Financial Markets Conduct (Forestry Schemes) Exemption Notice 2021

Summary: The Financial Markets Conduct (Forestry Schemes) Exemption Notice 2021 provides relief in relation to forestry schemes from certain requirements under the Financial Markets Conduct Act 2013 (the FMC Act) and the Financial Markets Conduct Regulations 2014.  The main effects of the notice are:

• exemptions from governing document and licensing requirements will apply for managers of existing forestry schemes that are closed to new investment (provided the manager has less than $40 million of assets under management in respect of registered forestry schemes)
• existing forestry schemes that are closed to new investment are not required to have real property assets or carbon credits held by the scheme’s supervisor, or other independent person, provided that those assets are subject to a registered security interest in favour of the supervisor
• custodians of forestry schemes are not required to reconcile scheme cash records daily, provided those records are reconciled with a frequency suited to the level of transactions for the scheme
• where a custodian holds scheme property, the custodian does not need to have an annual assurance engagement with a qualified auditor of their processes, procedures, and controls, provided they obtain an assurance engagement when the supervisor considers that this is desirable to provide reasonable assurance in relation to custody of the scheme property
• managers of forestry schemes are not required to make a quarterly report on limit breaks for periods when minimal work is being done in the forest if no limit break occurs in that quarter, and
• corporate general partners of some schemes that are limited partnerships are exempt from disclosure, governance, and financial reporting requirements in relation to shares in the general partner held by or offered to scheme participants.

This notice replaces, on substantially the same terms, the Financial Markets Conduct (Forestry Schemes) Exemption Notice 2016, which is revoked on 17 November 2021.