A meeting that nobody can prove happened decides nothing. The Capital Market Act 2015 therefore pairs the meeting rules in Division 5 of Part V with record-keeping duties: minutes in Subdivision 7, and the register of unit holders in Division 6. Both carry criminal penalties.
Minutes: section 248
A trustee “shall keep minute books in which it records within one month (a) proceedings of meetings of the scheme; and (b) resolutions passed in that meeting”, and shall ensure that the minutes “are signed within a reasonable time after the meeting by the chair of the meeting or the chair of the next meeting”.
On a poll the minutes should record the votes for and against; on a show of hands the chair’s declaration is enough and the numbers need not be minuted (section 245(4)). The books must be kept at the trustee’s registered office, its principal place of business in Papua New Guinea, or another place in the country approved by the Securities Commission (section 248(3)). A minute so recorded and signed “is evidence of the proceeding or resolution to which it relates, unless the contrary is proved” (section 248(4)). A trustee that fails to keep the books where section 248(3) requires commits an offence punishable by a fine of up to K1 million, with each director liable to a fine of up to K100,000 or two years’ imprisonment, or both (section 248(5)).
Section 248(5) attaches the penalty only to subsection (3), the place where the books are kept. Failing to record proceedings within one month, or to have minutes signed, breaches the Act but carries no specific penalty in section 248.
Members’ access to minutes: section 249
The trustee must keep the minute books “open for inspection by members free of charge” (section 249(1)). A member may also ask in writing for a copy of the minutes of any meeting, or an extract. If the trustee asks no fee, it must send the copy within 14 days of the request; if it requires payment, within 14 days of receiving it, in each case subject to any longer period the Commission approves (section 249(3)–(4)). The fee cannot exceed a prescribed amount (section 249(5)); none has yet been prescribed. A trustee that refuses access commits an offence carrying a fine of up to K1 million, with every director liable to a fine of up to K100,000 or two years’ imprisonment, or both (section 249(6), where the printed fine “K1,000,0000.00” is an evident misprint).
The register of unit holders: section 250
Every trustee must keep a register of unit holders recording, for an individual, name and address, and for a corporation, name, registered address and registration number (section 250(1)), together with the number of units each member holds, the dates each person became and ceased to be a member, and other relevant particulars (section 250(2)). Those entries are to be kept “for a period of seven years”; the subsection most naturally requires entries, including former members’, to be preserved for seven years, and former members may be moved to a separate register (section 250(3)). The register is prima facie evidence of its contents (section 250(4)). Once a scheme has more than 50 members the trustee must keep an index of names, updated within 14 days of any change, unless the register is itself in indexed form (section 250(5)–(6)). Breach is an offence with a fine of up to K5 million (section 250(7)). In 2006 the Pacific Balance Fund’s trustee needed weeks to reformat an inadequate register before it could mail 30,000 unit holders, as the National Court recorded in Pacific Equities and Investment Ltd v Melanesian Trustee Services Ltd [2007] PGNC 24; N3122.
Where it is kept, closure and extracts
| Rule | Section | Penalty for breach |
|---|---|---|
| Register and index kept at the trustee’s registered office in PNG | 251 | Fine up to K5 million |
| Register may be closed on 14 days’ notice to the Commission, for no more than 30 days in total in a calendar year | 252(1) | — |
| Member’s extract (own name, address, units held, amounts paid) supplied within 21 days of request, for a reasonable fee paid in advance | 252(2) | Fine up to K500,000 |
| Branch register outside PNG: location notified to the Commission within one month; entries copied to the principal register | 254 | Fine up to K500,000 |
Closing the register under section 252(1) fixes the holdings for a distribution or a poll. The extract right in section 252(2) lets a unit holder confirm that the units they paid for are recorded in their name.
Rectification by the National Court: section 253
If a name is wrongly included in or left off the register, or entered in the wrong way, “any member or unit holder, trustee or other person aggrieved” may apply to the National Court for rectification (section 253(1)). The Court may refuse the application, or order rectification together with payment by the trustee of any damages sustained by a party (section 253(2)). Section 255 separately entitles an executor or administrator to be registered in place of the deceased. See what happens to units when a unit holder dies.
The minute books and the register are the two documents a dissatisfied unit holder is entitled to see as of right. A trustee that stalls on a section 249 or 252 request is committing an offence. See how to complain about a trustee.
Sources
Before relying on anything here, read the current text of the Capital Market Act 2015 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.