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Part II .

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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

Citation

1 These regulations may be cited as the Endowment Fund Regulations .

Definitions

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

(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.

Advisors

(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

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.

Investment policy

(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.

Investment managers

(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

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

(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

(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.