Under the Corporations Act, a managed investment scheme must be registered with ASIC when it satisfies the statutory registration requirements, including where it has more than 20 members, is promoted by a person who operates multiple managed investment schemes, or is otherwise required to be registered. An unregistered scheme must not be operated where registration is required.
Expanded Answer
The Corporations Act sets out when a managed investment scheme must be registered with ASIC. Registration is generally required where the scheme has more than 20 members, where the scheme is promoted by a person who operates another managed investment scheme, or where ASIC requires registration under the legislation. Registration brings the scheme within the regulatory framework for registered managed investment schemes, including the appointment of a responsible entity and ongoing governance, compliance and reporting obligations.
Not every managed investment scheme requires registration. Some schemes may remain unregistered where they fall outside the statutory registration requirements. However, operators should assess the registration criteria carefully before offering interests or accepting investments, as an incorrect assessment may result in operating an unregistered scheme in breach of the Corporations Act.
Applies when:
- The scheme satisfies one or more of the statutory registration criteria.
- The operator intends to carry on the scheme as a registered managed investment scheme.
Not required when:
The scheme doesn’t meet the legislative registration thresholds or another statutory exception applies.
Why it matters
Operating a managed investment scheme that should be registered, but is not, can expose operators to ASIC enforcement action, civil penalties and significant governance and compliance risks. Determining registration requirements early helps avoid unlawful operation.
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Practical guidance
- Assess the scheme against the statutory registration criteria before accepting investors.
- Review registration requirements whenever the scheme’s membership or structure changes.
- Obtain registration and establish the required governance arrangements before operating a scheme that must be registered.
Further reading
Managed Investment Schemes and AFSL Requirements
What are the requirements for an AFSL? A Practical Guide for Prospective Licensees