Widely held requirement

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

• a registered MIS that is a retail trust
• a registered MIS that is a wholesale trust
• an unregistered MIS that is a wholesale trust.

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:

• a registered MIS that is a retail trust
• a MIS that is a wholesale trust

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.