With the COVID-19 pandemic affecting all aspects of the economy, it is not surprising that some managed funds have suspended or cancelled the ability of investors to withdrawal their money. Broadly, managed funds include any fund in which the money you invest is pooled together with other investors. The fund manager or responsible entity then uses the pooled money to buy and sell assets (including shares or bonds) on your behalf.
In some situations, these managed funds may face liquidity or other operational issues due to an external event such as a global pandemic or other factors which may require freezing of withdrawals to protect the best interest of members. However, in the context of a global pandemic there may be members facing hardship and require the withdrawal of their investment to be able to survive.
To enable some frozen funds to provide hardship relief to their members or investors, ASIC has registered a relevant instrument and implemented individual hardship relief measures as well as rolling withdrawal relief. The hardship relief is available to both liquid and illiquid frozen funds. To be eligible for the relief, the responsible entity of the managed fund must have suspended or cancelled withdrawals, and ceased to allow the issue of new interests in the scheme (including distribution reinvestments and issues to existing members).
If you’re a member of one of these frozen funds, you may be able to access up to $100,000 of your money per calendar year if you meet the following conditions:
The $100,000 need not be withdrawn at the same time, members may be allowed up to 4 hardships withdrawals per calendar year. If you’re a member of a frozen fund you should contact the fund if you meet one of the hardship criteria and require money.