(1) For the purposes of subsections 1234K(1) and (2) of the Act, subsections 1234J(1) to (3) of the Act do not apply in relation to the class of assets of a sub-fund of a CCIV that consists of assets that:
(a) are of any of the following kinds (the prescribed assets ):
(i) Australian or foreign currency;
(ii) rights to Australian or foreign currency that is held in a deposit-taking facility made available by an ADI (within the meaning of the Banking Act 1959 );
(iii) rights to Australian or foreign currency that is held in a deposit-taking facility made available by a body corporate that is authorised to carry on a banking business (within the meaning of that Act) in a foreign country;
(v) derivatives; and
(b) are held in accordance with the requirements mentioned in subregulation (2).
(2) For the purposes of subregulation (1), the following requirements apply in relation to the holding, by a person, of assets of a sub-fund of a CCIV that are prescribed assets:
(a) a requirement that the person holds the prescribed assets separately from any money or property of the person;
(b) a requirement that there are adequate safeguards in place for the protection of the prescribed assets, including if the assets of another sub-fund of the CCIV or the assets of another entity are subject to external administration;
(c) a requirement that the person do all things necessary to ensure that not holding the prescribed assets in accordance with subsections 1234J(1) to (3) of the Act does not restrict the CCIV's capacity to exercise any rights in respect of the prescribed assets;
(d) a requirement that the person do all things necessary to ensure that a reconciliation of the prescribed assets occurs:
(i) each business day; or
(ii) if it is ordinary and reasonable, in commercial practice, to reconcile assets of the same class less frequently--as frequently as reconciliation of assets of that class would occur in accordance with that practice ;
(e) if there is a discrepancy in the reconciliation of the prescribed assets--a requirement that the person do all things necessary to rectify the discrepancy within the period of 2 business days starting after the day the person identifies, or becomes aware of, the discrepancy;
(f) a requirement that the person:
(i) keep adequate records of the prescribed assets; and
(ii) provide reasonable assistance to the corporate director of the CCIV.
Note: For the purposes of paragraph (e), one of the ways a discrepancy may be rectified is through the provision of additional property by the CCIV at the request of the person holding the property.