In this Funds Update for 22 September 2023:
- ASIC remakes three class orders for managed fund issues and withdrawals
- 2023–24 NSW Budget Update: Key stamp duty changes
- ASIC commences civil penalty provisions against crypto exchange provider for alleged DDO failures
ASIC remakes three class orders for managed fund issues and withdrawals
On 15 September 2023, ASIC announced that it has remade three class orders that were due to expire on 1 October 2023. The class orders are:
- [CO 13/655] – provisions about the amount of consideration to acquire interests and withdrawal amounts not covered by ASIC Corporations (Managed Investment product consideration) Instrument 2015/847;
- [CO 13/656] – equality of treatment impacting on the acquisition of interest; and
- [CO 13/657] – discretions affecting the amount of consideration to acquire interests and withdrawal amounts.
The new legislative instruments that replace these class orders will expire on 1 October 2028.
ASIC has announced that it plans to update Regulatory Guide 134 Funds Management: Constitution to reflect the release of the new instruments.
2023-24 NSW Budget Update: Key stamp duty changes
On 19 September 2023, NSW Treasurer Daniel Mookhey handed down the new Labor Government’s first budget, with significant changes being made to the state taxes regime in NSW. The new revenue measures are expected to lead to an increase in revenue of almost $1 billion over four years and have implications for investors in, and managers of, managed funds.
The key reforms to be introduced under the Treasury and Revenue Legislation Amendment Bill 2023 (NSW) include:
- Lower dutiable threshold for unit trusts: the existing 50% threshold for imposing landholder duty on the acquisition of an interest in a unit trust which holds land in NSW is reducing to 20%. This means that an acquisition of 20% or more in an unlisted, unregistered unit trust will attract duty on the value of land and goods in New South Wales.
- New registration regime for wholesale unit trusts: to mitigate the impact on wholesale investors, certain unit trusts will be able to register as wholesale unit trusts which will restore the 50% threshold for the imposition of duty.
- Lower tracing threshold for landholder duty: presently, an entity is generally deemed to have an interest in the landholdings of a downstream entity if it holds an interest of 50% or more in that entity. This threshold will be reduced to an interest of 20% or more.
- Increases in nominal and fixed duty including that a declaration of trust executed in NSW over non-dutiable or unidentified property will attract $750 duty (rather than $500).
To read more about these reforms, see our blog post of 19 September 2023 here.
ASIC commences civil penalty provisions against crypto exchange provider for alleged DDO failures
On 21 September 2023, ASIC announced that it has commenced civil penalty proceedings against a crypto exchange provider for failing to make a target market determination for a margin trading product (a credit facility).
We have previously reported on DDO stop orders issued by ASIC in our Funds Updates of 28 July 2023, 30 June 2023, 16 June 2023, 2 June 2023, 19 May 2023, 21 April 2023, 24 March 2023, 10 March 2023, 24 February 2023, 13 January 2023, 2 December 2022,18 November 2022, 21 October 2022, 7 October 2022, 23 September 2022 and 29 July 2022, and on ASIC’s two other DDO civil penalty proceedings in the Federal Court on 16 December 2022.