Managed Investments Act 1998 (62 of 1998)
Schedule 2
Part 1 Amendment of the Corporations Law set out in section 82 of the Corporations Act 1989
103 After section 331
Insert:
Division 1A - Appointment and removal of auditors (registered schemes)
331AA Qualifications of auditors
(1) Subject to this section, a person must not:
(a) consent to be appointed as auditor of a registered scheme; or
(b) act as auditor of a registered scheme; or
(c) prepare a report required by this Law to be prepared by a registered company auditor or by an auditor of a registered scheme;
if:
(d) the person is not a registered company auditor; or
(e) the person, or a body corporate in which the person is a substantial shareholder for the purposes of Part 6.7, owes more than $5,000 to the scheme's responsible entity, to a related body corporate or to an entity that the responsible entity controls; or
(f) the person:
(i) is an officer of the responsible entity; or
(ii) is a partner, employer or employee of an officer of the responsible entity; or
(iii) is a partner or employee of an employee of an officer of the responsible entity.
(2) Subject to this section, a firm must not:
(a) consent to be appointed as auditor of a registered scheme; or
(b) act as auditor of a registered scheme; or
(c) prepare a report required by this Law to be prepared by a registered company auditor or by an auditor of a registered scheme;
unless:
(d) at least 1 member of the firm is a registered company auditor who is ordinarily resident in Australia; and
(e) the business name under which the firm is carrying on business is registered under a law of a State or Territory relating to the registration of business names or a return in the prescribed form has been lodged showing, in relation to each member of the firm, the member's full name and address as at the time when the firm so consents, acts or prepares a report; and
(f) no member of the firm, and no body corporate in which a member of the firm is a substantial shareholder for the purposes of Part 6.7, owes more than $5,000 to the scheme's responsible entity or to an entity that the responsible entity controls; and
(g) no member of the firm is:
(i) an officer of the responsible entity; or
(ii) a partner, employer or employee of an officer of the responsible entity; or
(iii) a partner or employee of an employee of an officer of the responsible entity; and
(h) no officer of the responsible entity receives any remuneration from the firm for acting as a consultant to it on accounting or auditing matters.
(3) Subsections 324(3), (4), (5) and (6) apply in relation to a registered scheme as if:
(a) those subsections were part of this section; and
(b) references in those subsections to a company were instead references to the registered scheme's responsible entity.
(4) Subsections 324(7), (8), (9), (10), (11) and (16) apply in relation to a registered scheme as if:
(a) those subsections were part of this subsection; and
(b) references in those subsections to a company were instead references to the registered scheme.
331AB Appointment of auditors
(1) Within 1 month after the day on which a registered scheme is registered, the responsible entity must appoint a person or persons, a firm or firms, or a person or persons and a firm or firms, as auditor or auditors of the scheme.
(2) Within 1 month after a vacancy occurs in the office of auditor of a registered scheme, if there is no surviving or continuing auditor of the scheme, the responsible entity must appoint a person or persons, a firm or firms, or a person or persons and a firm or firms, to fill the vacancy.
(3) While a vacancy in the office of auditor of a registered scheme continues, the surviving or continuing auditor or auditors (if any) may act.
(4) The responsible entity of a registered scheme must not appoint a person or firm as auditor of the scheme unless that person or firm has, before the appointment, consented to act as auditor by notice in writing given to the responsible entity and has not withdrawn that consent by notice in writing given to the responsible entity.
(5) A notice given by a firm under subsection (4) is to be signed by a member of the firm who is a registered company auditor:
(a) in the firm's name; and
(b) in the member's name.
(6) If the responsible entity of a registered scheme appoints a person or firm as auditor of the scheme in contravention of subsection (4), the purported appointment does not have any effect and the responsible entity, and any officer of the responsible entity who is in default, are each guilty of an offence.
(7) If the responsible entity of a registered scheme does not appoint an auditor when required by this Law to do so, the ASC may, on application in writing by a member of the scheme, appoint as auditor or auditors of the scheme a person or persons, a firm or firms, or a person or persons and a firm or firms. An appointment can only be made with the consent of the person or firm concerned.
(8) If a director of the responsible entity of a registered scheme fails to take all reasonable steps to secure compliance with subsection (1) or (2), the director is guilty of an offence.
331AC Removal and resignation of auditors
(1) The responsible entity of a registered scheme may, with the ASC's consent, remove the auditor of the scheme from office.
(2) An auditor of a registered scheme may, by notice in writing given to the responsible entity, resign as auditor of the scheme if:
(a) the auditor:
(i) has, by notice in writing given to the ASC, applied for consent to the resignation and stated the reasons for the application; and
(ii) has, at or about the same time as giving the notice to the ASC, given the responsible entity notice in writing of the application to the ASC; and
(b) the ASC has given its consent.
(3) As soon as practicable after the ASC receives a notice from an auditor under subsection (2), the ASC must notify the auditor, and the responsible entity of the registered scheme, whether it consents to the resignation.
(4) A statement made by an auditor in an application to the ASC under subsection (2) or in answer to an inquiry by the ASC relating to the reasons for the application:
(a) is not admissible in evidence in any civil or criminal proceedings against the auditor; and
(b) must not be made the ground of a prosecution, action or suit against the auditor.
A certificate by the ASC that the statement was made in the application or in answer to the inquiry by the ASC is conclusive evidence that the statement was so made.
(5) The resignation of an auditor takes effect:
(a) on the day (if any) specified for the purpose in the notice of resignation; or
(b) on the day on which the ASC gives its consent to the resignation; or
(c) on the day (if any) fixed by the ASC for the purpose;
whichever occurs last.
(6) If, on the retirement or withdrawal of a member of a firm, the firm will no longer be capable of acting as auditor of a registered scheme because of paragraph 331AA(2)(d), the member is (if not disqualified from acting as auditor of the scheme) taken to be the auditor of the scheme until he or she obtains the consent of the ASC to his or her retirement or withdrawal.
(7) Within 14 days after:
(a) the removal from office of an auditor of a registered scheme; or
(b) the receipt of a notice of resignation from an auditor of a registered scheme;
the responsible entity must lodge with the ASC a notice of the removal or resignation in the prescribed form.
331AD Effect of winding up an office of auditor
An auditor of a registered scheme ceases to hold office if:
(a) the scheme's constitution provides that the scheme is to be wound up at a specified time, in specified circumstances or on the happening of a specified event, and that time is reached, those circumstances occur or that event occurs; or
(b) the members pass an extraordinary resolution directing the responsible entity to wind up the scheme; or
(c) the Court makes an order directing the responsible entity to wind up the scheme; or
(d) the members pass an extraordinary resolution to remove the responsible entity but do not, at the same meeting, pass an extraordinary resolution choosing a company to be the new responsible entity that consents to becoming the scheme's responsible entity.
331AE Fees and expenses of auditors
The reasonable fees and expenses of an auditor of a registered scheme are payable by the responsible entity.