Superannuation Industry (Supervision) Amendment Regulations 2011 (No. 2)1
Select Legislative Instrument 2011 No. 130
I, QUENTIN BRYCE, Governor-General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following Regulations under the Superannuation Industry (Supervision) Act 1993.
Dated 30 June 2011
QUENTIN BRYCE
Governor-General
By Her Excellency’s Command
BILL SHORTEN
Minister for Financial Services and Superannuation
1              Name of Regulations
                These Regulations are the Superannuation Industry (Supervision) Amendment Regulations 2011 (No. 2).
2              Commencement
                These Regulations commence on 1 July 2011.
3              Amendment of Superannuation Industry (Supervision) Regulations 1994
                Schedule 1 amends the Superannuation Industry (Supervision) Regulations 1994.
Schedule 1        Amendment
(regulation 3)
 
[1]           After regulation 13.18
insert
13.18AA Self managed superannuation funds — investment in collectables and personal use assets
         (1)   For section 62A of the Act, this regulation applies to investments involving any of the following (section 62A items):
                (a)    artwork (within the meaning of the Income Tax Assessment Act 1997);
               (b)    jewellery;
                (c)    antiques;
               (d)    artefacts;
                (e)    coins, medallions or bank notes;
                (f)    postage stamps or first day covers;
               (g)    rare folios, manuscripts or books;
               (h)    memorabilia;
                (i)    wine or spirits;
                (j)    motor vehicles;
               (k)    recreational boats;
                (l)    memberships of sporting or social clubs.
Asset must not be leased to related party
         (2)   Each trustee of a regulated superannuation fund that is a self managed superannuation fund commits an offence if:
                (a)    the fund holds an investment involving a section 62A item; and
               (b)    either:
                          (i)    an interest in the item is leased to a related party of the fund; or
                         (ii)    a trustee of the fund enters a lease arrangement with a related party of the fund in relation to the item.
Penalty:   10 penalty units.
Note   Lease arrangement and related party are defined in subsection 10 (1) of the Act.
Item must not be stored in private residence of related party
         (3)   Each trustee of a regulated superannuation fund that is a self managed superannuation fund commits an offence if:
                (a)    the fund holds an investment involving a section 62A item; and
               (b)    the item is stored in the private residence of a related party of the fund.
Penalty:   10 penalty units.
Note   Related party is defined in subsection 10 (1) of the Act.
Decision on storage of item must be documented
         (4)   Each trustee of a regulated superannuation fund that is a self managed superannuation fund commits an offence if:
                (a)    the fund holds an investment involving a section 62A item; and
               (b)    the trustee or trustees of the fund make a decision relating to the storage of the item; and
                (c)    either:
                          (i)    a written record of the reasons for the decision is not made; or
                         (ii)    if a written record of the reasons is made — the record is not kept for at least 10 years after the decision.
Penalty:   10 penalty units.
Item must be insured in fund’s name
         (5)   Each trustee of a regulated superannuation fund that is a self managed superannuation fund commits an offence if:
                (a)    the fund owns a section 62A item, other than a membership of a sporting or social club; and
               (b)    it is more than 7 days since the fund acquired the item; and
                (c)    the item is not insured in the name of the fund.
Penalty:   10 penalty units.
Item must not be used by related party
         (6)   Each trustee of a regulated superannuation fund that is a self managed superannuation fund commits an offence if:
                (a)    the fund holds an investment involving a section 62A item; and
               (b)    a related party of the fund uses the item.
Penalty:   10 penalty units.
Note   Related party is defined in subsection 10 (1) of the Act.
Transfer of asset to related party requires independent valuation
         (7)   A trustee of a regulated superannuation fund that is a self managed superannuation fund commits an offence if:
                (a)    the trustee realises an investment held by the fund involving a section 62A item; and
               (b)    a related party of the fund receives an interest in the item because of the realisation; and
                (c)    the realisation was not at a market price determined by a qualified independent valuer.
Penalty:   10 penalty units.
Note   Related party is defined in subsection 10 (1) of the Act.
Offences are strict liability offences
         (8)   An offence against any of subregulations (2) to (7) is an offence of strict liability.
Note   For strict liability, see section 6.1 of the Criminal Code.
Transitional period for existing assets
         (9)   Subregulations (2) to (7) do not apply in relation to an investment in a section 62A item that was held by the fund on 30 June 2011.
       (10)   However, subregulation (9) ceases to be in force on 1 July 2016.
Note
1.       All legislative instruments and compilations are registered on the Federal Register of Legislative Instruments kept under the Legislative Instruments Act 2003. See http://www.frli.gov.au.