Commonwealth Numbered Regulations - Explanatory Statements
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POOLED DEVELOPMENT FUNDS REGULATIONS 2018 (F2018L01291)
EXPLANATORY STATEMENT
Issued by the authority of the Minister for Industry, Science and Technology
Pooled Development Funds Act 1992
Pooled Development Funds Regulations 2018
Purpose and Operation
The purpose of the Pooled Development Funds Regulations 2018 is to remake and update the Pooled Development Funds Regulations, which are due to sunset on 1 October 2018.
The Regulations remake the Pooled Development Funds Regulations without substantive change. They improve the former Regulations by repealing redundant provisions, updating language and aligning with current drafting practices. The key provisions:
* remake the definition of excluded activity, which prohibits pooled development funds (PDFs) from investing in companies whose primary activity is retail or real estate, without approval from Innovation and Science Australia; and
* remake the definition of unregulated investment, which allows PDFs to make interest bearing investments. Ordinary share investments in companies (which are not pre-owned) are allowed investments.
The Regulations are a legislative instrument for the purposes of the Legislation Act 2003.
Further details of the Regulations are set out in Attachment A.
Authority
Section 76 of the Pooled Development Funds Act 1992 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
Consultation
Consultation on the proposal to remake the sunsetting Regulations was conducted with all remaining PDFs and the industry peak body, the Australian Private Equity and Venture Capital Association (AVCAL). Ten responses were received from PDFs. A substantial majority of PDFs said either that the changes in relation to superseded or outdated references were appropriate, or that they had no objections. AVCAL did not comment on the changes.
Regulatory impact
The Office of Best Practice Regulation (OBPR) has advised that a Regulation Impact Statement is not required for this legislative instrument (OBPR ID 22703).
Commencement
The Regulations commence on the day after they are registered on the Federal Register of Legislation.
Statement of Compatibility with Human Rights
A Statement of Compatibility with Human Rights is at Attachment B. The Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
ATTACHMENT A
Details of the Pooled Development Funds Regulations 2018
Section 1 - Name
This section provides that the name of the Regulations is the Pooled Development Funds Regulations 2018.
Section 2 - Commencement
This section provides that the Regulations commence on the day after they are registered on the Federal Register of Legislation.
Section 3 - Authority
This section provides that the Regulations are made under the Pooled Development Funds Act 1992.
Section 4 - Schedules
This section provides that each instrument that is specified in a Schedule to the Regulations is amended or repealed as set out in the applicable items in the Schedule concerned, and any other items in a Schedule to these Regulations has effect according to its terms.
Section 5 - Definitions
This section defines the terms used in the Regulations. The definition of authorised money market dealer has been updated to reflect current law. Section 11 of the Financial Sector (Collection of Data) Act 2001 requires the Australian Prudential Regulation Authority (APRA) to keep a list of registered entities, divided into categories as APRA determines.
Section 6 - Excluded activities
This section prescribes the activities for the purposes of the definition of excluded activity in subsection 4(1) of the Act. This section prescribes the activities in which a Pooled Development Fund may not invest funds.
Section 7 - Unregulated investments
This section prescribes the kinds of investments for the purposes of the definition of unregulated investment in subsection 4(1) of the Act. This section prescribes investments in which money may be put if not immediately invested in eligible companies or used for the running costs of the fund.
Schedule 1 - Repeals
This Schedule provides for the repeal of the Pooled Development Funds Regulations as the instrument is due to sunset on 1 October 2018 and is being remade by the Regulations.
ATTACHMENT B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Pooled Development Funds Regulations 2018
These regulations are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
The Pooled Development Funds Regulations 2018 remake and improve the Pooled Development Funds Regulations, which are scheduled to sunset on 1 October 2018, by amending or removing provisions and updating terminology and references.
The key provisions:
* prescribe the activities for the purposes of the definition of excluded activities in the Pooled Development Funds Act 1992 (the Act), which prohibit pooled development funds (PDFs) from investing in companies whose primary activity is retail or real estate; and
* prescribe the kinds of investments for the purposes of the definition of unregulated investments in the Act, which allow PDFs to make interest bearing investments as well as ordinary share investments in companies.
Human rights implications
This Legislative Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
The Honourable Karen Andrews MP
Minister for Industry, Science and Technology