(1) Subject to the Companies Act, 1963 (Actl79), the directors of a mutual fund shall determine the investment and general policies of the company and shall give directions to the manager.

(2) A director shall not give a direction which is likely to make the manager act in contravention of this Aa or of the Regulations and the directors shall act in accordance with the terms of the Regulations or the constitution of the mutual fund and any management agreement.

(3) A director who contravenes subsection (2) is liable to pay to the Commission an administrative penalty of five hundred penalty units.