Future Fund Investment Mandate Direction 2024

The instrument defines and uses several core concepts that structure obligations on the Board. These definitions are located in s6 and affect how the Board must interpret its obligations.

• CPI: defined as the All Groups Consumer Price Index as published by the Australian Statistician (s6). The CPI is the reference series for the benchmark return (s10(1)).
• Energy transition: defined as a three-part objective , increasing use of renewable and low-emission sources; increasing capacity and efficiency of Australia’s energy infrastructure; and decreasing reliance on high emission energy sources, including by developing and improving technology to achieve that objective. The instrument explicitly notes the transition to net zero by 2050 may require use of medium emission energy sources during the transition (s6, energy transition and note). Energy transition is one of the national priorities the Board is to have regard to (s9(1)(a)).
• Net zero transformation: defined as reducing Australia’s net greenhouse gas emissions to zero by 2050 (s6).
• Infrastructure and economic resilience and security infrastructure: “infrastructure” is defined to include transport, energy, communication, water and “economic resilience and security infrastructure” (s6). Economic resilience and security infrastructure is itself defined as infrastructure for sectors where some domestic capability is necessary or efficient to improve resilience and security of the national economy, with an example emphasising support for domestic supply chains that are highly concentrated or vulnerable to disruption (s6).
• Residential housing: defined by reference to the A New Tax System (Goods and Services Tax) Act 1999’s meaning of “residential premises” (s6).
• Financial assets only: the instrument requires investments by the Fund to be “in financial assets only” (s7). The instrument also contains a note that expressions have the same meaning as in the Future Fund Act 2006 (s6, note referencing para 13(1)(b) of the Legislation Act 2003), meaning these terms must be read with the Act’s definitions where relevant.

Operationally important concepts beyond definitions:

• “Maximise the return earned on the Fund over the long term, consistent with international best practice for institutional investment” is the central financial objective (s8(1)). The instrument also imposes a specific benchmark return target (CPI +4 to +5 per cent p.a.) (s10(1)) and requires the Board to determine an “acceptable, but not excessive, level of risk” when targeting that benchmark (s10(2)).
• “Have regard to” national priorities (s9(1)) is a lower-threshold duty than a strict directive to invest in those priorities, but it is a mandatory element of the Board’s decision-making process.
• Limits on holdings in companies “to which section 21 or 84C of the Act applies” require the Board to adopt a holdings-limit policy, but do not prescribe numeric limits (s11).
• Qualitative duties to minimise potential abnormal market volatility and to avoid negative reputational impact on the Government are placed on the Board’s investment strategy choice (s12).
• Corporate governance duties require the Board to “have regard to international best practice” when determining its corporate governance approach, including voting policy (s13).

These main concepts create a structure of objectives, benchmarks and qualitative constraints that the Board must synthesise when forming investment strategy. Many of the concepts depend on definitions or standards that originate in other instruments or the Act, because the instrument explicitly aligns expressions with the Future Fund Act 2006 (s6, note).

Primary decision-maker and immediate duty-bearer

• The Board of Guardians of the Future Fund (referred to throughout as “the Board”) is the primary addressee required to act in accordance with the instrument’s directions. The instrument repeatedly frames duties “in performing its Future Fund investment functions, the Board must…”, or “the Board is to have regard to…”, thereby placing the decision-making and compliance obligation squarely with the Board (s8(1), s9(1), s10(1), s12, s13).

Government offices and ministers

• The Treasurer and the Minister for Finance are the creators of the instrument and the authority behind it; they make the direction under the Future Fund Act (cover page; s3). The instrument does not specify ongoing ministerial oversight mechanisms beyond its issuance, but the statutory power referenced (s18 of the Act, noted in s3) is the statutory channel for such directions.

Beneficiaries and public stakeholders

• The Future Fund itself and, by extension, beneficiaries of the Government’s budgetary commitments that the Fund supports may be affected in the sense that the Fund’s investment strategy and performance will be shaped by this instrument (s5). The objects state the instrument sets guidance and expectations on how the Fund will be invested and managed (s5).

Market participants and counterparties

• Markets and counterparties will be affected indirectly by the Board’s changed or clarified mandate, particularly in relation to the Board’s obligations to minimise market disruption and consider reputational impacts (s12). The requirement to limit holdings in companies identified under ss 21 and 84C of the Act (s11) will shape the Board’s equity positions in those categories of company.

Sectors named in the national priorities

• The instrument specifically directs the Board to have regard to three national priorities: supporting an energy transition as part of net zero transformation; increasing the supply of residential housing in Australia; and delivering improved infrastructure located in Australia (s9(1)(a)-(c)). The Board’s awareness obligation can shift investment flows toward asset classes or projects in these sectors, subject to the Board’s mandated financial-return objective (s8, s10).

Regulatory and statutory interfaces

• The instrument expressly ties its terms to the Future Fund Act 2006 and to the Legislation Act 2003 for expression meanings (s3, s6 note). Parties that interact with the Board will therefore have to consider how the instrument’s directions align with the statutory framework in the Act.

Other affected government policy settings

• Because the instrument asks the Board to have regard to national priorities including energy transition and housing supply (s9), other arms of government implementing policy in these areas should expect the Board to situate its investment choices in a policy environment shaped by those priorities. The instrument does not create obligations for other agencies; it instructs the Board.

In sum, the instrument directly binds the Board and influences the Future Fund’s portfolio decisions, and indirectly affects market participants, sectors identified as priorities, and public stakeholders whose interests are served by the Fund. The practical effect on any particular third party depends on how the Board exercises the discretion the instrument leaves to it, including definitions and policies the Board must develop (for example, holdings limits in s11).

Duties imposed on the Board

• Investments restricted to financial assets only: The Board must ensure that investments by the Fund are “in financial assets only” (s7). The instrument aligns expressions with the Future Fund Act (s6 note), so the scope of “financial assets” is a legal question tied to the Act’s terminology.
• Duty to maximise long-term return consistent with international best practice: The Board “must seek to maximise the return earned on the Fund over the long term, consistent with international best practice for institutional investment” (s8(1)). This is the principal financial objective the instrument imposes.
• Duty to have regard to national priorities: The Board “is to have regard to” the three specified national priorities when performing its investment functions (s9(1)). The phrasing is a duty to consider those priorities in decision-making, rather than a prescriptive duty to achieve them.
• Benchmark target and risk calibration: The Board “must seek to achieve an average return of at least the CPI +4 to +5 per cent per annum over the long term as the benchmark rate of return for the Fund” (s10(1)). When targeting this benchmark, the Board “must determine an acceptable, but not excessive, level of risk for the Fund measured in terms such as the probability of losses occurring in a particular year” (s10(2)). This requires the Board to set a quantified benchmark and to document or otherwise determine a risk tolerance around that benchmark.
• Holdings limits policy: The Board “must establish a policy which provides a limit on the holdings that the Fund may have in any company to which section 21 or 84C of the Act applies” (s11). The instrument requires a policy but leaves the substance of the limits to the Board.
• Market impact and reputational considerations: The Board must act in a way that minimises the potential of causing any abnormal change to the volatility or efficient operation of Australia’s financial markets and be unlikely to have a negative impact on the Government’s reputation in Australian and international financial markets (s12).
• Corporate governance standards: The Board “must have regard to international best practice for institutional investment” when determining its approach to corporate governance principles, including its voting policy (s13).

Interplay and priority rules in the instrument

• The instrument contains express inconsistency carve-outs that affect how duties interact. Section 8(2) qualifies the maximisation duty, providing that s8(1) “does not apply to the extent” the Board would be required to act inconsistently with the Act or any other provision of the instrument (other than s9). Notably, that carve-out expressly excludes s9 from the list of provisions that can make s8(1) inapplicable, which affects the relationship between the maximisation duty and the national priorities duty.
• Section 9(2) contains a separate qualification: the Board’s duty to have regard to national priorities “does not apply to the extent” it would be required to act inconsistently with the Act or any other provision of the instrument. Because s9(2) does not exclude s8 from the list, s9 can be displaced where inconsistent with s8 or other provisions. These cross-references create a textual hierarchy that the Board must interpret and apply in practice.

Rights and omissions

• The instrument does not confer private rights or entitlements on third parties. It instructs the Board about the approach to investment functions; it does not create compensatory or enforcement rights for external parties in the text provided.
• The instrument contains no express enforcement powers, penalty provisions, or appeal mechanisms (see “Penalties and enforcement” below). Any remedies or enforcement measures would exist, if at all, in the underlying statute (the Future Fund Act 2006) rather than in this instrument itself (s3 note).

Record-keeping, reporting or administrative duties

• The instrument requires the Board to “establish a policy” in relation to holdings limits (s11) and to “determine” a risk level (s10(2)), and to have regard to particular priorities and corporate governance standards (ss 9, 13). While the instrument does not specify reporting or record-keeping requirements, these actions imply governance, policy documentation and decision-recording activity by the Board in order to demonstrate compliance.

In short, the instrument imposes a layered set of obligations on the Board: a primary financial maximisation objective, a benchmark and risk calibration duty, a requirement to have regard to named national priorities, governance and holdings-policy duties, and qualitative obligations to limit market disruption and reputational risk. The instrument provides material discretion to the Board about how to satisfy these duties, but also contains textual rules affecting how those duties interact.

Textual absence of penalties in the instrument

• The Future Fund Investment Mandate Direction 2024 itself contains no penalty provisions, civil sanctions, criminal offences or express enforcement mechanisms. The instrument sets duties and policy obligations but does not specify a mechanism for sanctioning breach of those duties within its own text.

Relationship to the Future Fund Act 2006

• The instrument is made under the Future Fund Act 2006 (s3). The instrument’s note references section 18 of the Act as the statutory source under which responsible Ministers may give written directions to the Board to constitute the Future Fund Investment Mandate (s3, note). Any enforcement, compliance or review powers, or consequences for failing to follow a Ministerial direction, would therefore be sourced in the statutory framework of the Future Fund Act rather than in this instrument’s text. The instrument itself does not reproduce or restate any such enforcement regime.

Practical enforcement pathway implications

• Because the instrument imposes obligations on the Board and leaves operational detail to the Board (for example, the holdings limit policy in s11, and the Board’s determination of an acceptable risk level in s10(2)), oversight in practice likely takes the form of ministerial scrutiny, parliamentary oversight or statutory governance mechanisms embedded in the Act and related governance instruments. Those governance and oversight modalities are not elaborated in the instrument itself.
• The instrument’s obligations are framed as mandatory duties of the Board (“must” and “is to”), which creates a normative expectation of compliance. But absent internal sanctioning language here, the immediate legal consequence of non-compliance is not stated in the instrument. Practitioners will need to consult the Future Fund Act 2006 for express remedies, reporting obligations and ministerial or statutory enforcement powers.

Reputational and market consequences as implicit enforcement

• The instrument itself contains qualitative obligations to avoid causing abnormal market volatility and to avoid negative impacts on the Government’s reputation (s12). Failure to meet those obligations may lead to governance and political consequences for the Board and Ministers, including criticism in Parliament or the press, which operate as non-statutory enforcement pressures. Those reputational channels are not legal penalties within the instrument, but they can be consequential in practice.

Record and policy obligations as compliance tools

• Several clauses require the Board to create policies or determine parameters (s10(2), s11). These requirements create administrative obligations that allow for ex post review: a holdings-limit policy and a documented risk tolerance provide a basis for monitoring and oversight. The instrument does not prescribe particular reporting formats or timetables.

In summary, the instrument prescribes duties but contains no internal penalty or enforcement rules. Enforcement, remedies and any sanctions are matters to be found in the Future Fund Act 2006 and related governance arrangements, which a practitioner must consult to understand legal consequences of non-compliance. The instrument does, however, create administrative duties that are capable of being reviewed by stakeholders and political overseers.

Primary statutory anchor: Future Fund Act 2006

• The instrument is expressly made under the Future Fund Act 2006 (s3). It also notes that expressions have the same meaning as in the Future Fund Act 2006 “as in force from time to time” (s6 note, referencing para 13(1)(b) of the Legislation Act 2003). That means that the interpretative scope of terms like “financial assets” and any other terms defined in the Act depend on the Act’s text and on subsequent amendments to the Act.
• Specific cross-references to sections of the Act shape duties in the instrument. For example, s11 requires the Board to adopt a holdings-limit policy for companies “to which section 21 or 84C of the Act applies.” Understanding which companies are captured by that duty requires consulting ss 21 and 84C of the Future Fund Act.

Inconsistency rules within the instrument

• The instrument contains built-in rules about when particular obligations do not apply because of inconsistency with the Act or other provisions of the instrument. Section 8(2) states that the maximisation duty in s8(1) “does not apply to the extent” the Board would be required to act inconsistently with the Act or any other provision of this instrument (other than s9). Section 9(2) similarly states that the “have regard to” duty in s9(1) does not apply to the extent inconsistent with the Act or any other provision of the instrument. These textual qualifications mean the instrument is designed to be read in combination with the Act and that the Act has primacy on any point of conflict. The carve-out in s8(2) excluding s9 from the types of provisions that can make s8(1) inapplicable affects how the two key duties are reconciled (see analysis under Key duties and Gotchas).

Reference to the Legislation Act 2003

• The instrument contains a note that expressions have the same meaning in this instrument as in the Future Fund Act 2006 “as in force from time to time” and cites paragraph 13(1)(b) of the Legislation Act 2003 (s6 note). That means interpretation of defined terms in this instrument will track statutory definitions and any changes to them, as governed by the Legislation Act.

Implications for related regulatory regimes

• The instrument requires investments to be “in financial assets only” (s7). The precise scope of permitted investments may intersect with other legal regimes that regulate particular asset classes (for example, real property law, foreign investment controls, corporations law and securities law). The instrument itself does not elaborate those intersections; to understand compliance obligations arising under other laws, practitioners must consult the relevant statutes and regulations alongside the Act.
• The national priorities (s9) include infrastructure located in Australia and increased supply of residential housing in Australia. Investment activity by the Board that targets onshore infrastructure or residential projects may interact practically with Commonwealth and State planning, taxation, and regulatory regimes, but those interfaces are not described in this instrument.

Repeal and replacement of previous direction

• The Schedule repeals the Future Fund Investment Mandate Direction 2017 in full (Schedule 1). That is an express legislative interaction: the 2024 direction supplants the 2017 instrument and thereby alters the regulatory framework the Board must follow from its effective commencement date (s2, Schedule 1).

In short, the instrument is designed to be read and applied within the statutory architecture of the Future Fund Act and relevant interpretative provisions in the Legislation Act. Its obligations must be reconciled with the Act and with any other statutory obligations that constrain the Board’s investment choices, and some specific duties hinge on other sections of the Act (notably ss 21 and 84C) that are not reproduced in this instrument.

Text of amendment history in this instrument

• The instrument itself contains a Schedule that repeals the whole of the Future Fund Investment Mandate Direction 2017 (Schedule 1). There are no other amendments recorded in the text provided. The commencement table (s2) indicates how the instrument commences, but does not purport to amend any other instruments except through the Schedule’s repeal of the 2017 direction.

Commissioning and date

• The instrument is dated 19 November 2024 and signed by the Treasurer and the Minister for Finance (cover page; signatures). The commencement provision (s2(1)) specifies the date mechanism: the later of the 15th day after the instrument is made and the day after the instrument is registered is the operative commencement rule; thus the instrument’s practical effect begins only after those administrative steps occur.

No additional amendments or transitional provisions

• The instrument contains no transitional provisions, savings clauses, retrospective amendments or staged implementation steps beyond the commencement mechanics in s2. It does not preserve or vary any ongoing policies from the 2017 direction; instead it repeals that prior direction in full (Schedule 1). Any transitional arrangements that might be relevant to holdings, policy documents, or governance practice must be managed administratively by the Board and under the Act, because the instrument does not itself prescribe transitional mechanics.

Implication for prior policies and practices

• Repeal of the 2017 direction (Schedule 1) means the Board’s obligations and policy framework will be governed by the 2024 direction from its commencement date forward. The instrument does not specify whether or how existing policies adopted under the 2017 direction are to be adapted; the Board will need to review and, where necessary, replace policies to satisfy the new direction’s requirements (for example, establishing a holdings-limit policy under s11 and documenting its benchmark and risk tolerance under s10).

No recorded subsequent amendments in the instrument text

• The text supplied contains no recorded subsequent amendments to the 2024 instrument itself. Any later amendments to the instrument would be recorded in a later amending instrument, which is not included here.

Practitioner note

• Because the instrument ties definitions to the Future Fund Act “as in force from time to time” (s6 note), later changes to the Act that alter defined terms will affect how this instrument is read without amendment to the instrument itself. Practitioners must monitor statutory amendment to the Act for indirect effects on this instrument’s operation.

No litigation or judicial interpretation recorded in this instrument

• The instrument does not reference any litigation, judicial decisions or precedent concerning its interpretation or application. The text supplied contains no recitals or notes describing court proceedings or legal challenges.

Implication for legal certainty

• With no litigation history included in the instrument, the clauses and their interplay (for example, the relationship between the maximisation duty in s8 and the national priorities duty in s9, and the operational meaning of “financial assets only” in s7) will be matters of statutory and instrumental interpretation if they are ever litigated. Until courts have considered these provisions, parties must rely on the plain text, the instrument’s internal inconsistency rules (ss 8(2), 9(2)), and the statutory framework under the Future Fund Act for guidance.

Potential avenues for dispute (textual features that could prompt legal argument)

• Conflicts of duties: The instrument creates potential interpretative questions about the practical reconciliation of s8 (maximise return) and s9 (have regard to national priorities), which the instrument itself addresses through carve-outs. Litigation could arise if stakeholders contest how the Board operationalises those duties in a particular investment decision.
• Scope of “financial assets only”: Section 7’s restriction could give rise to legal argument about whether a given instrument, arrangement or holding is a “financial asset” within the meaning carried over from the Act.
• Holdings limits tied to ss 21 and 84C of the Act: Any disagreement over whether a company falls within those sections of the Act or whether the Board’s holdings-limit policy is compliant could prompt legal challenge.

No recorded cases named in the instrument

• The instrument names no judicial authorities nor does it refer to decided cases. If litigation occurs, practitioners will need to consider the Future Fund Act’s enforcement framework and the general law, but those sources are outside the text of this instrument.

Priority and inconsistency drafting that affects operational hierarchy

• The instrument’s internal inconsistency rules are a crucial drafting feature that practitioners must note. Section 8(2) limits the circumstances in which the maximisation duty in s8(1) does not apply: it “does not apply to the extent” that complying with that duty would require acting inconsistently with the Act or any other provision of this instrument (other than s9). The parenthetical “other than section 9” means that s8(1) is not rendered inapplicable by inconsistency with s9, i.e. s9 is not a listed provision that can displace s8 under s8(2). By contrast, s9(2) says the duty to “have regard to” national priorities does not apply to the extent it would be inconsistent with the Act or any other provision of this instrument (with no exclusion). The practical drafting consequence is that s8 has a textual primacy over s9 in cases of conflict. Practitioners should not assume the duties in s8 and s9 sit on equal footing; the instrument’s language assigns a structural priority to the maximisation objective when tensions arise.
• Practical effect: when the Board’s pursuit of maximising long-term return appears in tension with the obligation to have regard to national priorities, the instrument’s text leaves the maximisation duty functionally superior (s8(2) carve-out). That hierarchy is a factual risk in portfolio decisions that touch the national priority sectors.

Ambiguity in “financial assets only”

• Section 7 is short and categorical: “Investments by the Fund must be in financial assets only.” The instrument ties definitions to the Future Fund Act (s6 note), but without reproducing the Act’s definitions this instrument leaves practitioners dependent on the Act for the boundary of permissible investments. That boundary will matter for any potential direct ownership of real assets, project-level equity in infrastructure, direct property holdings, GP stakes, structured investments, or other hybrid arrangements. The Board will need to interpret the Act’s definitions and may need legal advice to classify complex instruments.

Benchmark range and measuring “long term”

• Section 10 sets a benchmark target of CPI +4 to +5 per cent per annum “over the long term” and requires the Board to determine an acceptable level of risk “measured in terms such as the probability of losses occurring in a particular year” (s10(1)-(2). Two points matter: (1) the benchmark is a band rather than a single point, which implies discretion in target selection; and (2) “over the long term” is not numerically defined in the instrument, creating potential for differing interpretations of performance measurement periods. The Board must operationalise these concepts and document the choices. Those choices will affect performance assessment and potential political scrutiny.

Holdings limits tied to sections of the Act without numeric guidance

• Section 11 obliges the Board to establish a policy limiting holdings in companies to which ss 21 or 84C of the Act apply. The instrument does not prescribe numerical thresholds or policy design details. The Board has substantive discretion in how to design limits, while being required to produce a policy document. The practical “gotcha” is that the Board bears the policy design risk and the oversight burden without a statutory safe harbour for the chosen numerical thresholds.

Qualitative market-impact and reputational duties are open-textured

• Section 12 imposes duties to minimise the potential of causing abnormal market volatility and to avoid negative reputational impacts on Government. These are inherently qualitative and fact-dependent standards. The Board will need to exercise judgment in translating these statements into operational limits and execution practices. The instrument does not specify how to measure “abnormal change” or “unlikely to have a negative impact,” so the Board’s internal policies and documentation will be key in demonstrating compliance.

Energy transition and net zero language contains an express allowance for medium-emission sources

• The definition of energy transition includes a note that achieving net zero by 2050 “may require the use of medium emission energy sources” during the transition (s6 note under energy transition). That phrase opens a potential policy space for investments supporting transitional fuels or technologies; however, the instrument does not define “medium emission” or set constraints on such investments. This is a drafting nuance that permits the Board discretion to consider transitional energy-related investments, but demands careful documentation of rationale.

Administrative and evidentiary expectations without procedural detail

• The instrument requires policies and determinations (s10(2), s11) but imposes no reporting mechanics within the instrument text. Boards should expect that complying with these duties will require formal policy documents and records for oversight, even though the instrument itself does not mandate their publication or format.

Replaced instrument and no transitional guidance

• The wholesale repeal of the 2017 direction (Schedule 1) means the Board must align with the 2024 direction going forward. The instrument does not provide transitional arrangements for previously committed investments or in-flight mandates. Practitioners should plan for a policy and compliance project to align legacy practices with the new direction.

In sum, the “gotchas” are textual priorities that affect duty reconciliation, open-ended definitional dependence on the Act, qualitative standards requiring policy translation, and administrative gaps that the Board must fill to operationalise the instrument’s mandates.

Practical steps the Board should take, grounded in the instrument’s text

1. Confirm the instrument’s commencement and legal basis

• Note the instrument date and apply the commencement rule in s2(1) (the later of the 15th day after the instrument is made and the day after registration). Ensure legal advisors confirm the operative commencement date and supply that date to governance and investment teams.
• Record the statutory basis under the Future Fund Act 2006 (s3) and confirm internal legal interpretation will align terms used in the instrument with definitions in the Act (s6 note).

2. Document investment universe: interpret “financial assets only” (s7)

• Work with counsel to identify the universe of permitted instruments by reference to the Future Fund Act’s definitions. Prepare a written legal opinion and an internal policy that lists permitted instruments and structures, and addresses edge cases (for example, direct project equity versus securities interests).
• Maintain a register mapping holdings to the permitted asset classes to demonstrate compliance.

3. Implement the maximisation duty consistently with the instrument’s hierarchy (s8)

• Draft a high-level policy that sets out how the Board interprets “maximise the return earned on the Fund over the long term, consistent with international best practice for institutional investment” (s8(1)). That policy should state how “international best practice” will be identified and applied.
• Capture the Board’s approach to reconciling s8 with s9 and other provisions, explaining the legal rationale given the textual carve-outs in s8(2) and s9(2). Explicitly document where s8 is treated as having structural priority in conflicts with s9.

4. Set and publish (or internally document) the benchmark and risk tolerance (s10)

• Decide whether the Board will target CPI +4, CPI +5, or some point within the band, and document the reasons for that choice with reference to investment strategy.
• Define “over the long term” for performance measurement purposes, specifying the measurement horizon (for example, 5, 10, 20 years), and document the methodology for calculating average returns against the CPI series specified (s6; s10(1)).
• Determine and record an “acceptable, but not excessive, level of risk,” including the metrics to be used (for example, probability of annual losses, value-at-risk, stress-test scenarios), as required by s10(2). Ensure the Board votes to adopt the risk tolerance and keep formal minutes.

5. Establish the holdings-limit policy required by s11

• Identify the scope of companies to which ss 21 and 84C of the Act apply by consulting those sections of the Act and seek legal advice on borderline cases.
• Draft and adopt a holdings-limit policy that specifies the types of limits (numeric percentage limits by company, veto thresholds, escalation procedures) and the governance approval process for exceptions.
• Keep the holdings-limit policy under active review and link it to the Board’s voting and stewardship policies.

6. Translate qualitative duties into operational constraints (s12, s13)

• For s12 (market impact and reputational considerations), prepare an execution policy that sets out limits on transaction size, disclosure practices, communication protocols with market participants and the Government, and escalation steps if market impact is observed.
• For s13 (corporate governance), adopt a voting and engagement policy aligned with “international best practice.” Document how the Board will apply stewardship principles, proxy-voting guidelines and escalation frameworks.

7. Integrate national priorities into investment decision frameworks (s9)

• Although s9 requires the Board to “have regard to” national priorities rather than to prioritise them over return, integrate assessment of energy transition, residential housing supply and Australia-located infrastructure into investment due diligence templates and strategic asset allocation discussions.
• Develop criteria and metrics to record how each investment decision considered the national priorities, thereby creating an audit trail that evidences compliance with s9(1).

8. Governance, documentation and reporting

• Adopt formal Board resolutions that ratify the policies required by the instrument (benchmark selection and risk tolerance, holdings-limit policy, corporate governance and voting policy, market-impact and reputational policy).
• Maintain an internal compliance register that maps each duty in the instrument to specific policies, owners, review cadences and evidence of implementation.
• While the instrument does not prescribe external reporting, consider publishing a summary of policies and how the instrument’s priorities are being met to provide transparency to stakeholders and to reduce reputational risk.

9. Operationalise energy transition allowances and housing/infrastructure initiatives

• For investments linked to the energy transition, document how the Board will interpret the instrument’s note that medium-emission sources may be used during the transition (s6). Establish criteria for assessing transition-related investments, including emissions baselines, transition plans and technology-readiness assessments.
• For housing and infrastructure investments, ensure legal teams coordinate with cross-jurisdictional regulatory requirements and tax considerations. Document how onshore infrastructure investments align with the instrument’s definition of “infrastructure.”

10. Monitor and review

• Set an ongoing review process to reassess policies against outcomes and to ensure new statutory developments in the Future Fund Act or other relevant legislation are reflected (s6 note regarding meaning “as in force from time to time”).
• Keep minutes of Board deliberations that show how the Board reconciled the instrument’s duties , particularly where trade-offs between return maximisation and national priorities were considered.

Checklist summary (immediate actions)

• Confirm commencement date (s2).
• Obtain legal opinion on scope of “financial assets” (s7; s6 note).
• Adopt benchmark and risk tolerance with documented methodology (s10).
• Draft and adopt holdings-limit policy for companies covered by ss 21 and 84C of the Act (s11).
• Adopt market impact and reputational policy (s12).
• Adopt corporate governance and voting policy aligned with international best practice (s13).
• Integrate national priorities into investment decision templates and record consideration (s9).
• Keep governance records and be ready to produce policy documents to oversight bodies if requested.

Following these steps will create the administrative and policy evidence the Board needs to demonstrate it has complied with the instrument’s mandatory formulations while retaining the flexibility the instrument affords in operational detail.