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Corporations Bill 2001

Part 5C.6 Members’ rights to withdraw from a scheme

   

601KA   Members’ rights to withdraw

Withdrawal from schemes that are liquid

             (1)  The constitution of a registered scheme may make provision for members to withdraw from the scheme, wholly or partly, at any time while the scheme is liquid (see subsection 601GA(4)).

Withdrawal from schemes that are not liquid

             (2)  The constitution of a registered scheme may make provision for members to withdraw from the scheme, wholly or partly, in accordance with this Part while the scheme is not liquid (see subsection 601GA(4)).

Restrictions on withdrawal from schemes

             (3)  The responsible entity must not allow a member to withdraw from the scheme:

                     (a)  if the scheme is liquid ¾ otherwise than in accordance with the scheme’s constitution; or

                     (b)  if the scheme is not liquid ¾ otherwise than in accordance with the scheme’s constitution and sections 601KB to 601KE.

Liquid schemes

             (4)  A registered scheme is liquid if liquid assets account for at least 80% of the value of scheme property.

Liquid assets

             (5)  The following are liquid assets unless it is proved that the responsible entity cannot reasonably expect to realise them within the period specified in the constitution for satisfying withdrawal requests while the scheme is liquid:

                     (a)  money in an account or on deposit with a bank;

                     (b)  bank accepted bills;

                     (c)  marketable securities (as defined in section 9);

                     (d)  property of a prescribed kind.

             (6)  Any other property is a liquid asset if the responsible entity reasonably expects that the property can be realised for its market value within the period specified in the constitution for satisfying withdrawal requests while the scheme is liquid.

601KB   Non-liquid schemes—offers

             (1)  The responsible entity of a registered scheme that is not liquid may offer members an opportunity to withdraw, wholly or partly, from the scheme to the extent that particular assets are available and able to be converted to money in time to satisfy withdrawal requests that members may make in response to the offer.

             (2)  The withdrawal offer must be in writing and be made:

                     (a)  if the constitution specifies procedures for making the offer—in accordance with those procedures; or

                     (b)  otherwise—by giving a copy of the offer to all members of the scheme or to all members of a particular class.

             (3)  The withdrawal offer must specify:

                     (a)  the period during which the offer will remain open (this period must last for at least 21 days after the offer is made); and

                     (b)  the assets that will be used to satisfy withdrawal requests; and

                     (c)  the amount of money that is expected to be available when those assets are converted to money; and

                     (d)  the method for dealing with withdrawal requests if the money available is insufficient to satisfy all requests.

The method specified under paragraph (d) must comply with section 601KD.

             (4)  For joint members, a copy of the withdrawal offer need only be given to the joint member named first in the register of members.

             (5)  As soon as practicable after making the withdrawal offer, the responsible entity must lodge a copy of the offer with ASIC.

601KC   Non-liquid schemes—only one withdrawal offer to be open at any time

                   Only one withdrawal offer may be open at any time in relation to a particular interest in a registered scheme that is not liquid.

601KD   Non-liquid schemes ¾ how payments are to be made

                   The responsible entity of a registered scheme that is not liquid must ensure that withdrawal requests made in response to a withdrawal offer are satisfied within 21 days after the offer closes. No request made under the withdrawal offer may be satisfied while the offer is still open. If an insufficient amount of money is available from the assets specified in the offer to satisfy all requests, the requests are to be satisfied proportionately in accordance with the formula:

601KE   Non-liquid schemes ¾ responsible entity may cancel withdrawal offer

             (1)  The responsible entity of a registered scheme that is not liquid:

                     (a)  may cancel a withdrawal offer before it closes if the offer contains a material error; or

                     (b)  must cancel a withdrawal offer before it closes if it is in the best interests of members to do so.

             (2)  The cancellation must be made:

                     (a)  if the constitution specifies procedures for cancelling the withdrawal offer ¾ in accordance with those procedures; or

                     (b)  otherwise ¾ by notice in writing to the members to whom the withdrawal offer was made.

             (3)  The responsible entity must lodge written notice of the cancellation with ASIC.