AustraliaI'm a trustee of a managed investment scheme. What are my legal duties?
As a trustee of a managed investment scheme in Australia, you owe strict statutory duties under the Corporations Act 2001, including acting honestly, exercising care and diligence, acting in the best interests of members, and complying with the scheme’s constitution and the law.
What the Law Says
The legal duties of a trustee of a managed investment scheme in Australia are set out primarily in the Corporations Act 2001 (Cth). These duties are mandatory, enforceable by ASIC, and apply regardless of any provision in the scheme’s constitution or trust deed.
Under section 601FC(1) of the Corporations Act 2001, a responsible entity (which acts as trustee for the scheme) must exercise the same degree of care and diligence as a reasonable person would exercise if they were a director of a company in the same circumstances.
Section 601FC(2) requires the responsible entity to act honestly and in the best interests of members — and, if the scheme’s constitution imposes additional duties, to also act in accordance with those duties.
Section 601FC(3) prohibits the responsible entity from making improper use of information or position obtained through its role, and from engaging in conduct that is misleading or deceptive in relation to the scheme.
Trustees must keep records for at least 7 years (s. 601FD), and failure to comply with core duties can attract penalties including fines up to $22,000 or imprisonment up to 15 years (s. 601FC(5)).
Statutory TextThe responsible entity must exercise the same degree of care and diligence as a reasonable person would exercise if they were a director of a company in the same circumstances.
— Corporations Act 2001, s. 601FC(1) — Duties of responsible entity
Statutory TextThe responsible entity must act honestly and in the best interests of members of the scheme.
— Corporations Act 2001, s. 601FC(2) — Duties of responsible entity
Statutory TextA person who is a responsible entity must not make improper use of information or position.
— Corporations Act 2001, s. 601FC(3) — Duties of responsible entity
Statutory TextA responsible entity must keep records of the scheme’s affairs for at least 7 years.
— Corporations Act 2001, s. 601FD — Record keeping
What to Do
Ensure your actions always prioritise the best interests of scheme members — not promoters, directors, or related parties.
Maintain accurate, up-to-date records for at least 7 years, including minutes, financial reports, and compliance documentation.
Obtain independent professional advice before making material decisions affecting the scheme.
Report breaches of duty to ASIC promptly under s. 601QB and take remedial action.
Review the scheme’s constitution and PDS regularly to ensure ongoing compliance with all obligations.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.