pooled development funds (PDFs) from investing in companies whose primary activity is retail or real estate, without approval from Innovation and Science Australia; and
  • remake the definition of unregulated investment, which allows PDFs to make interest bearing investments. Ordinary share investments in companies (which are not pre‑owned) are allowed investments.

The Regulations are a legislative instrument for the purposes of the Legislation Act 2003.

Further details of the Regulations are set out in Attachment A.

Authority

Section 76 of the Pooled Development Funds Act 1992 (the Act) provides that the Governor‑General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

Consultation

Consultation on the proposal to remake the sunsetting Regulations was conducted with all remaining PDFs and the industry peak body, the Australian Private Equity and Venture Capital Association (AVCAL). Ten responses were received from PDFs. A substantial majority of PDFs said either that the changes in relation to superseded or outdated references were appropriate, or that they had no objections. AVCAL did not comment on the changes.

Regulatory impact

The Office of Best Practice Regulation (OBPR) has advised that a Regulation Impact Statement is not required for this legislative instrument (OBPR ID 22703).

Commencement

The Regulations commence on the day after they are registered on the Federal Register of Legislation.

Statement of Compatibility with Human Rights

A Statement of Compatibility with Human Rights is at Attachment B. The Legislative Instrument is compatible with human rights as it does not raise any human rights issues.


ATTACHMENT A

 

Details of the Pooled Development Funds Regulations 2018

 

Section 1 – Name

 

This section provides that the name of the Regulations is the Pooled Development Funds Regulations 2018.

 

Section 2 – Commencement

 

This section provides that the Regulations commence on the day after they are registered on the Federal Register of Legislation.

 

Section 3 – Authority

 

This section provides that the Regulations are made under the Pooled Development Funds Act 1992.

 

Section 4 – Schedules

 

This section provides that each instrument that is specified in a Schedule to the Regulations is amended or repealed as set out in the applicable items in the Schedule concerned, and any other items in a Schedule to these Regulations has effect according to its terms.

 

Section 5 - Definitions

 

This section defines the terms used in the Regulations. The definition of authorised money market dealer has been updated to reflect current law. Section 11 of the Financial Sector (Collection of Data) Act 2001 requires the Australian Prudential Regulation Authority (APRA) to keep a list of registered entities, divided into categories as APRA determines.

 

Section 6 – Excluded activities

 

This section prescribes the activities for the purposes of the definition of excluded activity in subsection 4(1) of the Act. This section prescribes the activities in which a Pooled Development Fund may not invest funds.

 

Section 7 – Unregulated investments

 

This section prescribes the kinds of investments for the purposes of the definition of unregulated investment in subsection 4(1) of the Act. This section prescribes investments in which money may be put if not immediately invested in eligible companies or used for the running costs of the fund.

 

 

Schedule 1 – Repeals

 

This Schedule provides for the repeal of the Pooled Development Funds Regulations as the instrument is due to sunset on 1 October 2018 and is being remade by the Regulations.

ATTACHMENT B

 

Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Pooled Development Funds Regulations 2018

These regulations are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Pooled Development Funds Regulations 2018 remake and improve the Pooled Development Funds Regulations, which are scheduled to sunset on 1 October 2018, by amending or removing provisions and updating terminology and references.

The key provisions:

  • prescribe the activities for the purposes of the definition of excluded activities in the Pooled Development Funds Act 1992 (the Act), which prohibit pooled development funds (PDFs) from investing in companies whose primary activity is retail or real estate; and
  • prescribe the kinds of investments for the purposes of the definition of unregulated investments in the Act, which allow PDFs to make interest bearing investments as well as ordinary share investments in companies.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

 

The Honourable Karen Andrews MP

Minister for Industry, Science and Technology

Overview

The Pooled Development Funds Regulations 2018 were enacted to update and remake the existing Pooled Development Funds Regulations, which were due to sunset on 1 October 2018. The purpose of this regulation is to ensure continuity and compliance with current practices by repealing redundant provisions, updating language, and aligning with current drafting practices. This legislative instrument was introduced to address the need for modernising and maintaining regulatory oversight over pooled development funds, ensuring that these funds operate within prescribed boundaries and do not engage in prohibited activities such as investing in retail or real estate without appropriate approval. The enacting body for these regulations is the Parliament of Australia, with the Minister for Industry, Science and Technology having the authority to make these regulations under Section 76 of the Pooled Development Funds Act 1992. The policy objective is to provide a clear framework for the operation of pooled development funds, ensuring they contribute effectively to the development and innovation sectors in Australia.

Scope and Application

The Pooled Development Funds Regulations 2018 applies to pooled development funds (PDFs) as defined under the Pooled Development Funds Act 1992, which generally means entities that pool funds from investors to invest in eligible companies. These Regulations have a national jurisdictional reach, applying across Australia as they are made under Commonwealth legislation. The Regulations are designed to update and improve the existing Pooled Development Funds Regulations, which were due to sunset on 1 October 2018, by removing outdated provisions, updating terminology, and aligning with current drafting practices. The Regulations remake the definition of excluded activities, which restricts PDFs from investing in companies primarily involved in retail or real estate without approval from Innovation and Science Australia. It also remakes the definition of unregulated investments, allowing PDFs to make interest-bearing investments while permitting ordinary share investments in companies. The Regulations themselves do not introduce new substantive changes but aim to ensure clarity and compliance with current legal standards. Additionally, the Regulations can be extended or restricted through subordinate instruments, as permitted under section 76 of the Pooled Development Funds Act 1992.

Key Provisions

The main operative sections of the Pooled Development Funds Regulations 2018 (Regs) provide detailed definitions and specifications regarding the activities and investments of pooled development funds (PDFs). Section 6 of the Regs (s 6) outlines the "excluded activities" (s 6(1)) that PDFs cannot invest in without prior approval from Innovation and Science Australia. This includes investments in companies primarily engaged in retail or real estate activities (s 6(2)). Section 7 of the Regs (s 7), on the other hand, details the "unregulated investments" (s 7(1)) that PDFs can make. This includes interest-bearing investments and ordinary share investments in companies that are not pre-owned (s 7(2)-(3)). These definitions are crucial as they shape the permissible investment activities of PDFs under the Pooled Development Funds Act 1992 (the Act). The Regs impose specific obligations on PDFs to adhere to the outlined definitions of excluded activities and unregulated investments. For instance, PDFs must ensure that their investments do not fall under the category of excluded activities without obtaining the necessary approval (s 6(1)-(2)). Additionally, they must ensure their investments comply with the permitted unregulated investments, which include interest-bearing investments and specified share investments (s 7(2)-(3)). These obligations are designed to maintain the integrity and purpose of the funds, ensuring they are directed towards eligible and approved activities. Any breach of the provisions outlined in the Regs can result in legal consequences. While the Regs themselves do not specify penalties, any non-compliance with the Act could lead to enforcement actions. Such actions may include administrative penalties, fines, or legal proceedings as outlined under the Act. The precise penalties would depend on the specific breach and the discretion of the relevant authorities. It is important for PDFs to adhere strictly to the regulations to avoid any potential legal repercussions.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.