A Responsible Entity is ultimately responsible for the operation of managed investment schemes and must be appointed if an investment scheme needs to be registered. The Responsible Entity must be an Australian public company and may operate either for a registered scheme as a Responsible Entity or an unregistered scheme as a Trustee. Clients seeking a Responsible Entity are commonly investment managers, investors wishing to replace their existing Responsible Entity or existing Responsible Entity’s wishing to be replaced by a Responsible Entity for hire.
Carrying 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 Product Disclosure Statement (registered scheme) or information memorandum (unregistered scheme). A company cannot be chosen or appointed as a responsible entity unless it is a public company that holds an Australian financial services (AFS) licence authorising it to operate the registered scheme (see section 601FA of the Corporations Act 2001 (the Act)).
The authorisation requirements provide a greater degree of investor protection. This includes the need to adopt sufficient compliance measures, enforce training standards, increase disclosure obligations and maintain sufficient base level financial requirements and liquidity.
The role of the Responsible Entity includes responsibility for compliance with the managed investment scheme constitution and compliance plan, and ongoing satisfaction of legislative and regulatory requirements. The Responsible Entity has a duty to act honestly and in the best interest of investors, treat members equally and fairly and exercise care and diligence.
Global Merces holds an Australian Financial Services Licence (AFSL 460 883) and can help ensure the requirements of a registered and unregistered investment scheme, including:
- the carry on of a financial services business;
- general product advice and deal in a financial product for a number of financial products;
- custodial and depository services for retail and wholesale clients; and
- services for interests in managed investment schemes.
Global Merces provides Responsible Entity and Trustee services to its clients including
- Setting up a new Fund or Scheme;
- Creating and monitoring a compliance plan;
- Transition for existing Schemes; and
- Ongoing Scheme operation
Global Merces will help ensure compliance with all legal and regulatory requirements, manage reporting, accounting, and back-office services.
As well as acting as a Responsible Entity for hire for registered schemes, Global Merces can also offer its trustee services for unregistered schemes.