Document ID: chunk:federal_register_of_legislation:F2022C00868:reg:51
Version: federal_register_of_legislation:F2022C00868
Segment Type: reg
Provision Reference: reg 51
Character Range: 106163–108227

51  Suspension of redemptions

Operator of a passport fund must suspend or restrict redemptions in certain circumstances
 (1) The operator of a passport fund must suspend redemptions in the passport fund if it is directed to do so by the home regulator for the passport fund in writing and the direction has not been revoked in writing.
 (2) The operator of a passport fund must suspend redemptions in the passport fund if the passport fund is in the process of being wound up. This does not prevent an interim or final distribution on a pro rata basis during the winding up of the fund.
 (3) The operator of a passport fund must suspend redemptions in the passport fund during a period when:
 (a) the operator considers that a suspension is in the best interests of members; and
 (b) the operator considers that a suspension is fair as between members; and
 (c) either:
 (i) the operator considers that:
 (A) a proportion of the assets of the passport fund are not able to be reliably valued; and
 (B) that proportion is such that, in the reasonable opinion of the operator, there is a material risk that the redemption price will contain an error; and
 (C) the error in the redemption price is likely to affect the decision of members of the passport fund about whether or not to redeem their interests; or
 (ii) the operator reasonably expects that more than 20% of the value of the assets of the passport fund could not be realised at or above the fair value of the assets within the period for satisfying redemption requests; and
 (d) the home regulator for the passport fund has not directed the operator in writing not to suspend redemptions or to cease suspension of redemptions.

Other passport funds must not otherwise suspend or restrict redemptions
 (4) The operator of a passport fund must not suspend redemptions in circumstances other than those set out in subsections (1), (2) and (3).
Note:  Funds to which section 48 applies (exchange traded passport funds) are only required to provide redemptions in the circumstances set out in that section.