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  • Widely held requirement

    The 'widely held' requirements differ depending on whether the MIT is:

    Registered MIS that is a retail trust

    A registered MIS that is a retail trust is widely held if any of the following are met:

    • is listed on an approved securities exchange in Australia
    • has at least 50 members
    • has one or more specified widely held entities that together hold more than 25% of the participation interests in the trust and no other type of single entity holds more that 60% of the participation interests.

    Registered MIS that is a wholesale trust

    A registered MIS that is a wholesale trust is widely held if it has either:

    • at least 25 members
    • one or more specified widely held entities that together hold more than 25% of the participation interests in the trust and no other type of single entity holds more that 60% of the participation interests.

    Unregistered MIS that is a wholesale trust

    An unregistered MIS that is a wholesale trust is widely held if it has at least 25 members.

    Specified widely held entities

    Specified widely held entities include a:

    • foreign collective investment trust with at least 50 members
    • life insurance company or foreign life insurance company
    • complying super fund, complying approved deposit fund or foreign super fund with at least 50 members
    • limited partnership, if at least 95% of its membership interests are directly or indirectly held by specified widely held entities and the remaining membership interests are beneficially owned by a general partner that manages the limited partnership
    • directly or indirectly wholly-owned subsidiary of a specified widely held entity.

    Participation interests

    'Participation interest' refers to the greater percentage held by the entity of the:

    • interests (by value) in the trust
    • control of rights attaching to membership interests
    • rights to distributions from the trust.

    Closely held restriction

    There are restrictions on the extent to which a trust can be 'closely held'. The closely held restrictions differ depending on whether the MIT is:

    Specified widely held entities and trusts in a chain of trusts are treated as not having an interest in the trust for the purpose of the closely held rules.

    Registered MIS that is a retail trust

    To meet the closely held restriction, a registered MIS that is a retail trust must not have:

    • 20 or fewer persons holding 75% or more of the participation interests or
    • one foreign resident individual holding 10% or more of the participation interests.

    MIS that is a wholesale trust

    To meet the closely held restriction, a registered or unregistered MIS that is a wholesale trust must not have:

    • 10 or fewer persons holding 75% or more of the participation interests or
    • one foreign resident individual holding 10% or more of the participation interests.
      Last modified: 22 Feb 2023QC 47436