Disclosure Requirements - Investment Funds - Australia
Disclosure Category: 1
Clearstream Banking S.A. (“CBL”) may fall under an obligation to disclose the identity and holdings of customers and/or ultimate beneficial owners in the case of holding Australian investment funds.
In order to comply with the applicable legislation, customers holding Australian investment funds or entering into transactions in the Australian market must consent and are hereby deemed to consent to the required legal disclosure. Such consent includes the appointment of the requestor (for example, the fund manager and its agents, the regulators) as their attorney-in-fact, under power of attorney, to collect from CBL the required information to be disclosed. Customers who do not grant such authority to CBL cannot hold such investment funds or financial instruments in their accounts with CBL.
Background and legal basis
Customers are advised that local laws and regulations may require CBL to disclose, within two (2) business days from the request, the name and address (or other details) of the underlying customers and/or beneficial ownership to the authorised requestors (for example, the fund manager and its agents, the regulators).
Legal basis for disclosure requirement may arise from the following:
- Corporations Act 2001 (Cth)
- Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act)
- Know Your Customer (KYC) / Customer Due Diligence (CDD) requirement
- The Foreign Account Tax Compliance Act (FATCA)
Obligation to report threshold crossings
Notifiable actions under Foreign Acquisitions and Takeovers Act 1975 (FATA)
Under the Australian Foreign Investment laws, a foreign person/entity who proposes to take a notifiable action (significant action) must give notice to the Australian Treasurer before taking the action. Customers’ proposed or additional holding of Australian investment funds through CBL may require notification and approval of the Australian Treasurer.
The triggers for notification under FATA are complex and customers are advised to seek independent legal advice concerning FATA before instructing CBL.
Substantial Holdings Requirements
Corporations Act 2001 obliges a person (alone or together with his associates) who has relevant interests in voting shares representing 5% or more of the votes in a listed company, body or managed investment scheme, to disclose details of his relevant interest. Disclosure is also required when the person begins to have, or ceases to have a substantial holding, or involves a substantial holding change by 1%.
Failure to disclose a substantial holding or comply with a disclosure notice from the requestor (for example, the fund manager and its agents, the regulators) is a strict liability offence under the Corporations Act. Non-compliance may result in fines, remedial orders, civil claim for damages and compensation, and/or commencement of criminal proceedings.
The customer undertakes to hold CBL harmless and to indemnify CBL from any loss, claim, liability or expense asserted against or imposed upon CBL as a result of the customer failure, whatever the failure, to comply with these disclosure requests.