ASIC releases instrument to facilitate AMIT amendments to registered scheme constitutions without member approval

As foreshadowed in our earlier publication Talking Tax Issue 38, ASIC has issued ASIC Corporations (Attribution Managed Investment Trusts) Instrument 2016-489 (AMIT Instrument) which facilitates amendments to registered managed investment scheme constitutions in order to enter the new Attribution Managed Investment Trust (AMIT) regime, without the need to hold unit holders’ meetings.

The AMIT regime was enacted on 5 May 2016 and is discussed in detail in our earlier publication New AMIT Rules.

ASIC has also granted relief from the duty to treat members who hold interests of the same class equally where responsible entities attribute part of a determined trust component to a member under the AMIT regime. This will also reduce uncertainty about breaches of the duty to treat members equally without compromising fairness.

The relief allows responsible entities to amend scheme constitutions so the scheme is able to be operated in a manner permitted by the AMIT regime without holding a unitholders’ meeting.

Responsible entities wanting to take advantage of the relief and make changes to a scheme’s constitution will need to publish a notice on their website explaining that they intend to change the constitution, summarising the reasons for this and the effect of the changes. The notice must also include a statement that the responsible entity will change the scheme’s constitution in the way it has identified unless it receives a request to call and hold a meeting of unitholders from members with at least 5% of the votes that could be cast on a special resolution.

Members will have at least 7 days from the date the responsible entity places the notice on the website to request a meeting. If no members’ meeting is required, responsible entities can make the amendments without the need for member approval.

Where a change is made, a copy of the amendments will need to be lodged with ASIC before the changes can take effect. Responsible entities will also need to give each member a further notice summarising the reasons for the changes and the effect of the changes the next time they send a communication to all members.

For registered schemes where all interests are held by wholesale clients, responsible entities can choose to follow the above process, or alternatively, make changes where it has taken reasonable steps to consult with each member before making the changes.

The Hall & Wilcox tax and financial services teams are assisting clients with making amendments to their trust deeds and constitutions to facilitate entry into the AMIT regime (including preparation of the notice required under the AMIT Instrument). Please contact us if you require any assistance.