Governance Approach
To us, corporate governance is an embedded process by which a company is directed and managed. It influences how a company sets and achieves its goals, how risks are monitored and assessed, and how performance can be optimised. A good corporate governance structure encourages companies to display a transparent approach towards their conduct, accountability and control systems commensurate with the risks involved. No single model of good corporate governance works alone. Every business must develop their corporate governance culture, processes and embedd it. Undoubtedly, this will evolve with the changing circumstances of a business and be tailored to meet those circumstances.
Our governance framework forms part of the overall framework of our parent company but importantly, operates independently (in some cases) for the activities we undertake.
Responsible Entity
Millinium Capital Managers Limited ("Millinium Capital Managers ") is a Responsible Entity under Chapter 5C of the Corporations Act 2001 (Cth) (the "Act"). Millinium Capital Managers is an unlisted public company and holds an Australian Financial Services Licence, No.284336 ("AFSL"). The Act, general law duties and trustee legislation apply to us. Millinium Capital Managers primary duty is to act with diligence and be responsible for management and operations of the managed investment schemes it operates. Our statutory duties require us (amongst others) to:
- comply with a fund's constitution;
- comply with a fund's compliance plan;
- comply with the Act;
- act honestly;
- exercise the appropriate degree of care and diligence;
- act in the best interests of the scheme members and give priority to their interests over the Responsible Entity's interests; and
- treat all investors equally or if there are classes of investors, then fairly.
As a Responsible Entity, we must report to the Australian Securities and Investments Commission ("ASIC") certain breaches of the Act. There are civil and criminal penalties that apply for breach of duties and improper conduct.
Responsibility for our Agents
As we hold a fund's trust property on trust for scheme members, we may use agents to assist with this, including other admininstrative duties but remain liable for any loss caused by them, even if the agents are fraudulent or act outside their authority, subject to the law and determination of the courts.
Board of Directors
Millinium Capital Managers' Board is composed of half independent directors to ensure proper representation of investor and shareholder interests and meet Chapter 5C requirements.
Our Committees
We have the following internal committees that act under delegation from the Millinium Capital Managers' Board:
- Investment Committee;
- Credit and Exit Committees;
- Compliance and Audit Committee.
These committees comprise management and at a minimum, a director of Millinium Capital Managers for there to be a quorum. Millinium Capital Managers will remove, change and add other committees over time. Each committee will meet as and when required for deliberation.
Fund Registration
All our funds are managed investment schemes, being registered with the ASIC. The definition of a "managed investment scheme" has 3 essential elements under the Act:
- people contributing money to acquire interests in a scheme; and
- some contributions are pooled or are used in a common enterprise to produce financial benefits, rights or interests for members of a fund; and
- members of the scheme do not have day to day control over its operation.
Custodian
We have appointed an external custodian in accordance with our AFSL and ASIC's policies to hold scheme property. Perpetual Corporate Trust Limited ("Perpetual") is our funds' custodian. Perpetual's role as custodian, is limited to holding assets of our funds as an agent of us. Our custodian meets the threshold of $5 million to hold the funds' scheme property for us. Perpetual acts as the custodian, but has no supervisory role in relation to the operation of our schemes nor is responsible for protecting an investor's interests. Perpetual has no liability or responsibility to investors for any act done or omission made in accordance with the terms of its services agreement or custody agreement with us.
Scheme Property
As a Responsible Entity, we must ensure that scheme property is clearly identified and is held separately from both our own assets as well as from property of any other scheme, subject to ASIC policy that allows certain "omnibus" accounts to mix assets for funds.
Constitution
Each constitution regulates a fund's operations and management between the Responsible Entity and unit holder. It must provide adequate provision on certain matters, including consideration for interests in the scheme, investment powers, complaints, winding up, fees and indemnification rights, borrowing powers and right to withdraw from the scheme. ASIC will assess the adequacy of such provisions during a fund's registration process.
Compliance Plan
The Responsible Entity must prepare a compliance plan which sets out the measures that the Responsible Entity will apply in operating the fund to ensure compliance with the Act and the constitution. The compliance plan must contain adequate measures for ensuring that scheme property is clearly identified and held separately, compliance controls and functions perform properly, scheme property is valued at regular intervals, the compliance plan is audited and adequate scheme records are kept. The ASIC assesses the adequacy of such provisions and has released policy on its expectations.
AFSL Requirements
We hold an AFSL that authorises us to deal and arrange in financial assets, such as managed investments, securities, mortgages and derivatives and act as a Responsible Entity to operate managed investment schemes. As a Responsible Entity, we have to meet net tangible assets and scheme property requirements. Our AFSL imposes other conditions on financial requirements. We maintain appropriate professional indemnity and fraud insurance, and have access to sufficient financial resources to meet ongoing scheme related cash needs. We have a complaints handling procedure which complies with the ASIC policy and relevant Australian standards.
Related Party Transactions
Related party transaction provisions of the Act apply to schemes and prohibit financial benefits being given to a Responsible Entity or to a related party from scheme property. Therefore, our dealings and transactions must be transparent and on arm's length terms unless an exemption applies in accordance with the Act. We maintain a register for related party dealings.
Alternative Forms of Remuneration
We maintain a soft dollar register for alternative forms of remuneration, which can be found on our website, www.millinium.com.au
Policies and procedures
We are required to maintain processes and procedures to meet our requirements to hold an AFSL and form part of the management and operation of the activities undertaken.
© Issued by Millinium Capital Managers Limited, ABN 32 111 283 357, AFSL No. 284336. This document does not constitute personal advice. Investors should consider obtaining professional advice and whether the financial products offered by Millinium Capital Managers Limited suits their objectives, financial situation or needs. This document may be amended, withdrawn or replaced without notice. This document is intended to provide a general outline of Millinium Capital Managers Limited governance procedures and processes under law. It is not intended to be and is not a complete or definitive statement of Millinium Capital Managers Limited, its business or processes or operations.