Most existing property syndicates or schemes that invest their assets in real property and are closed off to new investors will be considered managed investment schemes (MISs) under the Financial Markets Conduct Act 2013 (the FMCA), and will need to comply with the FMCA by 1 December 2016.  An MIS must have:

  • a licensed manager;
  • a supervisor with a license that covers the scheme;
  • a licensed independent trustee;
  • a Product Disclosure Statement;
  • a Statement of Investment Policy and Objectives; and
  • compliant governing documents.

The Financial Markets Authority is currently seeking feedback on two exemption proposals for property schemes.  They are:

  1. an exemption from the FMCA requirement that scheme property be held by a licensed supervisor or by an independent custodian to allow the manager or an associated person to hold real property assets, providing the schemes have effective alternative arrangements to safeguard that property; and
  2. an exemption for schemes that are being wound up to continue their existing governance obligations for one year.

Note that these exemptions will not apply to new property schemes.  New property schemes will be considered MISs and will need to comply with the MIS requirements under the FMCA.