Question:

Balderdash Investing Ltd (Balderdash) is an Australian Financial Services Licensee who is intending to operate a managed investment scheme. The scheme will invest in direct property, specifically commercial property and will be available to both retail and wholesale clients. The fund therefore will be considered illiquid.

The board of Balderdash consists of 4 directors, 3 of whom are non-executive and they meet the criteria of being considered independent.

The board would like you to advise them on the following matters:

a) Whether the scheme is required to be registered or not? If yes, what the registration process entails.

b) What would Balderdash's role, duties and responsibilities be in relation to the scheme?

c) Would they be required to establish a Compliance Committee? If not why not?

d) If they had to establish a committee, what are the responsibilities of the committee in relation to reporting?

e) Advise the board of any specific requirements in relation to disclosure when a fund is illiquid.

The board has some queries in relation to the scheme constitution. Advise the board as to the purpose of the constitution. Outline what the general content requirements are for a constitution? Who approves the content of this document?