Responsible entity

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A responsible entity is a peculiarly Australian 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.

[edit] References

• Ford, HAJ; Austin, RP; and Ramsay, IM; Ford's Principles of Corporation Law Butterworths