Notice to unitholders
Proposal to change responsible entity
|Balloon Inflation Linked Bond Trust||ARSN 130 200 172|
|Crown Domestic Sovereign Bond Trust||ARSN 154 695 897|
|Challenger Index Plus Fund||ARSN 616 423 520|
|Challenger Annuity Fund||ARSN 623 652 595|
|Challenger Guaranteed Income Fund||ARSN 139 607 122|
|Challenger Guaranteed Pension Fund||ARSN 154 366 588|
Challenger Retirement and Investment Services Limited (CRISL) currently acts in dual entity roles as both Responsible Entity (RE) of the Funds and as Registrable Superannuation Entity (RSE) licensee and trustee of a superannuation fund. The Financial Sector Reform (Hayne Royal Commission Response Act 2020, which implements recommendations from Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, imposes an additional licence condition on the RSE licences of superannuation trustees that will require CRISL to cease acting in dual entity roles and solely act as RSE licensee of superannuation funds by 30 June 2021.
It is proposed that:
(a) CRISL retire as responsible entity of the Funds; and
(b) Fidante Partners Services Limited (FPSL) be appointed as responsible entity of the Funds.
FPSL is an ASIC regulated entity which is wholly owned by Challenger Limited.
FPSL currently operates a range of managed investment schemes for retail and wholesale investors, managing in excess of $3.4 billion of funds under management.
As both FPSL and CRISL are part of the Challenger Limited group, the change in responsible entity will not impact the way these investments are managed nor the quality of the service investors receive from us. FPSL’s processes and governance policies are consistent with those of CRISL. Importantly, unitholder rights are not changed as FPSL will be subject to the same responsible entity obligations as CRISL.
Further information about FPSL is set out in the letter and notice to unitholders dated 23 April 2021.
Procedure for the retirement and replacement of responsible entity
(a) The Australian Securities and Investments Commission (ASIC) has provided relief which allows CRISL to retire as responsible entity of the Funds and to appoint FPSL in its place without first holding a meeting of unitholders in the Funds, provided CRISL notifies unitholders of the proposal and gives them an opportunity to request a vote on the choice of proposed responsible entity.
(b) However, CRISL must conduct a vote of the unitholders of a Fund (as described in paragraph (c) below) where:
unitholders who together hold at least 5% of the total value of units in that Fund;
- 100 unitholders,
who would be entitled to vote at a unitholder meeting of that Fund ask for a vote on the choice of the proposed responsible entity by giving written notice received by CRISL within 21 days from the date this notice is sent.
(c) If sufficient unitholders of a Fund ask for a vote (as described in paragraph (b) above) then CRISL will either arrange a postal vote or convene a meeting for the relevant Fund to vote on a resolution for the choice of the proposed responsible entity.
(d) If insufficient unitholders of a Fund ask for a vote (as described in paragraph (b) above) then the change of responsible entity to FPSL will be implemented shortly after the 21 day notice period expires (in any event, within 2 business days) as follows:
CRISL and FPSL will sign a Deed of Retirement and Appointment in respect of each Fund;
CRISL will lodge a notice with ASIC requesting that it be replaced as responsible entity of each Fund by FPSL, along with a certificate setting out why CRISL reasonably considers that the appointment of FPSL as the replacement responsible entity would be in the best interest of unitholders of each Fund; and
ASIC will then alter its records with respect to each Fund to record FPSL as the responsible entity.
(e) The implementation of the change of responsible entity to FPSL as described in paragraph (d) above will not cost unitholders anything.
Timing of retirement and replacement of responsible entity
(f) Challenger intends to complete the process outlined above by no later than 30 June 2021.
(g) The notice to unitholders is being sent on 23 April 2021. Therefore, the 21-day notice period is deemed to end on 14 May 2021. A request for a vote needs to be received by us no later than 5.00 pm (Sydney time) on 17 May 2021.
(h) Should unitholders of a Fund request a vote, the costs to undertake a postal vote or convene a meeting will be borne ultimately by CRISL as the current responsible entity of the relevant Fund. CRISL will contact relevant investors again in the event that a vote is required.
What investors need to do?
If you are comfortable with the proposal to change the responsible entity of the Funds and consent to this change, you do not need to do anything.
If you wish to request a vote, you will need to complete and sign the unitholder notice form enclosed with the letter dated 23 April 2021 and return it by 5.00pm (Sydney time) on 17 May 2021 to the address provided on the form.
Please continue to check this webpage for any updates regarding this proposal. If you have any questions, please contact our Institutional Client Services team on 02 9994 7259.
The information on this page is current as at 23 April 2021 and is issued by Challenger Retirement and Investment Services Limited ABN 80 115 534 453, AFSL 295642 (CRISL), the issuer of the Funds listed above. It is intended for unitholders in those Funds only. The information has been prepared without taking into account any person’s objectives, financial situation or needs. Because of that, each person should, before acting on any such information, consider its appropriateness, having regard to their objectives, financial situation and needs. Each person should obtain and consider the Fund Product Disclosure Statement (PDS) or other offer document before making a decision about whether to acquire or continue to hold an interest in the relevant Fund. A copy of the offer documents can be found by calling our Institutional Client Services team on 02 9994 7259 or at www.challenger.com.au.