Airports Act 1996: Ownership Rules with Regard to Investment Funds
The Airports Act 1996 (the Act) establishes the regulatory arrangements which apply to the airports formerly owned and operated on behalf of the Commonwealth by the Federal Airports Corporation, and Sydney West Airport.
In respect of airport ownership and control, the Airports (Ownership) Regulations 2024 establish that a foreign investment fund can be classified as ‘substantially Australian’ in relation to the foreign ownership provisions or a ‘distanced investment fund’ in relation to the airline-ownership provisions of the Airports Act 1996.
It is essential that fund managers refer to and meet the requirements of the Act, the Schedule to the Act, and the Regulations to ensure legislative obligations are fulfilled.
‘Substantially Australian’ declaration
Certain investment fund managers or trustees may apply, in writing, to the Minister, for a declaration that can disregard certain interests, for the purposes of determining whether an unacceptable foreign ownership situation will arise.
Under Regulation 18(2) of the Airports (Ownership) Regulations 2024, an investment fund is eligible to be declared a substantially Australian investment fund if the investment fund is a fund in which a beneficial interest in less than 40% of the capital, and 40% of the income, is held by persons who are foreign persons.
Following assessment of the written application, if the Minister is satisfied that the investment fund is eligible to be declared a substantially Australian investment fund, the Minister will issue a declaration to this extent. A copy of the declaration will be issued to the applicant; a notice of the declaration will be published on the department’s website.
If declared, the Minister may, by written notice given to the interest-holder, require the interest-holder to give the Minister specified information about the eligibility of the investment fund to continue to be declared a substantially Australian investment fund.
For additional information on the application process, please contact Airport.Ownership@infrastructure.gov.au.
‘Distanced investment fund declaration’
Certain investment fund managers or trustees may apply, in writing, to the Minister, for a declaration that can disregard certain interests, for the purposes of determining whether an unacceptable airline ownership situation will arise.
Under Regulation 20(4) of the Airports (Ownership) Regulations 2024, an investment fund is eligible to be declared a distanced investment fund if:
(a) neither the trustee nor the manager of the investment fund is an associate (within the meaning of paragraph 5(1)(j) of the Schedule to the Act) of the airline; and
(b) the investment fund is a fund in which a beneficial interest in less than 40% of the capital, and 40% of the income, is held by persons who are foreign persons.
Following assessment of the written application, if the Minister is satisfied that the investment fund is eligible to be declared a distanced investment fund, the Minister will issue a declaration to this extent. A copy of the declaration will be issued to the interest-holder; a notice of the declaration will be published on the department’s website.
If declared, the Minister may, by written notice given to the interest-holder, require the interest-holder to give the Minister specified information about the eligibility of the investment fund to continue to be declared a distanced investment fund.
For additional information on the application process, please contact Airport.Ownership@infrastructure.gov.au.
Revocation
The Minister may revoke either declaration if there are reasonable grounds for believing that the circumstances have changed or the fund does not comply with the other provisions.
Within 7 days of a declaration revocation, the Minister must give a notice of reasons, and right of appeal against the decision to revoke the declaration.