Corporations Act 2001

CHAPTER 5C - MANAGED INVESTMENT SCHEMES  

PART 5C.4 - THE COMPLIANCE PLAN  

SECTION 601HA   CONTENTS OF THE COMPLIANCE PLAN  

601HA(1)    
The compliance plan of a registered scheme must set out adequate measures that the responsible entity is to apply in operating the scheme to ensure compliance with this Act and the scheme ' s constitution, including the arrangements for:

(a)    ensuring that all scheme property is clearly identified as scheme property and held separately from property of the responsible entity and property of any other scheme (see paragraph 601FC(1)(i) ); and

(b)    if the scheme is required to have a compliance committee (see section 601JA ) - ensuring that the compliance committee functions properly, including adequate arrangements relating to:

(i) the membership of the committee; and

(ii) how often committee meetings are to be held; and

(iii) the committee ' s reports and recommendations to the responsible entity; and

(iv) the committee ' s access to the scheme ' s accounting records and to the auditor of the scheme ' s financial statements; and

(v) the committee ' s access to information that is relevant to the responsible entity ' s compliance with this Act; and

(c)    ensuring that the scheme property is valued at regular intervals appropriate to the nature of the property; and

(d)    ensuring that compliance with the plan is audited as required by section 601HG ; and

(e)    ensuring adequate records of the scheme ' s operations are kept; and

(f)    any other matter prescribed by the regulations.

601HA(2)    
If:

(a)    a registration application is made as a result of a resolution passed under subparagraph 1457(1)(a)(i) ; and

(b)    the resolution included a direction under subsection 1457(1A) ;

the compliance plan lodged with the application must provide for scheme property to be held by a person other than the responsible entity, or a person that is not related to the responsible entity, as the responsible entity ' s agent.

SECTION 601HB   COMPLIANCE PLAN MAY INCORPORATE PROVISIONS FROM ANOTHER SCHEME ' S PLAN  

601HB(1)    
The responsible entity of a registered scheme may lodge with ASIC a compliance plan for the scheme that is expressed to incorporate specified provisions, as in force at a specified time, of a compliance plan of another registered scheme of which it is also the responsible entity.

601HB(2)    
The specified provisions, as in force at the specified time, are taken to be included in the plan.

SECTION 601HC  

601HC   DIRECTORS MUST SIGN LODGED COPY OF COMPLIANCE PLAN  

The copy of a scheme ' s compliance plan that is lodged with ASIC must be signed by all the directors of the responsible entity.

SECTION 601HD   ASIC MAY REQUIRE FURTHER INFORMATION ABOUT COMPLIANCE PLAN  

601HD(1)    
ASIC may direct the responsible entity of a registered scheme to give it information about the arrangements contained in the compliance plan. The direction is to be given by notice in writing to the responsible entity.

601HD(2)    

An offence based on subsection (1) is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code .

SECTION 601HE   CHANGING THE COMPLIANCE PLAN  

Responsible entity ' s powers

601HE(1)    
The responsible entity of a registered scheme may modify the scheme ' s compliance plan or repeal it and replace it with a new compliance plan.

ASIC may require modifications

601HE(2)    
ASIC may direct the responsible entity of a registered scheme to modify the scheme ' s compliance plan, as set out in the direction, to ensure that the plan is consistent with section 601HA . The direction is to be given by notice in writing to the responsible entity.

Lodgment of modification or new plan

601HE(3)    
The responsible entity must lodge with ASIC a copy of a modification of the scheme ' s compliance plan or of a new compliance plan within 14 days after the modification is made or the old plan is repealed. The copy must be signed by all the directors of the responsible entity.

SECTION 601HF   ASIC MAY REQUIRE CONSOLIDATION OF COMPLIANCE PLAN TO BE LODGED  

601HF(1)    
ASIC may direct the responsible entity of a registered scheme to lodge a consolidated copy of the scheme ' s compliance plan.

601HF(2)    
The consolidation must set out:

(a)    the plan as modified to the time of lodgment; and

(b)    if required by ASIC ' s direction - the full text of provisions taken to be included in the plan by subsection 601HB(2) .

SECTION 601HG   AUDIT OF COMPLIANCE PLAN  

601HG(1)    

The responsible entity of a registered scheme must ensure that at all times a registered company auditor, an audit firm or an authorised audit company is engaged to audit compliance with the scheme ' s compliance plan in accordance with this section. This auditor, firm or company is referred to as the auditor of the compliance plan .

601HG(2)    

A person is not eligible to act as the individual auditor, lead auditor or review auditor of the compliance plan if the person is:

(a)    an associate of the responsible entity; or

(b)    an agent holding scheme property on behalf of the responsible entity or an associate of an agent of that kind; or

(c)    the auditor of the responsible entity ' s financial statements.

601HG(2A)    
However:

(a)    the auditor of the compliance plan and the auditor of the responsible entity ' s financial statements may work for the same firm of auditors or audit company; and

(b)    the lead auditor or review auditor of the compliance plan (on the one hand) and the lead auditor or review auditor of the responsible entity ' s financial statements (on the other hand) may work for the same firm of auditors or audit company.

601HG(3)    
Within 3 months after the end of a financial year of the scheme, the auditor of the compliance plan must:

(a)    examine the scheme ' s compliance plan; and

(b)    carry out:

(i) if the scheme has only had one responsible entity during the financial year - an audit of the responsible entity ' s compliance with the compliance plan during the financial year; or

(ii) if the scheme has had more than one responsible entity during the financial year - an audit of each responsible entity ' s compliance with the compliance plan during that part of the financial year when it was the scheme ' s responsible entity; and

(c)    give to the scheme ' s current responsible entity a report that states whether, in the auditor ' s opinion:

(i) the responsible entity, or each responsible entity, complied with the scheme ' s compliance plan during the financial year or that part of the financial year when it was the scheme ' s responsible entity; and

(ii) the plan continues to meet the requirements of this Part.

Contravention by individual auditor

601HG(4)    

An individual auditor conducting an audit of a compliance plan contravenes this subsection if:

(a)    the auditor is aware of circumstances that:

(i) the auditor has reasonable grounds to suspect amount to a contravention of this Act; or

(ii) amount to an attempt, in relation to the audit, by any person to unduly influence, coerce, manipulate or mislead a person involved in the conduct of the audit (see subsection (12) ); or

(iii) amount to an attempt, by any person, to otherwise interfere with the proper conduct of the audit; and

(b)    if subparagraph (a)(i) applies:

(i) the contravention is a significant one; or

(ii) the contravention is not a significant one and the auditor believes that the contravention has not been or will not be adequately dealt with by commenting on it in the auditor ' s report or bringing it to the attention of the directors; and

(c)    the auditor does not notify ASIC in writing of those circumstances as soon as practicable, and in any case within 28 days, after the auditor becomes aware of those circumstances.

Contravention by audit company

601HG(4A)    

An audit company conducting an audit of a compliance plan contravenes this subsection if:

(a)    the lead auditor for the audit is aware of circumstances that:

(i) the lead auditor has reasonable grounds to suspect amount to a contravention of this Act; or

(ii) amount to an attempt, in relation to the audit, by any person to unduly influence, coerce, manipulate or mislead a person involved in the conduct of the audit (see subsection (12) ); or

(iii) amount to an attempt, by any person, to otherwise interfere with the proper conduct of the audit; and

(b)    if subparagraph (a)(i) applies:

(i) the contravention is a significant one; or

(ii) the contravention is not a significant one and the lead auditor believes that the contravention has not been or will not be adequately dealt with by commenting on it in the auditor ' s report or bringing it to the attention of the directors; and

(c)    the lead auditor does not notify ASIC in writing of those circumstances as soon as practicable, and in any case within 28 days, after the lead auditor becomes aware of those circumstances.

Contravention by lead auditor

601HG(4B)    

A person contravenes this subsection if:

(a)    the person is the lead auditor for an audit of a compliance plan; and

(b)    the person is aware of circumstances that:

(i) the person has reasonable grounds to suspect amount to a contravention of this Act; or

(ii) amount to an attempt, in relation to the audit, by any person to unduly influence, coerce, manipulate or mislead a person involved in the conduct of the audit (see subsection (12) ); or

(iii) amount to an attempt, by any person, to otherwise interfere with the proper conduct of the audit; and

(c)    if subparagraph (b)(i) applies:

(i) the contravention is a significant one; or

(ii) the contravention is not a significant one and the person believes that the contravention has not been or will not be adequately dealt with by commenting on it in the auditor ' s report or bringing it to the attention of the directors; and

(d)    the person does not notify ASIC in writing of those circumstances as soon as practicable, and in any case within 28 days, after the person becomes aware of those circumstances.

601HG(5)    
The auditor of the compliance plan:

(a)    has a right of access at all reasonable times to the books of the scheme; and

(b)    may require an officer of the responsible entity to give the auditor information and explanations for the purposes of the audit.

601HG(6)    
An officer of the responsible entity must:

(a)    allow the auditor of the compliance plan to have access to the books of the scheme; and

(b)    give the auditor information or an explanation required under subsection (5) ; and

(c)    otherwise assist the conduct of the audit.

601HG(7)    
The responsible entity must lodge the auditor ' s report under subsection (3) with ASIC at the same time as the financial statements and reports in respect of the scheme are to be lodged with ASIC (see sections 292 and 321 ).

601HG(7A)    

An offence based on subsection (1) , (3) , (6) or (7) is an offence of strict liability.

Note: For strict liability , see section 6.1 of the Criminal Code .

601HG(8)    
The auditor of the compliance plan has qualified privilege in respect of:

(a)    a statement made in a report under subsection (3); or

(b)    a notification to ASIC under subsection (4) .

601HG(9)    
This section does not prevent the responsible entity from arranging for the auditor of the compliance plan to carry out audits in addition to those required by this section.

Significant contraventions

601HG(10)    

In determining for the purposes of this section whether a contravention of this Act is a significant one, have regard to:

(a)    the level of penalty provided for in relation to the contravention; and

(b)    the effect that the contravention has, or may have, on:

(i) the overall financial position of the company, registered scheme, notified foreign passport fund or disclosing entity; or

(ii) the adequacy of the information available about the overall financial position of the company, registered scheme, notified foreign passport fund or disclosing entity; and

(c)    any other relevant matter.

601HG(11)    

Without limiting paragraph (10)(a) , a penalty provided for in relation to a contravention of a provision of Part 2M.2 or 2M.3 , or section 324DAA , 324DAB or 324DAC , includes a penalty imposed on a director, because of the operation of section 344 , for failing to take reasonable steps to comply with, or to secure compliance with, that provision.

Person involved in audit

601HG(12)    

In this section:

person involved in the conduct of an audit
means:

(a) the auditor; or

(b) the lead auditor for the audit; or

(c) the review auditor for the audit; or

(d) a professional member of the audit team for the audit; or

(e) any other person involved in the conduct of the audit.

SECTION 601HH   REMOVAL AND RESIGNATION OF AUDITORS  

Removal of auditor by responsible entity

601HH(1)    
The responsible entity:

(a)    must remove the auditor of the compliance plan if the auditor becomes ineligible under subsection 601HG(2) to act as auditor of the compliance plan; and

(b)    may, with ASIC ' s consent, remove the auditor of the compliance plan.

Resignation of auditor

601HH(2)    
The auditor of the compliance plan may resign by written notice to the responsible entity if:

(a)    the auditor:

(i) applies to ASIC in writing for its consent to the resignation; and

(ii) gives the responsible entity written notice of the application at or about the same time as applying to ASIC; and

(b)    ASIC consents to the resignation.

601HH(3)    
As soon as practicable after receiving the application, ASIC must notify the auditor and the responsible entity whether it consents to the resignation.

601HH(4)    
A statement by the auditor in the application or in answer to an inquiry by ASIC relating to the reasons for the application:

(a)    is not admissible in evidence in any civil or criminal proceedings against the auditor (other than proceedings for a contravention of section 1308 ); and

(b)    may not be made the ground of a prosecution (other than a prosecution for a contravention of section 1308 ), action or suit against the auditor.

A certificate by ASIC that the statement was made in the application, or in answer to an inquiry by ASIC, is conclusive evidence that the statement was so made.

601HH(5)    
The auditor ' s resignation takes effect on the later of:

(a)    the day (if any) specified in the notice of resignation; or

(b)    the day ASIC consents to the resignation; or

(c)    the day (if any) fixed by ASIC for the purpose.

SECTION 601HI  

601HI   ACTION ON CHANGE OF AUDITOR OF COMPLIANCE PLAN  

If the auditor of the compliance plan of a registered scheme changes, the responsible entity must, as soon as practicable after the change and in writing, ask ASIC to alter the record of the scheme ' s registration to show the name of the new auditor as the auditor of the scheme ' s compliance plan. ASIC must comply with the request if the change complies with this Act.