ASIC has issued a revised policy and regulatory framework for charities that raise investment funds.
The updates include:
- from 1 January 2017, charitable investment fundraisers will not be permitted to issue at-call or investments with a term of less than 31 days to retail investors
- from 1 January 2018, charitable investment fundraisers that wish to issue investments to retail investors who are not associated with the charity will no longer be exempted from the requirement to hold for Australian financial services licence from ASIC. Further, additional restrictions apply that are designed to avoid the investments being used for transactional facilities.
The changes have been made in consultation with the Australian Prudential Regulation Authority (APRA) to ensure there are no inappropriate inconsistences in their policy position. Some charitable investment fundraisers are Religious Charitable Development Funds which rely on APRA’s exemption from the Banking Act.(see here).
The changes are contained in ASIC Corporations (Charitable Investment Fundraising) Instrument 2016/813 and a new version of Regulatory Guide 87 Charitable investment fundraising and school enrolment deposits.
Schools will continue to be permitted to accept enrolment deposits without the requirement to comply with the relevant provisions of the Corporations Act.