Fund Operators
Managed Investment Scheme, which is also known as collective investments, can be created when investors come together to contribute money or asset’s worth its value in money and get interests in the scheme. It is also created when people pool their resources together or use combined resources for a joint enterprise. It is created as well when there’s is a responsible entity (fund manager) who operates the scheme on behalf of the investors. A managed investment scheme can exist in many forms which include property scheme, cash management scheme, mortgage scheme, ETFs, Agricultural scheme International or Australian Equity scheme, etc.
A fund operator is the one who manages a managed investment scheme, an Australian passport fund, and a corporate collective investment vehicle. The registration process for each of these collective investments differ. For a managed investment scheme, there are two criteria for the responsible entity:
- Be registered as am Australia public company.
- Must be an AFS licensee who is authorised to operate the scheme. It is essential that the license authorises operation of the scheme. If it doesn’t, the responsible entity can apply for variation or a new license which must be done well ahead of the application to register.
Registration for the scheme can be done online by lodging the form 5100 through the registered agent portal or AFS licensee portal for a current licensee but only the registered agent portal for new licensees. The other option is to download the form, fill it, and mail it to ASIC.
When the registration is done online, you must attach the scheme constitution, compliance plan, Form 5103 which is a statement that is signed by directors of the responsible entity, confirming compliance of document submitted with the stipulated format, a document cross-referencing the content of the constitution with the equivalent in the stipulated form, and in some cases, the appointment of another person to sign the compliance plan.
Running a Managed investment scheme
The fund operator is in charge of the running of an investment scheme. There are certain requirements which must be met in that process. These includes:
- Auditing the compliance plans: The fund operator is obligated to appoint an auditor who would conduct an audit of the scheme compliance plan within a timeframe of three months after the financial year has ended. The auditor submits the report to the responsible entity who lodges it with ASIC.
- Lodging audits and financial account: Part of the duty of the responsible entity is to prepare the financial report and directors’ report for each financial year which is then lodged with ASIC.
- Risk Management and Compliance: Responsible entity must comply with all the rules and obligations expected of them as AFS licensee and also have a risk management system that can assess and manage any risk that is identified.
- Changing the name of the scheme: If there is any reason for this, it is the responsible entity duty to lodge a notification for change of name.
The fund operator also performs other functions such as modifications or replacements of constitution and compliance plans.