Switching complying SIV investments

Investment Switch

Investments purchased for the Significant Investor Visa (SIV) must comply with the programs regulations.  Under the initial program, these investments included corporate and government bonds, and managed funds that invest in Australian cash, fixed income, shares and property. There are also strict limits within the investment such as the use of derivatives.

As with any investment portfolio, it is important that the funds are  reviewed on a regular basis in the context of the clients personal risk profile, market conditions, and the quality of the underlying managers.

With evolution of the program, more complying investment options have become available, and as applicants gain a greater understanding of the financial and investment landscape in Australia, many have been looking to switch their investment choices.

What amount can you switch?

When investing in a new complying investment, you must re-invest the amount redeemed. That is, if the capital value has gone up, you cant take the profile out. Conversely, if it has gondola down, you on’t have to top up. Note the amount must be re-invested within 30 days.

What is a 1413 Form?

The 1413 Form is a declaration made to the Department of Immigration and Border Protection (DIBP) by the fund manager.It is generally signed by the Responsible Entity confirming the investment  meets the requirements of the 188 SIV, and is the final part of the process for grant of the temporary visa.

Do you need a new form when switching investments?

Whilst you are not actually required to provide the DIBP with a   1413 Form when  switching complying investments, we believe it is prudent to complete and retain these documents.

By having good records demonstrating investments have complied with the programs requirements throughout the minimum four year temporary visa term, applicants will be in the best possible position to ensure their obligations have been met when applying to the DIBP for permanent residency .

Why obtain a new 1413 form when it is not actually required?

If there is any doubt in relation to the investments when it comes to applying for permanent residency, ensuring the applicant has complete record provides the following benefits:

  • For the fund manager – they are confirming their understanding of the complying fund rules and awareness of their ongoing obligations,
  •  For the wealth advisor – it provide a clear process and compliance framework to ensure that investments are complying and continue to meet the clients needs,
  • For the migration agent – it provides not just the required documentation for the initial application but also peace of mind that any new investments will continue to meet the complying investment criteria,
  • For the client –  it provides  a degree of certainty that the investment being implemented will meet the definitions required to ensure residency is granted at the end of the temporary visa period.
Conclusion

Whilst a new 1413 form is not actually required when investments are switched, we believe it is good practice to retain complete records and ensure all the paperwork is available to provide evidence of ongoing compliance throughout the temporary visa period. This will ensure the applicant is in the best possible position to secure permanent residency at the end of the 4 year period (which can be extended up twice by 2 years).

Note under the new investment framework from 1 July, 2015 the form is called a 1413d form and was released in late November.

If you have any queries about switching investments under the old or new investment rules feel free to contact us.