Federal Register of Legislation - Australian Government

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PR No. 45 Rules/Other as made
This Rule specifies various accounting procedures for the maintenance and administration of joint investments.
Administered by: Treasury
Registered 06 Feb 2009
Gazetted 30 Jun 1999
Date of repeal 01 Jul 2011
Repealed by Life Insurance (prudential standard) determination No. 12 of 2010 - Prudential Standard LPS 700 Friendly Society Benefit Funds

 

 

 

Life Insurance Act 1995

 

PRUDENTIAL RULES No 45

 

 

 

 

JOINT INVESTMENTS OF FRIENDLY SOCIETY APPROVED BENEFIT

FUNDS (S 16H(4A)(b))

 

 

 

I, Graeme John Thompson, a delegate of the Australian Prudential Regulation Authority (“APRA”), under subsection 252(1) of the Life Insurance Act 1995 (the “Act”), MAKE the following Prudential Rules for the purposes of paragraph 16H(4A)(b) of the Act (section 16H modifies the application of section 34 of the Act in relation to friendly societies):

 

 

 

Application

 

1.   A friendly society may only invest assets of 2 or more approved benefit funds in a single investment (a “joint investment”), in accordance with the following rules.

 

Joint investment accounts

 

2.   The friendly society must:

 

(a)       establish a joint investment account in the records of each contributing fund that identifies each contributing fund's contribution; and

 

(b)       keep a joint investment register that records all transactions of each joint investment and of each contributing fund’s contribution in each separate joint investment; and

 

(c)       reconcile the aggregate of the joint investment accounts kept in the records of each contributing fund with the friendly society’s joint investment register.

 

3.   The friendly society must ensure that:

 

(a)       any joint investments are readily able to be liquefied; and

 

(b)       investment decisions in respect of one contributing fund do not directly affect the asset exposures of any other contributing fund.

 

Allocation of income and expenses

 

4.   The friendly society must allocate:

 

(a)       the income received from the joint investments to the contributing funds equitably in accordance with their respective contributions; and


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(b)       any direct costs of redemption to the contributing funds in accordance with their respective contributions.

 

Reconciliation of accounts

 

5.   Subject to rules 6 and 7, the friendly society must reconcile the joint investment accounts kept in the register of each contributing fund with the friendly society’s joint investment register at least once every 7 days, or at such other time as permitted by APRA.

 

6.   If the joint investment is an investment relating to unitised contracts, the friendly society must carry out the reconciliation referred to in rule 5 at least as frequently as the unit prices in relation to the relevant contract are quoted, but in any event, at least once every 7 days or at such other time as permitted by APRA.

 

7.   In the case of an investment in respect of which a friendly society conducts a mark to market exercise on a more frequent basis than once every 7 days, the reconciliation referred to in rule 5 must be carried out at least as frequently as the mark to market exercise.

 

 

 

This instrument commences on the transfer date (as defined in section 2 of the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999).

 

 

 

 

Dated 24 June 1999

 

 

  [Signed]

 

 

G J Thompson

Chief Executive Officer

Australian Prudential Regulation Authority