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Endowment Fund Regulations made under Section 20 of the
Arts Council Act
S.N.S. 1995-96, c. 2
O.I.C. 97-576 (September 3, 1997), N.S. Reg. 117/97
1 These regulations may be cited as the Endowment Fund Regulations.
2 In these regulations,
(a) "Act" means the Arts Council Act;
(b) "advisors" means the advisors selected pursuant to Section 4;
(c) "capital" means the principal amount of any money, at any time, paid or transferred to the Endowment Fund from any source, and for greater certainty does not include any interest, dividends, income or realized capital gain arising from the principal amount;
(d) "Endowment Fund" means the Endowment Fund as defined in the Act; and
(e) "investment managers" means the investment managers selected pursuant to Section 6.
Establishment and administration of Endowment Fund
3 (1) The Council shall establish the Endowment Fund by maintaining an account to be under the control and management of the Council, into which may be paid
(a) money paid into or transferred to the Endowment Fund, pursuant to the Act;
(b) money designated by a donor or transferor to be paid into the Endowment Fund; and
(c) money transferred by the Council to the Endowment Fund.
(2) The Council shall only make withdrawals of capital from the Endowment Fund if the withdrawals are
(a) for the purpose of investing the money; and
(b) in accordance with the instructions of the investment managers.
(3) Where funds controlled by the investment managers are to be distributed to the Council, the investment managers shall pay the funds into the Endowment Fund and the Council shall then distribute the funds from the Endowment Fund to the Council either in accordance with the Endowment Fund expenditures portion of the budget prepared by the Council in effect at the time of the intended distribution, or with the approval of the Minister.
(4) The Council shall not distribute for its general use, any money of the Endowment Fund, including capital or income, except in accordance with these regulations.
4 (1) The Council shall by resolution select a panel of three individuals who are knowledgeable in investment matters to be known as "advisors".
(2) The Council may enter into an agreement to retain the advisors on such terms and conditions as the Council considers desirable, including, without limitation, terms and conditions respecting indemnification and limitations of liability.
(3) The advisors shall be reimbursed for the reasonable out-of-pocket expenses incurred in the course of their duties in accordance with the policy for reimbursements for out-of-pocket expenses adopted by the Council for members of Council, but shall otherwise serve without remuneration.
5 (1) The advisors shall recommend to the Council an appropriate investment policy for the Endowment Fund.
(2) The advisors shall review the investment policy no less frequently than annually and shall, when they consider it appropriate, recommend amendments to the investment policy.
6 (1) The advisors shall recommend to the Council
(a) one or more investment managers to invest and reinvest the money in the Endowment Fund in accordance with the current investment policy; and
(b) the terms, including compensation, on which an investment manager should be retained.
(2) The Council may by resolution select the investment managers.
(3) The Council may enter into an agreement or arrangement to retain the investment managers on such terms and conditions as the Council considers desirable.
(4) The advisors shall, at the time of the expiry of the Council's contract with the investment managers,
(a) review the advisors' recommendations to the Council pursuant to subsection (1); and
(b) recommend to the Council such change in the selection or terms of retention of the investment managers as the advisors consider appropriate.
Distribution of income of Endowment Fund
7 (1) The advisors shall, subject to subsection (2), recommend annually to the Council the amount of income of the Endowment Fund, including, without limitation, interest, dividends, and realized capital gains, to be distributed to the Council for expenditures either as set out in the Endowment Fund expenditures portion of the budget prepared by the Council in effect at the time of the intended distribution, or with the approval of the Minister.
(2) The advisors shall, in recommending the amount of income to be distributed to the Council pursuant to subsection (1), take into consideration that the value of the capital of the Endowment Fund after inflation should not diminish over time.
(3) Undistributed income shall be reinvested in accordance with the advice of an investment manager.
Resolutions in response to advisors' recommendations
8 The Council may by resolution
(a) accept and act upon the recommendations of the advisors; or
(b) with the approval of the Minister, not accept the recommendations of the advisors, and
(i) adopt and carry out an investment policy different from that recommended by the advisors,
(ii) select an investment manager or agree to terms of retention of investment managers different from those recommended by the advisors, or
(iii) select a percentage of income for distribution from the Endowment Fund to the Council different from that recommended by the advisors.
Limitations on value of property
9 (1) For the purpose of subsection 15(2) of the Act, the amount of the value of any real or personal property, in excess of which all the money from its sale or lease shall be paid by the Council into and become part of the Endowment Fund, unless the Minister otherwise agrees, is $2500.00.
(2) For the purpose of subsection 12(2) of the Act, the limit on the value of real or personal property that may be sold, conveyed or leased by the Council without the approval of the Governor in Council is $25 000.
Definition of "budget" in Act
10 For the purposes of the Act, "budget" includes a budget of the Endowment Fund expenditures.