The obligations of an AFS Licensee and Trustee

THE QUICK ANSWER:

As AFS licensees, we are required to meet strict financial guidelines as set out in the Corporations Act 2001. In exercising trustee powers and duties to the fund and the fund’s investors, a trustee must always act honestly and in the best interests of investors.

CORPORATIONS ACT OBLIGATIONS AND COMPLIANCE OBLIGATIONS TO ASIC

As AFS licensees, we are required to meet strict financial guidelines as set out in the Corporations Act 2001. Under the conditions of its licence, MARQ must hold adequate professional indemnity insurance, maintain a minimum level of net tangible assets, and produce regular cash flow projections to ensure the availability of sufficient financial resources to meet obligations on an ongoing basis. Additionally, there are multiple requirements and obligations as mandated by the law and ASIC policy. A key obligation is the requirement to have detailed policies, systems and procedures around:

  • Organisational competence by ensuring the individuals appointed to act as Responsible Managers remain adequately trained;
  • Monitoring, supervising and training representatives;
  • Compliance;
  • Risk Management;
  • Cybersecurity
  • Adequacy of resources, human, technological and other;
  • Conflicts of interest;
  • Dispute resolution;
  • General conduct;
  • Disclosure.

OBLIGATIONS TO THE FUND AND INVESTORS

In exercising trustee powers and duties to the fund and the fund’s investors, a trustee must always act honestly and in the best interests of investors, exercise a reasonable degree of care and diligence and treat investors in the same class equally and investors in separate classes fairly. Additionally, a trustee is obligated to:

  • Provide regulatory compliance oversight as legislated by the Corporations Act 2001 and in accordance with ASIC guidelines;
    Operate the fund in the event the Investment Manager is unable to do so. This includes being due to any impropriety of the Investment Manager or non-adherence to a formal investment management agreement;
  • Refer to the fund’s disclosure documents and governing documentation before authorising any transfer of funds requested by the Investment Manager;
  • Ensure investment decisions comply with the Information Memorandum and the Constitution;
  • Not make use of information obtained to gain an improper advantage or cause detriment to investors;
  • Comply with the fund’s Constitution and all applicable laws;
  • Ensure the fund’s property is separated from the property of the Investment Manager and other entities; and
  • Assume ultimate responsibility for any complaints by investors or enquiries by the regulator.

PRIVACY & CYBERSECURITY

Understanding cybersecurity is critical to our risk management approach and regulatory compliance. While we need not be experts, we do need to know how to keep our clients’ information safe to comply with our legal obligations.

To that end, our compliance, operational and I.T. environment is regularly tested by our I.T. specialists, cybersecurity consultants, auditors, and other external parties.

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