Trustees Australia Limited (Trustees Australia) is an ASX listed company with an Australian Financial Services Licence (AFSL 260033) which authorising it to:
- carry on a financial services business;
- provide financial product advice and deal in a financial product for a number of financial products;
- operate a range of registered managed investment schemes; and
- provide custodial and depository services for retail and wholesale clients.
Its subsidiary company QTI Managed Funds holds another licence (AFSL 260038) authorising it to:
- carry on a financial services business;
- provide financial product advice and deal in a financial product for a number of financial products; and
- provide underwriting services for interests in managed investment schemes and issues of securities.
With these authorisations in place, Trustees Australia is well-positioned to provide Responsible Entity (RE) and Trustee services to its clients. Trustees Australia as RE or Trustee offers the following services:
Setup of New Schemes
- assistance with the preparation or review of Scheme documentation such as:
- compliance plan (if applicable);
- procedures and registers;
- product disclosure statement or information memorandum; and
- outsourcing agreements such as an investment management agreement (IMA), administration management agreement (AMA) and custody agreement
- assistance in scheme marketing and promotions and the development of a Fund website;
- software solutions to administer and manage the scheme such as the asset register, investor register and transaction processing register;
- management of the scheme registration process with ASIC (if applicable); and
- establishment of the fund accounting system, setup of fund bank accounts, GST/BAS registration, ABN/TFN registration etc.
Transition for Existing Schemes
- the management of the transition process including:
- assistance with the preparation or review of documentation required for a meeting of Unitholders to resolve in favour of the change in RE; or
- assistance with the preparation or review of documentation to arrange for the Court to replace the existing RE with Trustees Australia on a temporary basis for three months pending a meeting of members to appoint a permanent RE;
- the review of existing scheme documentation and any amendments required subsequent to RE change; and
- the familiarisation and review of existing systems and processes undertaken by the Fund and identification of potential improvements or cost benefits to be achieved through new management processes.
Ongoing Scheme operation
- Monitoring of compliance with the Corporations Act, the constitution, PDS/ Information memorandum and compliance plan;
- Liaison with ASIC;
- Complaints monitoring and resolution;
- Compliance committee management and operation;
- Involvement with the Investment Committee;
- Review of financial resources and insurance to meet licence conditions;
- Provision of domestic custody services with partnerships with global custodians;
- Appointment and monitoring of external service providers;
- Establishment of in-house or outsourced Fund administration services including:
- Fund accounting and tax reporting
- Unit registry
- Unitholder reporting
- Transaction settlements.
Clients seeking a RE or Trustee typically includes:
- investment managers or promoters who want to set up a managed investment scheme;
- investors who wish to replace their existing RE or Trustee; and
- existing RE’s or Trustee’s who wish to be replaced by a RE or Trustee for hire.
Role of a Trustee / Responsible Entity
The role of a Trustee and RE are quite similar as both are ultimately responsible for the operation of the underlying trust. Responsible Entities however have additional obligations and responsibilities as their mandate includes the ability to operate registered managed investment schemes. A managed investment scheme must be registered with the Australian Securities and Investments Commission (ASIC) where:
- the scheme has 20 or more members; or
- the scheme is promoted by a person who was in the business of promoting managed investment schemes.
A managed investment scheme does not need to be registered if the issues of interests in the scheme are “excluded issues” within the meaning of section 66 of the Corporations Act 2001 (Act).
Where the Act requires a managed investment scheme to be registered, a RE who carries the appropriate AFSL authorisations must be appointed. These authorisations are granted subject to conditions being met by the licensee. Where the Act does not require a managed investment scheme to be registered, a Trustee who simply holds sufficient authorisations to advise and deal in the assets of the scheme can be appointed.
The authorisation requirements of a RE are designed to provide a greater degree of investor protection and include the need to adopt sufficient compliance measures, enforce training standards, increase disclosure obligations and maintain sufficient base level financial requirements and liquidity.
An RE may operate either:
- a registered scheme (MIS) as an RE; or
- an unregistered scheme as a Trustee.
A Trustee that is not an RE can only operate an unregistered scheme.
The RE carries the ultimate responsibility for the operations of the managed investment scheme. It must act in accordance with the Corporations Act, the Fund constitution, the compliance plan (for a registered scheme) and the prospectus (registered scheme) or information memorandum (unregistered scheme). While ultimately responsible, the RE can elect to outsource the management functions of the RE to external providers by way of an outsourced management agreement if it is in the interest of unitholders to do so. Excluding the functions of investment management, Trustees Australia has the resource capabilities, if required, to offer a solutions for a range of different types of managed investment scheme.
Trustees Australia also has a network of competent providers in the provision of administrative and custodial services where it is in the interests of investors to outsource these functions.