9Definitions of financial benefit and of managed investment scheme

1. In this Act,—

   financial benefit means capital, earnings, or other financial returns

   managed investment scheme means a scheme to which each of the following applies:

   1. the purpose or effect of the scheme is to enable persons taking part in the scheme to contribute money, or to have money contributed on their behalf, to the scheme as consideration to acquire interests in the scheme; and
   2. those interests are rights to participate in, or receive, financial benefits produced principally by the efforts of another person under the scheme (whether those rights are actual, prospective, or contingent, and whether they are enforceable or not); and
   3. the holders of those interests do not have day-to-day control over the operation of the scheme (whether or not they have the right to be consulted or to give directions).

2. However, a managed investment scheme does not include—

   Scheme only involves management of separate and direct interests in underlying property

3. a scheme under which each participant takes part in the scheme only by holding 1 or more interests in property if, in respect of each interest,—
   1. it is an interest in separately identifiable underlying property; and
   2. either the participant holds both the legal and beneficial interest in the property or the legal interest in the property is held on a bare trust for the participant; and
   3. the value of the interest is not substantially dependent on contributions being made by other participants or the use of other participants' contributions:

Discretionary investment management services

4. a discretionary investment management service supplied by a DIMS licensee:

Insurance contracts

5. a scheme that would be a managed investment scheme only because it involves pure risk contracts of insurance:
6. a scheme that would be a managed investment scheme only because it involves life insurance policies (within the meaning of section 2(1) of the Securities Act 1978) that were issued before this section comes into force.

7. In subsection (2), pure risk contract of insurance means a contract of insurance that does not, and never will, have a value on its cancellation or surrender that is greater than the sum of premiums paid to the insurer.

8. A managed investment scheme as defined in subsection (1) also includes a scheme declared to be a managed investment scheme under subpart 3 of Part 9.