Life Insurance (prudential standard) determination No. 12 of 2010 - Prudential Standard LPS 700 Friendly Society Benefit Funds
Joint investments of approved benefit fuJoint investments of approved benefit funds
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Joint investments of approved benefit funds
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A friendly society may only invest assets of two or more approved benefit funds in a single “joint investment” if it does so in accordance with section 16H(4A) of the Act and paragraphs 19 to 24.
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In respect of a joint investment, a 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.
- In respect of a joint investment, a friendly society must ensure that:
(a) the investment is 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.
- In respect of a joint investment, a friendly society must allocate:
(a) the income received from the joint investment to the contributing funds equitably in accordance with their respective contributions; and
(b) any direct costs of redemption to the contributing funds in accordance with their respective contributions.
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In respect of a joint investment, subject to paragraphs 23 to 24, a 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 seven days, or at such other time as permitted by APRA.
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If a joint investment is an investment relating to unitised contracts, the friendly society must carry out the reconciliation referred to in paragraph 22 at least as frequently as the unit prices in relation to the relevant contract are quoted, but in any event, at least once every seven days or at such other time as permitted by APRA.
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In respect of a joint investment for which a friendly society conducts a mark to market exercise on a more frequent basis than once every seven days, the reconciliation referred to in paragraph 22 must be carried out at least as frequently as the mark to market exercise.