Document ID: chunk:federal_register_of_legislation:C2025C00185:section:1230f
Version: federal_register_of_legislation:C2025C00185
Segment Type: section
Provision Reference: s 1230F
Character Range: 5103328–5104765

1230F  Requirements for redemptions by all CCIVs

Redemption must be in accordance with terms of issue
 (1) A CCIV must not redeem shares if the redemption is not on the terms on which the shares are on issue.

Sub‑fund must be solvent
 (2) A CCIV must not redeem shares if, immediately before the redemption:
 (a) the sub‑fund to which the shares are referable is insolvent; or
 (b) there are reasonable grounds for suspecting that the sub‑fund to which the shares are referable is insolvent, or would become insolvent immediately after the redemption.
Note 1: For when a sub‑fund of a CCIV is solvent, or insolvent, see section 1231A.
Note 2: The directors of the corporate director have a duty to prevent insolvent trading by sub‑funds: see section 588G (as modified by Division 6 of Part 8B.6).

Consequences of contravention
 (3) If a CCIV redeems shares in contravention of subsection (1) or (2):
 (a) the contravention does not affect the validity of the redemption or of any contract or transaction connected with it; and
 (b) the CCIV does not commit an offence.

Fault‑based offence
 (4) A person commits an offence if the person is involved in a CCIV's contravention of subsection (1) or (2) and the involvement is dishonest.

Civil liability
 (5) A person who is involved in a CCIV's contravention of subsection (1) or (2) contravenes this subsection.
Note: This subsection is a civil penalty provision (see section 1317E).