Endowment Fund Regulationsmade 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 ortransferred to the Endowment Fund from any source, and for greatercertainty does not include any interest, dividends, income or realizedcapital 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 selectedpursuant to Section 6.
Establishment and administration of Endowment Fund
3 (1) The Council shall establish the Endowment Fund by maintaining an accountto be under the control and management of the Council, into which may bepaid
(a) money paid into or transferred to the Endowment Fund, pursuant to theAct;
(b) money designated by a donor or transferor to be paid into theEndowment Fund; and
(c) money transferred by the Council to the Endowment Fund.
(2) The Council shall only make withdrawals of capital from the EndowmentFund 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 tothe Council, the investment managers shall pay the funds into theEndowment Fund and the Council shall then distribute the funds from theEndowment Fund to the Council either in accordance with the EndowmentFund expenditures portion of the budget prepared by the Council in effect atthe 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 theEndowment Fund, including capital or income, except in accordance withthese regulations.
4 (1) The Council shall by resolution select a panel of three individuals who areknowledgeable in investment matters to be known as "advisors".
(2) The Council may enter into an agreement to retain the advisors on such termsand conditions as the Council considers desirable, including, withoutlimitation, terms and conditions respecting indemnification and limitations ofliability.
(3) The advisors shall be reimbursed for the reasonable out-of-pocket expensesincurred in the course of their duties in accordance with the policy forreimbursements for out-of-pocket expenses adopted by the Council formembers of Council, but shall otherwise serve without remuneration.
5 (1) The advisors shall recommend to the Council an appropriate investmentpolicy for the Endowment Fund.
(2) The advisors shall review the investment policy no less frequently thanannually and shall, when they consider it appropriate, recommendamendments 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 inthe Endowment Fund in accordance with the current investment policy;and
(b) the terms, including compensation, on which an investment managershould be retained.
(2) The Council may by resolution select the investment managers.
(3) The Council may enter into an agreement or arrangement to retain theinvestment managers on such terms and conditions as the Council considersdesirable.
(4) The advisors shall, at the time of the expiry of the Council's contract with theinvestment managers,
(a) review the advisors' recommendations to the Council pursuant tosubsection (1); and
(b) recommend to the Council such change in the selection or terms ofretention of the investment managers as the advisors considerappropriate.
Distribution of income of Endowment Fund
7 (1) The advisors shall, subject to subsection (2), recommend annually to theCouncil the amount of income of the Endowment Fund, including, withoutlimitation, interest, dividends, and realized capital gains, to be distributed tothe Council for expenditures either as set out in the Endowment Fundexpenditures portion of the budget prepared by the Council in effect at thetime of the intended distribution, or with the approval of the Minister.
(2) The advisors shall, in recommending the amount of income to be distributedto the Council pursuant to subsection (1), take into consideration that thevalue of the capital of the Endowment Fund after inflation should notdiminish over time.
(3) Undistributed income shall be reinvested in accordance with the advice of aninvestment 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 ofthe advisors, and
(i) adopt and carry out an investment policy different from thatrecommended by the advisors,
(ii) select an investment manager or agree to terms of retention ofinvestment managers different from those recommended by theadvisors, or
(iii) select a percentage of income for distribution from theEndowment Fund to the Council different from that recommendedby the advisors.
Limitations on value of property
9 (1) For the purpose of subsection 15(2) of the Act, the amount of the value ofany real or personal property, in excess of which all the money from its saleor lease shall be paid by the Council into and become part of the EndowmentFund, 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 realor personal property that may be sold, conveyed or leased by the Councilwithout 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 Fundexpenditures.