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Charting Possibilities for AFSL Authorised Representatives: Unpacking Australia's Wholesale Investor and Client Test Parliamentary Inquiry

Discussion for AFSL holders on the Parliamentary Inquiry

Snapshot: On 20th March 2024, the Parliamentary Joint Committee on Corporations and Financial Services initiated an inquiry into the regulations surrounding the wholesale investor test for securities offerings (Section 708 of Chapter 6D) and the wholesale client test for financial products and services (Sections 761G & 761GA of Chapter 7). These tests, collectively referred to as the wholesale investor/ client tests, are under scrutiny for potential revisions.

How could this effect you?

The potential changes to the wholesale investor / client tests could have significant ramifications:

  • Higher Net Asset Threshold: Proposals suggest increasing the net asset requirement to $5 million, potentially reducing the number of investors meeting the test.

  • Impact on Fund Running Costs: Investors failing to meet the wholesale client test would only be able to invest in registered managed investment schemes, which means higher operational costs compared to wholesale schemes.

What happens next?

The Committee was accepting written submissions until 15th May 2024. The intention is then to present the findings to Parliament by the end of 2024.

Avenir Capital, as a holder of a broad-ranging wholesale AFSL, together with our partner, 360Certainty, was invited to submit a response to this Parliamentary Inquiry. We will be updating our AFSL Authorised Representatives as the inquiry progresses. Our response can be read here....

20240515 360Certainty & Avenir Capital submission re wholesale investor tests
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