{"id":"F2019L00199","name":"Aboriginal and Torres Strait Islander Land and Sea Future Fund Investment Mandate Direction 2019","slug":"aboriginal-and-torres-strait-islander-land-and-sea-future-fund-investment-mandate-direction-2019","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":439934,"registerId":"F2019L00199-fast-fetch-1775955765545","compilationNumber":null,"startDate":"2026-04-12","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Aboriginal and Torres Strait Islander Land and Sea Future Fund Investment Mandate Direction 2019","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\n---\n\n?xml version=\"1.0\" encoding=\"utf-8\" standalone=\"no\"?>\n\n![Commonwealth Coat of Arms of Australia](image.001.jpeg)\n\n \n\nAboriginal and Torres Strait Islander Land and Sea Future Fund Investment Mandate Direction 2019\n\nWe, JOSHUA ANTHONY FRYDENBERG, Treasurer, and MATHIAS HUBERT PAUL CORMANN, Minister for Finance and the Public Service, give this Direction under section 32(1) of the Aboriginal and Torres Strait Islander Land and Sea Future Fund Act 2018.\n\nDated  19 February 2019  \n\nJOSHUA ANTHONY FRYDENBERG   MATHIAS HUBERT PAUL CORMANN\n\nTreasurer Minister for Finance and the Public Service\n\n \n\n \n\n \n\nContents\n\nPart 1 Preliminary\n\n1  Name\n\n2  Commencement\n\n3  Authority\n\n4  Definitions\n\nPart 2 Direction\n\n5  Object\n\n6  Benchmark return and acceptable level of risk\n\n7  Board must consider impacts from its investment strategy\n\n8  Corporate governance\n\n9  Reporting\n\n \n\n \n\nPart 1 Preliminary\n\n1  Name\n\n  This Direction is the Aboriginal and Torres Strait Islander Land and Sea Future Fund Investment Mandate Direction 2019.\n\n2  Commencement\n\n  This Direction commences on the 15th day after it is given to the Board.\n\nNote 1: Section 42 (disallowance) of the Legislation Act 2003 does not apply to the direction—see regulations made for the purposes of paragraph 44(2)(b) of that Act.\n\nNote 2: Part 4 of Chapter 3 (sunsetting) of the Legislation Act 2003 does not apply to the direction—see regulations made for the purposes of paragraph 54(2)(b) of that Act.\n\n3  Authority\n\n  This Direction is made under the Aboriginal and Torres Strait Islander Land and Sea Future Fund Act 2018.\n\n4  Definitions\n\n  In this Direction:\n\nAct means the Aboriginal and Torres Strait Islander Land and Sea Future Fund Act 2018.\n\nBoard means the Future Fund Board of Guardians established by section 34 of the Future Fund Act 2006.\n\nConsumer Price Index means the All Groups Consumer Price Index number, being the weighted average of the 8 capital cities, published by the Australian Bureau of Statistics.\n\nFund means the Aboriginal and Torres Strait Islander Land and Sea Future Fund established by the Act.\n\nFuture Fund Act means the Future Fund Act 2006.\n\nILSC means the Indigenous Land and Sea Corporation established by section 191A of the Aboriginal and Torres Strait Islander Act 2005.\n\nResponsible Ministers has the same meaning as in the Act.\n\n\n\n\nPart 2 Direction\n\n5  Object\n\n1.     The object of this Direction is to give guidance to the Board in relation to its investment strategy for the Fund.\n2.     The Board must seek to maximise the return earned on the Fund over the long term, consistent with international best practice for institutional investment, pursuant to section 33 of the Act, and subject to its obligations under the Act and any directions given by the Responsible Ministers under subsection 32(1) of the Act.             \n3.     This Direction is given under subsection 32(1) of the Act to articulate the Government’s expectations for how the Fund will be invested and managed by the Board. This sets out matters of risk and return for the Fund.\n\n\n6  Benchmark return and acceptable level of risk\n\n1.     The Board is to adopt an average return over the long term of at least the Consumer Price Index + 2.0 to + 3.0 per cent per annum, net of costs, as the benchmark return on the Fund.\n2.     During the initial transition period, as the Board develops a long-term strategic asset allocation, the Government anticipates a return lower than the benchmark return.\n\n\n  Acceptable level of risk\n\n1.     In constructing a portfolio, the Board:\n\n\n (a)  must determine an acceptable but not excessive level of risk for the Fund, including having regard to the plausible capital loss from investment returns over the forward three-year period; and\n\n (b)  must have regard to its obligations under section 17 of the Act.\n\n1.     The Government acknowledges that targeting the long-term benchmark return implies accepting the risk of capital losses, in adverse markets, that may be 15‑20 per cent of the portfolio over a three-year period.\n\n\n7  Board must consider impacts from its investment strategy\n\n1.     In undertaking its investment activities, the Board must act in a way that:\n\n\n (a)  minimises the potential to effect any abnormal change in the volatility or efficient operation of Australian financial markets; and\n\n (b)  is unlikely to cause any diminution of the Australian Government’s reputation in Australian and international financial markets.\n\n8  Corporate governance\n\n1.     The Board must have regard to international best practice for institutional investment in determining its approach to corporate governance principles, including in relation to its voting policy.\n\n\n9  Reporting\n\nThe Board must publish quarterly portfolio updates on its website showing:\n\n1.     actual returns against benchmark return; and\n2.     asset allocations by category.\n\n\n \n","sortOrder":0}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"flash_summary":{"complexity_score":4,"scope_assessment":{"changed":false,"description":"This Direction does not alter the statutory purpose or legal powers in the Act. It is a ministerial direction under section 32(1) that articulates government expectations on benchmarks, risk tolerance, governance and reporting for the Board’s management of the Fund, without amending who the Act governs or the Fund’s legal objects."},"complexity_factors":["Sets a quantitative but ranged benchmark (Consumer Price Index +2.0 to +3.0% p.a., net) that must be targeted over the long term (section 6.1).","Allows a lower return during an undefined 'initial transition period' (section 6.2), creating timing and calibration choices for the Board.","Requires the Board to determine an \"acceptable but not excessive\" level of risk and to consider plausible capital loss over the next three years—introducing model and scenario‑testing obligations and judgment (section 6: \"Acceptable level of risk\").","Government acknowledgement that adverse markets may imply 15–20% portfolio losses over three years creates an explicit downside tolerance that the Board must reconcile with fiduciary duties (section 6, final paragraph).","Directs the Board to minimise any abnormal impact on Australian financial market volatility and to avoid diminishing the Government’s reputation—both subjective standards that increase operational ambiguity (section 7).","Mandates regard to international best practice for corporate governance and voting policy, requiring policy development and potential external benchmarking (section 8).","Quarterly public reporting of actual returns versus benchmark and asset allocations imposes ongoing disclosure and data‑management obligations (section 9).","Cross‑references to the Act (must act pursuant to section 33 and have regard to section 17) enlarge the legal context and mean the Direction must be read with those statutory duties, increasing legal interpretive complexity (sections 5.2 and 6 Acceptable level of risk(a)(b)).","Notes that the Direction is given under the Act and that certain procedural checks (disallowance and sunsetting) do not apply on commencement, affecting reviewability and timetable (Commencement notes)."],"plain_english_summary":"This Direction tells the Future Fund Board of Guardians how to invest the Aboriginal and Torres Strait Islander Land and Sea Future Fund. It sets a long‑term benchmark return of CPI + 2.0–3.0% per year (net), allows lower returns during an initial transition, and explicitly accepts the possibility of 15–20% capital losses over adverse three‑year periods. The Board must set an acceptable risk level, avoid disrupting Australian markets or harming government reputation, follow international governance practice, and publish quarterly returns and asset allocations. Investment decisions and any losses affect the Fund’s value; the Board retains material discretion."},"kimi_summary":{"content_quality":"ok","complexity_score":3,"scope_assessment":{"changed":false,"description":"The Direction remains tightly focused on its original purpose: setting investment parameters for the Aboriginal and Torres Strait Islander Land and Sea Future Fund. It does not expand beyond articulating risk/return expectations, governance standards, and reporting requirements for the Board."},"complexity_factors":["Only 9 sections across 2 Parts, with minimal cross-referencing","7 defined terms in section 4, all straightforward (e.g., 'Act', 'Board', 'Fund')","Simple conditional structure: one main objective with subordinate requirements","No nested exceptions or complex procedural triggers","Clear numerical benchmarks (CPI + 2.0 to 3.0%, 15–20% risk tolerance) reduce interpretive ambiguity","Single-layer delegation: Ministers → Board, with no intermediate decision points"],"plain_english_summary":"This Direction tells the Future Fund Board how to invest the Aboriginal and Torres Strait Islander Land and Sea Future Fund: pursue strong long‑term returns (targeting inflation plus 2–3% after costs) using institutional best practice, accept bounded risk (acknowledging possible 15–20% falls over three years), safeguard market integrity and governance, and publish quarterly performance. It affects the Board, the ILSC (the Fund’s beneficiary) and, ultimately, Aboriginal and Torres Strait Islander communities by protecting and growing a perpetual funding source for land and sea management."}},"importantCases":[],"_links":{"self":"/api/acts/aboriginal-and-torres-strait-islander-land-and-sea-future-fund-investment-mandate-direction-2019","history":"/api/acts/aboriginal-and-torres-strait-islander-land-and-sea-future-fund-investment-mandate-direction-2019/history","analysis":"/api/acts/aboriginal-and-torres-strait-islander-land-and-sea-future-fund-investment-mandate-direction-2019/analysis","conflicts":"/api/acts/aboriginal-and-torres-strait-islander-land-and-sea-future-fund-investment-mandate-direction-2019/conflicts","importantCases":"/api/acts/aboriginal-and-torres-strait-islander-land-and-sea-future-fund-investment-mandate-direction-2019/important-cases","documents":"/api/acts/aboriginal-and-torres-strait-islander-land-and-sea-future-fund-investment-mandate-direction-2019/documents"}}