Document ID: chunk:federal_register_of_legislation:F2013C00808:body:0:p11
Version: federal_register_of_legislation:F2013C00808
Segment Type: other
Provision Reference: 
Character Range: 26985–29983

the IIF guidelines, licensing agreement or other contractual documents in relation to an IIF licensed fund to ensure that where the   Board is of the opinion that the fund or its manager:

         (a) is or may become insolvent or suffer what the Board considers to be a substantial loss of capital;

         (b) is in breach of the IIF guidelines, any requirement imposed on it under clause 22 or    any contractual or other obligation owed to a third party;

         (c) has failed to achieve activity milestones contained within the licence agreement or   other contractual document relating to the fund; or

         (d) a member of the key personnel ceases to be employed or otherwise retained by the fund in the manner stated in the application to be awarded a licence;

         the Board may, in consultation with entities contributing private capital (excluding the fund's manager and associates), place additional conditions on the operations of the fund to protect the value of the monies invested in the fund.

         42. These conditions may include, but are not limited to:

         (a) replacement of a fund manager;

         (b) divestment of specified investments;

         (c) limitations on investments, short term debt raising or other financing instruments;

         (d) reimbursement of costs associated with correcting the circumstance; or

         (e) recruitment by the fund manager of additional staff with appropriate expertise, experience or abilities.

Conditions to apply to investors

         43. The Board must make provision in the IIF guidelines, the licence agreement or other contractual document relating to an IIF licensed fund for the conditions to apply in the event a person who has invested in or provided amounts to the fund breaches the IIF guidelines.

Valuation

         44. The Board must make provisions in the IIF guidelines for policies and methodologies   to ensure a consistent, transparent and realistic valuation of IIF licensed fund assets.  Where practicable these methodologies and policies are to reflect what is, in the   opinion of the Board, generally accepted practice in Australia.

    Other Requirements

         45. Nothing in this Part 7 limits the requirements that may be imposed under clause 22.

PART 8—RETURN ON DRAWNDOWN CAPITAL

Distribution

         46. In determining the terms on which Commonwealth program capital is invested in an    IIF licensed fund, the Board must require the fund to distribute monies upon the receipt of earnings or the realisation of investments or other financings in the following  manner:

         (a) the Commonwealth has no priority as to distributions;

         (b) money subscribed for units or shares in, or provided to, the fund is returned in the proportions invested or provided; and

         (c) the balance, if any, remaining is applied as follows:

             (i) there is paid to each investor including the Commonwealth an amount equal    to the interest on the