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).
Sourced from the Federal Register of Legislation at 17 May 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au. Verify the current text against the official source before relying on it.
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