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Glossary and Terminology

AFSL Australian Financial Services Licence

ASIC Australian Securities & Investments Commission

Authorised Representative A person or entity that has been authorised by the holder of an AFSL to provide Financial Services.

Constitution A document governing the operation of the Managed Investment Scheme

Custodian An entity of some substance that holds the assets of the Managed Investment Scheme.

Dealing in a financial product Applying for, acquiring, issuing, varying or disposing of a Financial Product.

Financial Product Generally, a facility through which a person makes a financial investment.

Financial Product Advice A statement intended to influence a person to make a decision in relation to a financial product or which could reasonably be regarded as being intended to have such an influence.

Financial Service The provision of a service in connection with a Financial Product.

Fund A ‘common term’ for a Managed Investment Scheme.

Information Memorandum (or IM) A document which, although not required by the Corporations Act 2001, discloses information to Wholesale Clients.

Investment Manager A person or entity appointed to manage the investments made by the Managed Investment Scheme.

Key Person A Responsible Manager that ASIC has determined is key to the organisational competence of the AFS licensee.

Managed Investment Scheme A scheme where people contribute money in return for rights (interests) in the scheme, which is pooled for investment for the benefit of the people (members) who hold interests in the scheme where the members do not have day-to-day control over the operation of the scheme.

PDS A document which is required by the Corporations Act 2001 to disclose information to a Retail Client.

Professional Investor An investor who holds an AFSL or who controls at least A$10 million in assets.

Property Syndicate A Managed Investment Scheme that is invested in real estate.

Real Estate Investment Trust (or REIT) A Managed Investment Scheme that is invested in real estate and the interests in which are listed on an exchange for marketable securities such as the Australian Stock Exchange.

Registered Fund A Managed Investment Scheme which is registered with ASIC.

Responsible Manager An individual within a business which ASIC checks to ensure that the licensee is “competent” to provide the financial services authorised by their Australian Financial Services Licence.

Retail Client/Investor A client who is not a Wholesale Client/Investor.

Retail Fund A Managed Investment Scheme in which Retail Clients are members. A Retail Fund may also have Wholesale Clients as members.

Sophisticated Investor A client who the AFS Licensee is satisfied has experience in using financial services and investing in financial products which allows them to assess the merits, value and risks of the financial product as well as their own information needs and the adequacy of the information provided in relation to the financial product.

Syndicate A ‘common term’ for a Managed Investment Scheme.

Trustee A person or entity that holds property for the benefit of the beneficiaries of a trust.

Unregistered Fund A Managed Investment Scheme which is not registered with ASIC.

Wholesale Client/Investor A client who is a Professional Investor or invests at least A$500,000 or has an Accountants Certificate stating that they have net assets of at least A$2.5 million or gross income in each of the last two financial years of A$250,000.

Wholesale Fund A Managed Investment Scheme in which only Wholesale Clients are members. A Wholesale Fund may not have Retail Clients as members unless they qualify for an exemption.

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