Document ID: chunk:federal_register_of_legislation:F2023C01018:reg:6:p6
Version: federal_register_of_legislation:F2023C01018
Segment Type: reg
Provision Reference: reg 6 (pt 6/15)
Character Range: 43586–46449

responsible entities are subject to, and comply with, the following duties:
 (a) to exercise the responsible entity's powers and discharge the responsible entity's duties with the degree of care and diligence that a reasonable individual would exercise if they were a responsible entity of the registered entity;
 (b) to act in good faith in the registered entity's best interests, and to further the purposes of the registered entity;
 (c) not to misuse the responsible entity's position;
 (d) not to misuse information obtained in the performance of the responsible entity's duties as a responsible entity of the registered entity;
 (e) to disclose perceived or actual material conflicts of interest of the responsible entity;
Note: A perceived or actual material conflict of interest that must be disclosed includes a related party transaction.
 (f) to ensure that the registered entity's financial affairs are managed in a responsible manner;
 (g) not to allow the registered entity to operate while insolvent.
Note 1: Governance standard 5 sets out some of the more significant duties of responsible entities. Other duties are imposed by other Australian laws, including the principles and rules of the common law and equity.
Note 2: Some of the duties imposed by other Australian laws may require a responsible entity to exercise its powers and discharge its duties to a higher standard.
Note 3: For the purposes of paragraph (f), ensuring that the registered entity's financial affairs are managed in a responsible manner includes putting in place appropriate and tailored financial systems and procedures.
 The systems and procedures for a particular registered entity should be developed having regard to the registered entity's size and circumstances and the complexity of its financial affairs.
 The systems and procedures may include:
(a) procedures relating to spending funds (for example, the approval of expenditure or the signing of cheques); and
(b) having insurance that is appropriate for the registered entity's requirements.
 (3) For the purposes of paragraph (2)(e), a perceived or actual material conflict of interest must be disclosed:
 (a) if the responsible entity is a director of the registered entity—to the other directors (if any); or
 (b) if the registered entity is a trust, and the responsible entity is a director of a trustee of the registered entity—to the other directors (if any); or
 (c) if the registered entity is a company—to the members of the registered entity; or
 (d) in any other case—unless the Commissioner provides otherwise, to the Commissioner, in the approved form.
Note 1: Company is defined in section 205‑10 of the Act to include a body corporate or any unincorporated association or body of persons (but not a partnership).
Note 2: Paragraph (c) applies in situations where paragraph (a) cannot apply, for