Investment LIMITATIONSInvestment LIMITATIONS

Investment LIMITATIONS

33. The trustee must not *borrow money or maintain an existing borrowing of money.

33.1. However, this guideline does not prohibit a trustee from *borrowing money if:

• the purpose of the borrowing is to enable the trustee to make a distribution to a *deductible gift recipient which the trustee must make under these guidelines and which, apart from the borrowing, the trustee would be unable to make; and

• the period of the borrowing does not exceed 90 days; and

• the borrowing, when made, would not result in total borrowings exceeding 10 per cent of the *market value of the fund’s assets.

33.2. This guideline also does not prohibit a trustee from *borrowing money if:

• the purpose of the borrowing is to enable the trustee to cover settlement of a transaction for the acquisition of a financial instrument; and

• at the time the relevant investment decision was made, it was likely that the borrowing would not be needed; and

• the period of the borrowing does not exceed 14 days; and

• the borrowing, when made, would not result in total borrowings exceeding 10 per cent of the *market value of the fund’s assets.

33.3. Guideline 33 also does not apply to the acquisition of a financial instrument excluded by the Commissioner from that guideline.

34. The fund’s investments must be made and maintained on an *arm’s length unless another guideline allows otherwise.

35. The trustee must not give a security over, or in relation to, an asset of the fund.

35.1. However, this guidelines does not apply to:

• the acquisition of a financial instrument excluded by the Commissioner from that guideline; or
• an agreement to guarantee the repayment of any money lent by a creditor for the sole benefit of one or more *deductible gift recipients.

36. The fund must not acquire an asset (except by way of gift) from, and must not make a loan or provide any other kind of financial assistance to, a founder of the fund, a donor to the fund, the trustee, a director, officer, agent, *member or employee of the trustee, or an *associate of any of these entities except:

• by way of an arm’s length commercial transaction;

• on terms more favourable to the fund than would otherwise be expected under an arm’s length transaction.

37. The trustee must keep the assets of the fund separate from all other assets.

37.1. However, this guideline does not prevent a licensed trustee company or the Public Trustee of a state or territory from operating common funds for investment purposes.