Auroran Monetary Fund
Purpose and function
The purpose of the AMF is to:
- Prevent political instability,
- Promote economic prosperity,
- Encourage good governance,
- Protect UNAC nations from the spillover effects of financial crises in other states,
Its functions are to:
- Provide bond and shareholders with a good return on their investment,
- Give nations which cannot afford finance on commercial markets access to affordable and manageable finance,
- Develop policy proposals and economic models and collect information to assist policymakers to make good governance decisions.
Structure and organization
The Auroran Monetary Fund is comprised of the following two sub-funds:
- The Auroran Financial Stability Fund which lends money to governments whose countries cannot afford to pay for imports or to pay their debts. The purpose of this sub-fund is to ensure that the affected country is financial stable i.e. it provides the nation with the liquidity required to meet its debts and bridge its balance of payments gap.
- The Auroran Infrastructure Fund which lends money to governments to build or expand physical infrastructure. This sub-fund aims to promote economic growth in the short term through the jobs and demand for goods and services created by the construction of the infrastructure and in the future by the economic benefits which accrue to the population from using that infrastructure.
The funds are practically 2 separate companies with their own financial statements, assets, liabilities, and equity, but the General Assembly exercises control over both bodies.The Funds administer directives specifically concerned with:
- Collection of debt repayments,
- Disbursal of monies to applicant governments,
- Processing of loan applications,
- Development of policies for indebted nations,
- Collection and analysis of data relevant to that fund,
- Distribution of dividends to shareholders and maturities to bondholders,
- Putting up bonds on bond markets.
General Assembly
The General Assembly comprises the member states of the Auroran Monetary Fund. The General Assembly has supreme decision-making authority over the AMF. It wields the following powers:
- Appoint, dismiss, and ask questions of the Board of Directors,
- Admit, suspend, and expel member states,
- Issue directives for the Board of Directors,
- Approve the budget, large borrowings, amendments to the Charter, and changes to the shareholding structure.
Voting in the General Assembly is by number and by share. This means that both over 50% of member state, and over 50% of voting shares must approve a decision for it to become binding.
Board of Governors
The Board of Directors collectively administers the directives of the has following duties and powers:
- Approve proposals to the General Assembly,
- Approve reports to the General Assembly,
- Approve any decisions which do not fall within the remit of the General Assemby and which fall outside the scope of the individual members’ duties.
The Board consists of the President, two Vice Presidents and 4 Directors. The Directors are responsible for operational issues such as suppliers, facilities, human resources, and communications. They fall under the control of the President.
President
The President of the AMF has the following functions:
- Convene and preside over meetings of the Board of Directors,
- Represent the organization externally, which includes in other international organizations and in reporting to the Auroran Parliament,
- Present proposals and reports to the General Assembly on behalf of the Board of Directors,
- Hold the Vice Presidents accountable,
- Direct the daily operations of AMF.
- Coordinate the work of the Board of Directors.
Vice Presidents
The AFSF and the AIF are run by the Vice Presidents who have the following duties and powers:
- Execute the directives of the General Assembly,
- Report to the President and the Board of Directors on their sub-fund,
- Control the appointment of and manage personnel,
- Make proposals with respect to their sub-fund,
- Direct the daily operations of their respective fund.
The AIF and the AFSF have independent shareholding structures. There are no shares for the AMF as a whole. The AIF and the AFSF have separate share structures and pay out their own dividends. They both have the following 2 types of shares:
- Voting shares which give holders thereof the right to vote in the General Assembly. Only governments can own such shares. Governments may only transfer these shares to another government. They may not transfer these shares to non-member states. Governments may only transfer their voting share to another nation with the approval of the General Assembly. Voting rights are distributed according to the proportion of held voting shares. The General Assembly may vote to create more shares which would alter the voting rights of the members. Each fund has its own shares meaning that having shares in one sub-fund does not give one voting rights in matters concerning the other sub-fund. Members with voting shares only receive dividends once the preferential shares and bondholders have been paid. Governments may purchase as many shares as they can afford and as many shares as are available. Shares are sold and bought by auction. Meaning, for each round of shares made available, a government must present the quantity of shares and total price that it is willing to pay for the shares. The shares are then distributed according to the auction. The value of the share is calculated by distributed the net asset value of the sub-fund by number of shares.
- Preferential shares do not grant any voting rights. They grant shareholders the right to receive a fixed dividend per share. Preferential shareholders are paid after bondholders but before voting shareholders. Anyone including governments, private citizens and companies may buy these shares. These shares can be sold and bought on any market where shares are legally traded.
Dispute resolution
Internal dispute resolution
Shareholders who have a dispute with respect to their rights whether with another shareholder or with the fund where their shares are held, they may present the dispute for mediation. The Independent Mediation and Reconciliation Committee helps nations settle disputes. Litigants may choose a party to stand as the mediator and help with the process. The IMRC proposes and guides litigants to solutions and provides counseling and emotional support.
Where a shareholder has a dispute with another shareholder with respect to their shareholder rights, the matter is resolved by the Independent Shareholders Dispute Resolution Committee, which is independent of the litigants. Litigants must state conflicts of interests arising from the presence of one of the committee’s members. The General Assembly appoints the members of the ISDRC for fixed terms. The ISDRC is insulated from shareholder interests e.g. their stipends are independent of the GA which may not withhold them, the GA may not dictate to the ISDRC how they are to make a decision. ISDRC is meant to provide expedient arbitration. If a litigant is unsatisfied with a decision of the ISDRC, they may open a case with the Auroran Court of Justice.
External dispute resolution
The only court of law with the power to make legally binding decisions over the AMF, AIF and AFSF is the Auroran Court of Justice. The decisions made by the ACJ are binding on the litigants who participate.
- The pre-trial bench of the ACJ determines whether a case should be brought to the trial bench for consideration. It looks at whether the case falls within the scope of the ACJ, whether the matter is material and whether the litigants have attempted other channels to resolve the case. This bench issues a summons for the opposing party to stand trial, creating a legal obligation for the respondent to appear before the court and defend itself.
- The trial bench of the ACJ receives evidence, arguments, and witness testimony from the litigants. It uses judicial precedent, international law, and international customary law to determine whether the arguments, evidence and testimony supports the matter which the litigants have presented. The trial bench may impose sanctions and remedies upon the litigants as it sees fit within the remit of relevant international law.
- The appellate bench of the ACJ listens to appeals from litigants who are unsatisfied with the way the trial bench arrived at its decision. It does not retry the case. It looks at where there were substantive and/or procedural errors in the decision of the trial bench in arriving at its decision. It may then overturn the remedies and sanctions of the trial bench or impose entirely new sanctions and remedies.
Funding
The AMF, as a whole, has two sources of funding: shares and bonds:
- Shares give the shareholder a repayment in the form of dividends and the dividend payout is contingent on the profits which the AMF makes.
- Bonds give the bondholder a fixed repayment in the form of maturities according to the conditions of the bond-certificate. Usually bonds are payable regardless of the financial performance or position of the AMF, unless bondholders are willing to accept revised bond-certificate conditions through accepting a different (which they are not forced to).
The AMF may not invest money in equities unless the GA agrees to convert a loan repayment to an equity swap. The AMF is not an investment management firm, instead it is a last-resort source of finance to help nations navigate financial distress or access economic opportunities.