DFP4_T10_R1_v3.pdf - October 2013 PDPLUS Understanding the...

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October 2013 PD PLUS Understanding the obligations of responsible entities OVERVIEW It is impossible to understand a managed investment scheme without fully comprehending the role and obligations of responsible entities, which are used to operate the scheme. Responsible entities are heavily regulated and are due to be further updated this year, so understanding how they operate involves navigating a legislative minefield. There are other parties which work on behalf of responsible entities that also have to be understood to fully illustrate how responsible entities operate. FEATURED INTERVIEWEES Gil Orski Chief operating officer Aberdeen Asset Management “The responsible entity is responsible for all the actions of the custodian. The responsible entity will need to keep an eye on them, monitor them and do the relevant due diligence on them and certainly get a lot of comfort that they’ve got the appropriate systems and resources in place, there’s a lot of infrastructure and systems required to be a custodian.” Jon Ireland Senior associate Henry Davis York “Those fiduciary obligations translate into general ongoing RE obligations under the Corporations Act, so in terms of the specific responsibilities and duties you see aspects including a requirement to act honestly, a requirement to act in the best interests of unit holders and not to prefer the RE’s own position to the position of the unit holders, an obligation to treat all unit holders in the same class equally and in different classes fairly.” LEARNING OBJECTIVES After reading this article you should be able to: Explain the role of a responsible entity Outline the obligations of a responsible entity Discuss the relationship between responsible entities and custodians. KNOWLEDGE AREAS AND ACCREDITATION Knowledge area: Managed Investments — Legal Environment and Disclosure (60 minutes). FPA CPD points 1.0 Dimension: Capability (FPA 006113). AFA CPD points 1.0 (AFA 01022009). October 2013 • 1
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