123Persons who may be appointed to be custodians of superannuation entities

#### 123 Persons who may be appointed to be custodians of superannuation entities (1) A person must not intentionally be the custodian of a superannuation entity (other than a self managed superannuation fund) unless: (a) the person is a body corporate; and (b) any of the following subparagraphs applies: (i) the value of the net tangible assets of the body corporate is not less than the amount prescribed by the regulations; (ii) a trustee of the entity is entitled to the benefit, in respect of the due performance of the body corporate’s duties as custodian of the entity, of an approved guarantee of an amount that is not less than the amount prescribed by the regulations; (iii) both the conditions specified in subsection (1A) are satisfied. Penalty: 600 penalty units. > Note: A defendant bears an evidential burden in relation to the matters in paragraphs (1)(a) and (b) (see subsection 13.3(3) of the Criminal Code). (1A) For the purposes of subparagraph (1)(b)(iii), the following conditions are specified: (a) a trustee of the entity is entitled to the benefit, in respect of the due performance of the body corporate’s duties as custodian of the entity, of an approved guarantee; (b) the sum of the amount of the approved guarantee and the value of the net tangible assets of the body corporate is not less than the amount prescribed by the regulations. (2) Subsection (1) does not prohibit a person from being a custodian of a superannuation entity if: (a) the person immediately tells a trustee of the entity and APRA in writing that paragraph (1)(b) does not, or has ceased to, apply; and (b) the person is the custodian of the entity during: (i) the 28‑day period beginning at whichever is the later of the following times: (A) the time when paragraph (1)(b) ceased to apply to the custodian; (B) the beginning of the entity’s 1994‑95 year of income; or (ii) such longer period as APRA allows; and (c) the trustee, or the trustees, of the entity have made or propose to make, arrangements for the orderly dismissal of the person as the custodian; and (d) the person is taking, or is willing to take, all reasonable steps to assist the trustee in carrying out those arrangements. (3) If paragraph (1)(b) does not, or ceases to, apply to the custodian of a superannuation entity: (a) the custodian must immediately tell a trustee of the entity and APRA in writing; and (b) the trustee, or the trustees, must make arrangements for the orderly dismissal of the custodian; and (c) the trustee, or the trustees, must make those arrangements before the end of: (i) the 28‑day period beginning at whichever is the later of the following times: (A) the time when paragraph (1)(b) ceased to apply to the custodian; (B) the beginning of the entity’s 1994‑95 year of income; or (ii) such longer period as APRA allows. (4) A person who contravenes subsection (3) because of paragraph (a) of that subsection commits an offence punishable on conviction by a fine not exceeding 50 penalty units. (5) A person who contravenes subsection (3) because of paragraph (b) or (c) of that subsection commits an offence punishable on conviction by a fine not exceeding 100 penalty units. (6) Subsections (4) and (5) are offences of strict liability. > Note 1: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility. > Note 2: For strict liability, see section 6.1 of the Criminal Code.