Section 8
Section 8
(1)
The Executive Board of each Trust Sub-Fund shall establish and adhere to investment policies and adopt standards and procedures that a reasonably prudent person would apply to a portfolio of investments to achieve the Fund’s purpose to reasonably diversify its risks, avoid undue risk of loss and to obtain a reasonable return, under all the relevant circumstances. The Executive Board shall invest, manage and administer the respective Trust Sub-Fund’s assets in accordance with such policies, standards and procedures and solely for the purpose of achieving the Fund’s purpose. Subject to the foregoing sentence, the Executive Board of each
Trust Sub-Fund may invest its assets in any investment specified in subsection (2).
(2)
The investments referred to in subsection (1) are —
(a)
any stocks, funds, shares or securities in companies incorporated or operating in Brunei Darussalam which have been approved by His Majesty the Sultan and Yang Di-Pertuan;
(b)
any investment in any entity or instrument of issuers based in any other country or territory, or originating in any other currency, approved by His Majesty the Sultan and Yang Di-Pertuan, including —
(i)
any fixed interest securities issued by or guaranteed by a Government, state or municipality or by an
Sustainability Fund 10
international institution guaranteed by a Government, whether or not traded on an exchange;
(ii)
any floating rate and inflation protected security;
(iii)
any obligation of a corporation, commercial bank or a holding company; asset-backed security and backed security issued or unconditionally guaranteed by a corporate entity or trust; any repurchase and reverse repurchase agreement with a major commercial bank and a primary dealer;
(iv)
futures, forwards, options contracts, or swaps on any investments authorised by this subsection which are traded on an exchange regulated by a national authority; or over-the-counter derivative contracts which are based on market criteria or broadly recognised transactions among reputable and creditworthy counterparties;
(v)
any security listed and traded on an exchange regulated by a national authority;
(vi)
any exchange-traded funds and investment company, instrument that provides exposure to market indices for any investments authorised by this subsection;
structured instrument including but not limited to a collateralised debt obligation; a private equity fund and an individual security; and a hedge fund;
(vii)
any Islamic financial instrument;
(viii)
any bullion, commodity and currency;
(ix)
any real estate and infrastructure;
(x)
any other specific investment not included in this subsection as may be authorised by His Majesty the
Sultan and Yang Di-Pertuan.
Sustainability Fund
B.L.R.O. 3/2011 11
Each Executive Board may, in its reasonable discretion, establish and adhere to policies, standards and procedures which are as broad as or more restrictive than is permitted by this subsection.
(3)
The Executive Board of each Trust Sub-Fund may prudently delegate appropriate authority to a seconded officer, any agency of the
Government and any other company (including but not limited to an investment management firm, insurance company and a bank) (each of which are in subsection (4) referred to as a service provider), provided that —
(a)
such delegation is appropriately documented;
(b)
the delegate provides a written acknowledgment of the appropriate responsibility, liability and duties associated with the delegation; and
(c)
the Board monitors the performance of each delegate.
(4)
The Executive Board of each Trust Sub-Fund and each respective Investment Advisory Committee (and each member of such Board and Committee) shall perform its and his duties solely to achieve the purposes of that Trust Sub-Fund. An Executive Board shall establish and adhere to policies and procedures to detect and prevent conflicts of interest and to impose reasonable ethical standards on its members, all members of the respective Investment Advisory Committee, all seconded officers and all service providers which the Board hires (all of which are in this subsection referred to as a covered person). Such policies and procedures shall include a provision that —
(a)
every covered person who has a direct or indirect personal financial or other interest in a contract or investment made or proposed to be made by a Trust Sub-Fund, shall disclose the nature of his interest at the first meeting of the Board after the relevant facts have come to his knowledge;
(b)
a disclosure under paragraph (a) shall be recorded in the minutes of the Executive Board meeting and, after the disclosure, the covered person shall —
(i)
not take part in any deliberation or decision of the
Board or its staff regarding, or otherwise influence or
Sustainability Fund 12
seek to influence the substance, terms or any other aspect of, the contract or investment;
(ii)
if he is a member of the Executive Board, be disregarded for the purpose of constituting a quorum of the Executive Board for any such deliberation or decision;
(iii)
if he is a member of the Investment Advisory
Committee, a seconded officer or a service provider, abstain from taking any action regarding that contract or investment;
(c)
no act or proceeding of the Executive Board shall be questioned by any person who is not a member of the Executive
Board on the ground that a covered person has contravened the provisions of this subsection;
(d)
no member of the Executive Board of each Trust Sub-Fund shall act as a delegate on the Executive Board from any commercial, financial, agricultural, industrial or other interests with which he may be connected.
(5)
The Executive Board of each Trust Sub-Fund shall establish and adhere to a written system of internal controls regarding its investment programme, receipt and distribution of monies and other activities. At a minimum, that system shall require separation of functions and internal audit processes, appropriate under the circumstances.
(6)
The accounts of each Trust Sub-Fund shall be audited annually by —
(a)
the Auditor General; or
(b)
any person who has been authorised to perform the duties required by the Companies Act (Chapter 39) to be performed by an auditor, who shall be appointed annually by His Majesty the Sultan and Yang Di-Pertuan:
Provided that where the accounts have been audited under subsection 6(b), they may be verified by the Auditor General before a copy is submitted to His Majesty the Sultan and Yang Di-Pertuan.
Sustainability Fund
B.L.R.O. 3/2011 13
(7)
The Executive Board of each Trust Sub-Fund shall convene meetings as often as may be required but not less frequently than once every 3 months. At every meeting of an Executive Board, a quorum shall consist of a majority of the members and decisions shall be adopted by a simple majority of the votes of the members present and voting except that in the case of an equality of votes, the chairman shall have a decisive vote. The
Executive Board shall cause written minutes of its proceedings and decisions to be kept. The chairman of the Executive Board shall cause all decisions of the Board and minutes of each meeting to be sent to the chairman of the
Sustainability Fund Board as soon as practicable after that decision or meeting, who shall then transmit them to His Majesty the Sultan and Yang
Di-Pertuan.