Victorian Consolidated Legislation

Trustee Companies Act 1984 - SECT 40

PART VII COMMON FUNDS AND INVESTMENTS

Common funds

40. Common funds



(1) A trustee company may establish and keep in its books one or more funds to
be called a "common fund" and if more than one with an appropriate
distinguishing number.

(2) A common fund established in the books of a company shall be invested in
such class or classes of investments as is determined by the company prior to
the establishment of the fund.

(2A) A trustee company may vary a class or classes of investments under
subsection (2) if-

   (a)  prior to the commencement of section 4 of the Trustee and Trustee
        Companies (Amendment) Act 1995, the company-

   (i)  established a common fund under this section; and

   (ii) determined to invest or invested the common fund in a class or classes
        of investments under section 4 of the Trustee Act 1958 as in force
        immediately before the commencement of section 4 of the Trustee and
        Trustee Companies (Amendment) Act 1995; and

   (b)  the company makes the variation within 12 months of the commencement
        of section 4 of the Trustee and Trustee Companies (Amendment) Act
        1995.





(3) A trustee company may in its discretion invest any money in its hands
either-

   (a)  on the separate account of the estate to which the moneys belong; or

   (b)  (if the moneys are not directed to be invested in some other specified
        manner, and investment in a common fund is not inconsistent with the
        terms of the trust deed, will or instrument governing the moneys) as
        part of any common fund established and kept in the books of the
        company the investment in which is limited to such class or classes of
        investments as those moneys might lawfully be invested in on its
        separate account.



* * * * *



(5) Investments made from moneys forming part of a common fund shall not be
made on account of or belong to any particular estate, but the trustee company
shall cause to be kept in the books of the company an account showing at all
times the current amount at credit in a common fund on account of each estate.

(6) A trustee company may sell investments belonging to a common fund and may
withdraw any of the moneys belonging to a common fund for any purpose of or
relating to the exercise and discharge of its powers, authorities, duties or
functions.





(7) A trustee company may in its discretion at any time withdraw from a
common fund any amount at credit in a common fund on the account of any estate
and invest the amount on the separate account of that estate.

(8) Amounts so withdrawn from a common fund shall, as from the date of the
withdrawal, cease to have any claim for interest or otherwise from the
common fund.

(9) Any profits or losses upon realization of an investment in a common fund
shall be credited or debited (as the case requires) to the common fund and be
received or borne proportionately by the several amounts invested in the
common fund at the time of the realization.

(10) As on the first day of each month, the trustee company shall determine
the value of the investments in the common funds as on that day and, in
respect of securities listed on a prescribed financial market (as defined in
section 9 of the Corporations Act), the quotations published by that market
shall be prima facie evidence of value or, if there are no such quotations on
that day, the valuation of the chairperson or secretary of the market licensee
(as defined in section 761A of the Corporations Act) who is authorised to
operate that market shall be prima facie evidence of the value.

(11) Investments in or withdrawals from a common fund shall during a month be
effected on the basis of the valuation made on the day on which the amount is
invested or withdrawn or as on the first day of the month.





(12) The trustee company shall pay or allocate the income arising from a
common fund proportionately to or among the estates entitled to the income
arising from the capital sums invested in the common fund according to the
several sums so invested and the periods for which they remain so invested.

Penalty applying to this subsection: 15 penalty units.

(13) In addition to the commission, fees and remuneration which it is entitled
to receive under sections 21, 21A, 22 and 24, a trustee company shall be
entitled to charge and receive from or out of any income received by a
common fund, a fee (according to the value of the work done and the services
rendered) calculated at a rate not exceeding 1×1% per annum upon the capital
sums invested in the common fund during the period in respect of which the
income is received or allocated, for the establishment, keeping (including the
keeping of books of account) and conduct of the common fund.

(14) Subject to subsection (15), a right to participate or an interest in a
common fund of a trustee company is hereby declared to be an exempt right or
interest for the purposes of Division 6 of Part IV of the Companies (Victoria)
Code.

(15) Subsection (14) does not have any force or effect on or after 1 March
1985.