Portfolio investment entity (PIE) investor proxies (PIPs) are intermediaries through which investors can invest in a PIE. PIPs are not PIEs themselves but they take on responsibilities as if they were a multi-rate PIE (MRP).
PIPs are sometimes referred to as custodians, nominees or wrap accounts.
How to become a PIP
An entity needs to meet three criteria to become a PIP:
- The entity must hold investor interest in an MRP for each individual investor.
- The entity must give notice to the MRP that it is holding investor interest as a proxy.
- The entity cannot become a PIP for an investor's investment in a listed PIE.
An investment in a listed PIE can be a part of the PIP's other investment activities.
PIPs file PIE periodic returns quarterly or monthly.
PIPs also file income tax returns for their non-MRP investment income.
What a PIP must do
A PIP must:
- attribute income or loss, tax credits and pay PIE tax on investor income for the period
- provide us with PIE returns relating to attributions, credits and payments
- provide information to the MRP if its investors may cause the MRP to breach any of its eligibility criteria
- adjust investor transactions to reflect the prescribed investor rate on the amount attributed.