Proposed Changes to the SIV complying investment framework

Global Enterprises Group representatives today attended the second round of consultations with Austrade on the upcoming proposed changes to the Significant Investor Visa (SIV) and Premium Investor Visa (PIV).

There is currently a proposal to change the SIV complying investment framework to incorporate 2 mandatory components (which must equal 50% of the $5m investment) that are high-risk “Venture Capital” and “Micro Capitalised Companies” fund. There will be a 3rd component to the SIV complying investment framework called the “Balancing Investment” component.

This ‘balancing investment’ component is proposed to be made up of the following:

Australian Exchange listed companies, A-REITS, infrastructure trusts, preference shares, convertible bonds, or corporate issued floating rate notes
Australian issued corporate bonds (financial and non-financial companies)
Australian friendly society insurance bonds
Deferred annuities issued by Australian registered life companies buyt cannot commence paybacks during the qualifying period
Commercial and industrial property in Australia

Note that under the current proposal, Fund Managers are to have and maintain a minimum $100m in firm-wide FUM to offer a complying fund to applicants.

The Austrade representative said that apart from direct investment into Pty Ltd companies and bonds, everything else around the SIV is ‘the same’. In Global Enterprises Group’s opinion, this statement effectively kills 66% of the current framework, so saying that ‘everything else is the same’ is absurd.

The Minister for Trade has been talking about directing investor funds where ‘there tends to be thin capital flows’. We believe that ideologically this is a great idea, as theoretically it will support and encourage investment into innovation and technology. However, in practice we believe that the proposed changes go against the core terms of reference directing Austrade’s thinking, which is “Simplicity and workability”. There is nothing simple about the proposed changes to the SIV complying investment framework, and lack of workability because of the changes will, in our opinion, stifle demand

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