The Federal Court's decision in Australian Securities and Investments Commission v Avestra Asset Management Ltd provided a rare opportunity for judicial guidance on the interpretation and application of the Pt 5C.7 framework governing related party dealings out of the scheme property of managed investment schemes (MISs). The judgment considered and clarified four issues with Pt 5C.7 that arose on the facts in that case: (i) Is a cross-investment into a related party's MIS caught by s 208(1)? (ii) Can the responsible entity (RE)'s acquisition of bare legal title in shares acquired by the scheme amount to a "financial benefit" to the RE? (iii) How does Pt 5C.7 apply to financial benefits given indirectly, through an interposed scheme that is unregistered? and (iv) Who are the related parties of entities (other than the RE itself) whose giving of financial benefits is caught by s 208(1)(a)?
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