THE ROLE OF THE TRUSTEE
Unit trust schemes, such as Foord Unit Trusts, are established by a deed of trust for the benefit of investors. As FAIEKA SLEMMING explains, the deed is between the manager and an independent trustee that provides a fiduciary oversight role.
The duties of the trustee are established in law and include ensuring that the scheme is managed and administered in compliance with the law and deed. The trustee must report directly to the regulator if it becomes aware of any irregularity or undesirable practice in the unit trust scheme.
Investments are registered in the name of the trustee and must, by law, be kept totally separate from the business assets of the manager and the trustee. In practice, this is done using the trustee’s nominee company.
A trustee, although appointed by the unit trust manager, must be approved by the regulator. Only entities with adequate capital and operational ability may act as trustees. The trustee of the Foord Unit Trust Scheme is Rand Merchant Bank, a division of FirstRand Bank Limited.