So you are thinking of setting up a Managed Investment Scheme? Or Perhaps you have been approached to invest in a Managed Investment.
A managed investment scheme is a scheme that enables a group of investors to contribute money that is pooled for investment to produce a financial benefit. Section 9 of the Corporations Act 2001 (Cth) contains the definition of a managed investment scheme, which must have three particular features:
- Investors contribute money or money’s worth as consideration to acquire rights (interests) to benefits that are produced by the scheme;
- All contributions from investors are pooled or used for a common purpose to further produce benefits. Benefits may be financial or consist of rights or interests in property; and
- The members of the scheme (investors) are not active in controlling the scheme’s day-to-day operations.
Generally these investments are divided into 2 types;
- A Registered Managed Investment Scheme, this is the type that is most tightly regulated and can be offered to what is called a retail investor.
- A Unregistered Managed Investment Scheme, this type of scheme is generally only open to wholesale investors and is less tightly regulated.
In either case if you are looking to invest in a managed investment its important you read all the associated offer documents carefully and ensure you understand them, if you are not comfortable with the documents then do not sign them! If you have any doubts do get professional financial advice.
Alan Maddick has many years as a Responsible Manager involved in running Financial Services Licenses so if you are presented with an investment and would like a second opinion or are having some trouble with running your Managed Investment Scheme please dont hesitate to get in touch.