Collective investment schemes: Internal schemes
INTERNAL Schemes are Unit Trusts that are wholly or mainly operated in Zimbabwe in line with the provisions of the underlying Trust Deed. A Trust Deed is a written agreement between the Manager and the Trustee constituting the Scheme outlining the terms and conditions of the Scheme’s property. The provisions of the Trust Deed are binding on the Scheme Manager, Trustee and participants. In terms of Section 11(1) of the Collective Investment Schemes Act (Chapter 24: 19), the Trust Deed shall be executed in Zimbabwe by the Scheme’s Manager and Trustee or proposed Manager and proposed Trustee.
The Manager of the Scheme is responsible for the management and control of the day to day operations of the Scheme on behalf of the participants. The main objective of the Manager is to administer the Scheme’s investments in the best interest of investors / participants.
A Trustee’s mandate is to oversee the Scheme Manager and hold the Scheme’s property in trust on behalf of the participants. The Trustee ensures that all the provisions outlined in the Trust Deed and the Scheme’s Investment Policy are adhered to.
For good corporate governance purposes, the Scheme Manager and Trustee should be separate companies under different management and control. Both companies should be registered and resident in Zimbabwe.
To ensure transparency, the Internal Scheme Manager and Trustee appoint a Public Auditor. The Public Auditor’s main responsibilities are: Preparation of reports for the participants of the Scheme Conducting official independent inspection and verification of the accounts of the Scheme in a prescribed manner. Reporting on key matters that are identified during the course of anAudit exercises. These matters should be relevant to the interests of the Scheme participants Report on any other issues which may be reasonably required by law. Investors are advised to deal ONLY with licensed Collective Investment Schemes. Dealing with licensed players provides for regulatory recourse.