The duties of a Responsible Entity for a registered investment scheme are set out in the Corporations Act 2001, Section 601FC.
Any registered managed investment scheme in Australia must have a Responsible Entity.
A Responsible Entity must act honestly and in the best interest of the members of the investment scheme. A Responsible Entity must act as any reasonable person would, were they in the position of the Responsible Entity.
A Responsible Entity must treat all members who hold interests of the same class equally, and those who hold different classes must be treated fairly. The Responsible Entity must not make use of private information they encounter as part of their duties, either for their own advantage, or to the detriment of the members of the scheme.
A Responsible Entity must ensure their registered scheme has a constitution and compliance plan and both must meet the relevant legal and regulatory requirements.
Any property of the Responsible Entity must be kept separate from scheme property, which must be clearly identified as scheme property and regularly valued.
The Responsible Entity must report any breach of the Corporations Act which relates to their managed investment scheme, or which is likely to have a materially adverse impact on the members of the scheme to the Australian Securities and Investments Commission.
A duty of the Responsible Entity under the Corporations Act overrides any conflicting duties an officer or employee of the Responsible Entity has.
The Responsible Entity and its associates are not entitled to vote on a resolution of the schemes’ members if they have an interest in the resolution or matter, other than as a member. However, if the scheme is listed, the Responsible Entity is entitled to vote on resolutions to remove the Responsible Entity and choose a new one.