Starting a managed investment scheme

What are managed investment schemes?
Registering a managed investment scheme
Compliance plans
More information

What are managed investment schemes?

Managed investment schemes are also known as 'managed funds', 'pooled investments' or 'collective investments'. Generally in a managed investment scheme:

people are brought together to contribute money to get an interest in the scheme ('interests' in a scheme are a type of 'financial product' and are regulated by the Corporations Act 2001)
money is pooled together with other investors (often many hundreds or thousands of investors) or used in a common enterprise
a 'responsible entity' operates the scheme. Investors do not have day to day control over the operation of the scheme.

Managed investment schemes cover a wide variety of investments. Some of the popular managed investment schemes that may be offered include:

cash management trusts
property trusts
Australian equity (share) trusts
many agricultural schemes (eg horticulture, aquaculture, commercial horse breeding)
international equity trusts
some film schemes
timeshare schemes
some mortgage schemes
actively managed strata title schemes.

What types of investments are NOT managed investments schemes?

Generally, only investments that are 'collective' are managed investment schemes. Some examples of investments that are not managed investments schemes include:

regulated superannuation funds
approved deposit funds
debentures issued by a body corporate
barter schemes
franchises
direct purchases of shares or other equities
schemes operated by an Australian bank in the ordinary course of banking business (eg term deposit).

For information about investing in managed investment schemes go to our consumer website, FIDO

Registering a managed investment scheme

New managed investment schemes must be registered with us before they can operate. To register a scheme the proposed responsible entity must be:

a registered Australian public company, and
hold an Australian financial services (AFS) licence authorising the responsible entity to operate the scheme.

If the proposed responsible entity does not hold an AFS licence authorising it to operate the scheme, it should ensure an application for an AFS licence, or variation of an existing licence, has been submitted to us before applying for registration of the scheme.

How to apply for an AFS licence or variation of a current licence

For more information read:

Regulatory Guide 104 Licensing: Meeting the general obligations

Regulatory Guide 105 Licensing: Organisational competence

How to register a scheme

Current AFS licensees can lodge Form 5100 online through either the AFS licensee portal or the registered agent portal.

New AFS licence applicants can lodge form 5100 online through the registered agent portal.

Alternatively, you can download a copy of Form 5100

.

On the registration form you will be asked to describe how scheme funds will be applied and what investment strategies are likely to be adopted.

Scheme kinds identified for licensing purposes are:

financial assets - this category includes cash, fixed interest securities, equities and related securities, property securities, and schemes that invest in interests in managed investment schemes
derivatives
mortgages
member discretionary master funds and similar schemes
IDPS-like
direct real property
stable property trusts or syndicates
listed property trusts
service strata schemes
primary production - these schemes will be further categorised according to the type of scheme eg horticulture, aquaculture and forestry
film schemes
time-sharing schemes

If you register a scheme online, you must attach copies of:

The scheme's constitution (as defined by s601GA).
For more information read Regulatory Guide 134

Managed Investments: Constitutions

The scheme's compliance plan (as defined by s601HA and signed in accordance with s601HC).
For more information read:

	- our compliance plan commentaries, and
	- Regulatory Guide 132 Managed investments: Compliance plans
	- Regulatory Guide 133 Managed investments: Scheme property arrangements

Form 5103

- a statement signed by the directors of the proposed responsible entity that:

(a)	the scheme's constitution complies with s601GA and 601GB; and
(b)	the scheme's compliance plan complies with s601HA.

An annexure that cross references the contents of a constitution required by s601GA and s601GB to the equivalent provisions in the scheme's constitution.

If necessary, agent's authorities appointing another person to sign the compliance plan (see Reg 5C.4.01).

You will be invoiced for the $2010 application fee.

You must retain the original documents for a period of 7 years from the date on which you lodged the form online.

If you register on paper make sure you send us:

1.	The completed application form and fee payment of $2010
2.	Copies of the documents listed above.
3.	An extra photocopy of the completed application and each of the above documents.
	Send these to: Australian Securities & Investments Commission, GPO Box 9827 In your capital city.

Compliance plans

Regulatory Guide 132 Managed investments: Compliance plans gives you guidance on how to prepare a compliance plan for a managed investment scheme. It includes, as an annexure, illustrative guidance on what might be included in a compliance plan.

Download a copy of RG 132 as a PDF file

Commentaries

You'll prepare more effective compliance plans after you've read our commentaries, which summarise the better plans we've received over the last two years from the managed investments industry. Read our comments and examples when preparing your next plan. Download a copy of our commentaries on compliance plans for:

RG 116 Commentary on compliance plans: Agricultural industry schemes

RG 117 Commentary on compliance plans: Financial asset schemes

RG 118 Commentary on compliance plans: Contributory mortgage schemes

RG 119 Commentary on compliance plans: Pooled mortgage schemes

RG 120 Commentary on compliance plans: Property schemes

We released these commentaries on 15 April 2004. For more information, read our Information release 04-15.

Auditing compliance plans