Responsible entity
Encyclopedia
A responsible entity is a peculiarly Australia
n invention designed to replace the manager/trustee
in managed investment schemes. It was created by the Managed Investments Act 1998, which made significant amendments to the prescribed interest provisions contained in the Australian Corporations Act.
The new arrangements replaced the relatively well known formula used in most common law
jurisdictions of a two-tiered trustee/management company regime with a single responsible entity. The responsible entity holds scheme property on trust for scheme members. The responsible entity has power to appoint an agent to do anything that it is authorised to do in connection with a scheme. This may include the appointment of a custodian to hold scheme property on behalf of the responsible entity.
Since November 1999 the Australian takeover
scheme regulations were extended to listed schemes and the takeovers provisions and compulsory acquisitions provisions apply.
A Responsible Entity has the dual role of trustee and manager of an investment scheme, and must be appointed if an investment scheme needs to be registered.
The Responsible Entity must be an Australian public company, with certain levels of net tangible assets, depending on the value of the scheme’s assets. The Responsible Entity must hold an Australian Financial Services Licence
.
When acting on behalf of an investment scheme, the Responsible entity must:
* Act honestly
* Exercise a reasonable degree of care and diligence
* Act in the best interest of members of the investment scheme
* Treat all investment scheme members equally
A Responsible Entity can either be owned by the same group as a fund manager, an "internal" responsible entity, or be an "external" responsible entity to the fund manager.
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
n invention designed to replace the manager/trustee
Trustee
Trustee is a legal term which, in its broadest sense, can refer to any person who holds property, authority, or a position of trust or responsibility for the benefit of another...
in managed investment schemes. It was created by the Managed Investments Act 1998, which made significant amendments to the prescribed interest provisions contained in the Australian Corporations Act.
The new arrangements replaced the relatively well known formula used in most common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
jurisdictions of a two-tiered trustee/management company regime with a single responsible entity. The responsible entity holds scheme property on trust for scheme members. The responsible entity has power to appoint an agent to do anything that it is authorised to do in connection with a scheme. This may include the appointment of a custodian to hold scheme property on behalf of the responsible entity.
Since November 1999 the Australian takeover
Takeover
In business, a takeover is the purchase of one company by another . In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to the acquisition of a private company.- Friendly takeovers :Before a bidder makes an offer for another...
scheme regulations were extended to listed schemes and the takeovers provisions and compulsory acquisitions provisions apply.
A Responsible Entity has the dual role of trustee and manager of an investment scheme, and must be appointed if an investment scheme needs to be registered.
The Responsible Entity must be an Australian public company, with certain levels of net tangible assets, depending on the value of the scheme’s assets. The Responsible Entity must hold an Australian Financial Services Licence
Australian Financial Services Licence
An Australian Financial Services Licence is a license for any Australian businesses involved in the provision of financial services. It is issued by the Australian Securities and Investments Commission as required by the Corporations Act 2001....
.
When acting on behalf of an investment scheme, the Responsible entity must:
* Act honestly
* Exercise a reasonable degree of care and diligence
* Act in the best interest of members of the investment scheme
* Treat all investment scheme members equally
A Responsible Entity can either be owned by the same group as a fund manager, an "internal" responsible entity, or be an "external" responsible entity to the fund manager.