{"id":"F2015L01817","name":"Medical Research Future Fund Investment Mandate Direction 2015","slug":"medical-research-future-fund-investment-mandate-direction-2015","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":93595,"registerId":"commonwealth-F2015L01817-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Medical Research Future Fund Investment Mandate Direction 2015","content":"![](image.001.png)\n\nMedical Research Future Fund\n\nInvestment Mandate Direction 2015\n\nWe, SCOTT JOHN MORRISON, Treasurer, and MATHIAS HUBERT PAUL CORMANN, Minister for Finance, give this Direction under subsection 39(1) of the Medical Research Future Fund Act 2015.\n\nDated 8 - 11 - 2015\n\nSCOTT JOHN MORRISON MATHIAS HUBERT PAUL CORMANN\n\nTreasurer Minister for Finance\n\nPart 1 Preliminary\n\n1. Name of Direction\n\nThis Direction is the Medical Research Future Fund Investment Mandate Direction 2015.\n\n2. Commencement\n\nThis Direction commences on the 15th day after it is given.\n\nNote: Section 42 of the Legislative Instruments Act 2003 (which deals with the disallowance of legislative instruments) does not apply to this instrument: see section 44 of that Act. Part 6 of that Act (which deals with the sunsetting of legislative instruments) does not apply to this instrument: see section 54 of that Act.\n\n3. Definitions\n\nIn this Direction:\n\nAct means the Medical Research Future Fund Act 2015.\n\nBoard means the Future Fund Board of Guardians.\n\nFund means the Medical Research Future Fund.\n\nresponsible Ministers has the same meaning as in the Act.\n\n4. Object of this Direction\n\nThe Fund has been established to provide grants of financial assistance to support medical research and medical innovation over the long term.\n\nThe object of this Direction is to give guidance to the Board in relation to its investment strategy for the Fund. The Board is required under section 40 of the Act to:\n\n    seek to maximise the return earned on the Fund over the long term, consistent with international best practice for institutional investment; and\n    to enhance the commonwealth’s ability to provide grants of financial assistance to support medical research and innovation,\n\nsubject to its obligations under the Act and any directions given by the responsible Ministers under the Act.\n\nThis Direction is given under subsection 39(1) of the Act to articulate the Government’s expectations for how the Fund will be invested and managed by the Board.\n\nPart 2 Direction\n\n5. Benchmark return\n\n    The Board is to adopt an average return of at least the Reserve Bank of Australia Cash Rate target + 1.5 to 2.0 per cent per annum, net of investment fees, over a rolling 10 year term as the benchmark return on the Fund.\n\nIn targeting the benchmark return, the Board must determine an acceptable but not excessive level of risk for the Fund measured in terms such as the probability of losses in a particular year. In determining the level of risk, the Board must take into account:\n\n    the principle that the nominal value of the credits to the Fund be preserved over the long term; and\n    the principle to moderate the volatility of the maximum annual distribution.\n\n6. Board must consider impacts from its investment strategy\n\nIn undertaking its investment activities, the Board must act in a way that:\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\n7. Corporate Governance\n\nThe 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.","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"},"kimi_summary":{"content_quality":"ok","complexity_score":3,"scope_assessment":{"changed":false,"description":"The Direction remains tightly focused on its original purpose: providing investment guidance for the MRFF. It establishes the benchmark return target, risk parameters, and governance expectations without expanding into unrelated policy areas. The scope is appropriately limited to the mechanics of fund management."},"complexity_factors":["Very short document (only 7 sections)","Minimal defined terms (only 4 definitions in section 3)","No cross-references to other legislation beyond the parent Act","Simple conditional structure (single-level obligations without nested exceptions)","Clear performance benchmark (RBA cash rate + 1.5-2%)","Broad principles-based approach rather than prescriptive rules","No sunset clauses or complex temporal provisions"],"plain_english_summary":"The Direction sets the investment rulebook for the $20bn Medical Research Future Fund, instructing the Future Fund Board to pursue long‑term returns of RBA cash rate plus 1.5–2% (measured over 10 years) while preserving the Fund’s nominal value, smoothing distributions, and avoiding reckless risk or market disruption. It binds the Board to international governance and stewardship standards. Its outcome determines whether taxpayers’ capital sustainably funds future medical research."},"flash_summary":{"complexity_score":3,"scope_assessment":{"changed":false,"description":"This Direction does not alter the Fund’s statutory purpose. It articulates the Government’s expectations for investment strategy and management consistent with the Act’s requirement that the Board maximise long‑term returns and support grant‑making (s4). It adds binding performance and risk guidance (benchmark, risk principle, market/reputation constraints and corporate‑governance guidance) but operates under the Act and any ministerial directions (s4; s5; s6; s7)."},"complexity_factors":["Specified benchmark return is precise but expressed as a band and net of fees, creating implementation choices about target within range and fee treatment (s5).","Performance measurement over a rolling 10‑year term requires long‑horizon modelling and choice of averaging/statistics (s5).","Obligation to determine an “acceptable but not excessive” risk level is subjective and requires selecting risk metrics (eg probability of annual losses) and thresholds (s5).","Principles to preserve nominal credits and moderate maximum annual distribution volatility impose trade‑offs between return and downside protection (s5).","Requirements to minimise abnormal market volatility and avoid diminishing government reputation are qualitative constraints that may affect asset allocation and trading limits (s6).","Corporate governance duty to ‘have regard to international best practice’ is high-level guidance, leaving the Board discretion to define specific voting and stewardship policies (s7).","Direction sits within the Act and is subject to ministerial directions and the Board’s statutory obligations, so interaction with other statutory duties and directions must be managed (definition of Act; s4; instrument preamble).","Commencement and instrument status notes remove ordinary disallowance/sunsetting pathways, affecting parliamentary oversight mechanics (commencement note referencing Legislative Instruments Act)."],"plain_english_summary":"This Direction tells the Future Fund Board how to invest the Medical Research Future Fund so the Fund can support medical research grants over the long term. It sets a performance target (RBA cash rate + 1.5–2.0% per year, net of fees, measured over a rolling 10 years) and requires the Board to preserve the Fund’s nominal value, control risk and volatility, avoid disrupting markets or harming government reputation, and follow international corporate governance standards."}},"importantCases":[],"_links":{"self":"/api/acts/medical-research-future-fund-investment-mandate-direction-2015","history":"/api/acts/medical-research-future-fund-investment-mandate-direction-2015/history","analysis":"/api/acts/medical-research-future-fund-investment-mandate-direction-2015/analysis","conflicts":"/api/acts/medical-research-future-fund-investment-mandate-direction-2015/conflicts","importantCases":"/api/acts/medical-research-future-fund-investment-mandate-direction-2015/important-cases","documents":"/api/acts/medical-research-future-fund-investment-mandate-direction-2015/documents"}}