Document ID: chunk:federal_register_of_legislation:F2022C00868:reg:55:p2
Version: federal_register_of_legislation:F2022C00868
Segment Type: reg
Provision Reference: reg 55 (pt 2/4)
Character Range: 114840–117463

or commodities that are regularly traded; and
 (b) it has a clearly defined objective or the market or sector which it aims to represent is clearly defined; and
 (c) it represents a reasonable benchmark for a market or market sector for which it is widely used; and
 (d) it is made up entirely of constituents that, with the exception of those related to commodity prices are investments that a passport fund would be permitted to hold under these rules; and
 (e) it is defined and calculated by a person who is not a related party of the operator of the passport fund unless, where the 2 parties are related parties, there are adequate arrangements in place for managing the specific conflicts of interest that might arise in this situation; and
 (f) it has no:
 (i)  constituent; or
 (ii)  for commodity indexes—group of constituents relating to substantially the same commodity;
  exceeding 25% of the index; and
 (g) information about it (including information about the composition of the index and the methodology used to construct and rebalance the index) is readily accessible to the public.
embeds a derivative and embedded derivative: see section 26.
fair value, in relation to an asset or an interest, is the market price of the asset or an interest, or the value that the operator would reasonably expect to receive if it were sold on the current market if it is:
 (a) an asset that is not traded on a financial market; or
 (b) an asset of a passport fund in relation to which the valuation entity under section 53 is satisfied that the market price is either unavailable or does not reasonably represent the value of the asset.
financial asset CIS means a CIS that predominantly holds assets that a passport fund is permitted to hold under Division 6.2 and may not be reasonably regarded as predominantly a vehicle for investment in:
 (a) physical assets, other than depository receipts over gold; or
 (b) derivatives where the value is determined by or varied with respect to the price of physical assets, other than gold.
financial asset regulated CIS means a financial asset CIS:
 (a) whose members are generally able to redeem their interests from the scheme or arrangement or sell their interests on a financial market for a price that is not materially different from the net asset value per interest; and
 (b) that is either:
 (i) a regulated CIS; or
 (ii) a CIS that in the opinion of the home regulator for the passport fund holding an interest in the CIS, notified in writing to the operator of the fund by the home regulator, is subject to regulation that is broadly similar in effectiveness to that