Corporations Act 2001

CHAPTER 8B - CORPORATE COLLECTIVE INVESTMENT VEHICLES  

PART 8B.4 - CORPORATE FINANCE AND FINANCIAL REPORTING FOR CCIVs  

Division 1 - Shares  

Subdivision B - Redemption of shares  

SECTION 1230F   REQUIREMENTS FOR REDEMPTIONS BY ALL CCIVs  

Redemption must be in accordance with terms of issue

1230F(1)    
A CCIV must not redeem shares if the redemption is not on the terms on which the shares are on issue.

Sub-fund must be solvent

1230F(2)    
A CCIV must not redeem shares if, immediately before the redemption:

(a)    the sub-fund to which the shares are referable is insolvent; or

(b)    there are reasonable grounds for suspecting that the sub-fund to which the shares are referable is insolvent, or would become insolvent immediately after the redemption.

Note 1: For when a sub-fund of a CCIV is solvent , or insolvent , see section 1231A .

Note 2: The directors of the corporate director have a duty to prevent insolvent trading by sub-funds: see section 588G (as modified by Division 6 of Part 8B.6 ).

Consequences of contravention

1230F(3)    
If a CCIV redeems shares in contravention of subsection (1) or (2) :

(a)    the contravention does not affect the validity of the redemption or of any contract or transaction connected with it; and

(b)    the CCIV does not commit an offence.

Fault-based offence

1230F(4)    
A person commits an offence if the person is involved in a CCIV ' s contravention of subsection (1) or (2) and the involvement is dishonest.

Civil liability

1230F(5)    
A person who is involved in a CCIV ' s contravention of subsection (1) or (2) contravenes this subsection.

Note: This subsection is a civil penalty provision (see section 1317E ).