(b) the value of the prescribed investments disposed of is equal to or greater than the excess amount.
(5) The trustee must carry out the plan.
(6) If the total value of the fund’s prescribed investments is more than 5% of the total value of the fund’s assets, the trustee of the fund must not make a prescribed investment.
(7) If the making of a prescribed investment would result in the total value of the fund’s prescribed investments exceeding 5% of the total value of the fund’s assets, the trustee of the fund must not make the prescribed investment.
13.17C Funds that cease to be eligible rollover funds must maintain entitlements
(1) For the purposes of subsections 31(1) and 32(1) of the Act, the requirement set out in subregulation (2) is a standard applicable to the operation of regulated superannuation funds and approved deposit funds.
(2) A fund that ceases to be an eligible rollover fund must continue to provide those of its members who are members when it so ceases with at least the entitlements that an eligible rollover fund must provide to its members under the Act and these regulations as in force at the time when it so ceases.
13.17D Cooperation with AFCA
(1) For the purposes of subsection 31(1) of the Act, the requirement set out in subregulation (3) is a standard applicable to the operation of regulated superannuation funds (other than self managed superannuation funds).
(2) For the purposes of subsection 32(1) of the Act, the requirement set out in subregulation (3) is a standard applicable to the operation of approved deposit funds.
(3) A trustee of such a fund that is required to be a member of the AFCA scheme by paragraph 101(1)(a) of the Act must take reasonable steps to cooperate with AFCA in resolving any complaint under the AFCA scheme to which the trustee is a party, including by:
(a) giving reasonable assistance to AFCA in resolving the complaint; and
(b) identifying, locating and providing to AFCA any documents and information that AFCA reasonably requires for the purposes of resolving the complaint; and
(c) giving effect to any determination made by AFCA in relation to the complaint.
(4) Subregulation (3) does not apply to superannuation complaints (within the meaning of the Corporations Act 2001).
Note: For provisions relating to superannuation complaints, see Division 3 of Part 7.10A of the Corporations Act 2001.
Division 13.3—Various prescribed matters
13.18 Sole purpose test—specified age
For the purposes of subparagraph 62(1)(a)(ii) of the Act, 65 years is the specified age.
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.
13.18A Conditional offer of goods or services—exemptions
For the purposes of subsections 68A(2) and (4) of the Act, the following kinds of goods and services are prescribed:
(b) a service that is supplied by a trustee, or an associate of a trustee, of a regulated superannuation fund to a person for the forwarding of superannuation contributions and information:
(i) to other funds or RSAs; and
(ii) on behalf of the person; and
(iii) in relation to employees of the person who have chosen those funds;
(c) an advice or administration service that relates to the payment of superannuation contributions to a regulated superannuation fund, that is supplied by a trustee, or an associate of a trustee, of the fund to:
(i) a person; or
(ii) the employees of the person.
13.19 Custodians of superannuation entities—specified amounts
For the purposes of subparagraphs 123(1)(b)(i) and (ii) and subsection 123(1A) of the Act, $5,000,000 is the prescribed amount.
13.20 Advertisement of scheme for winding‑up or dissolution of superannuation entity
For the purposes of subsection 142(7) of the Act, the prescribed form of advertisement is as set out in Schedule 3.
13.21 Report of inspector—prescribed agencies
For the purposes of subparagraph 284(3)(c)(iv) of the Act, the following agencies are prescribed:
(a) Australian Capital Territory—Registrar of Financial Institutions;
(b) Australian Financial Institutions Commission;
(c) Australian Securities Commission;
(d) Australian Transactions Reports and Analysis Centre;
(e) Commissioner of Taxation;
(f) New South Wales Crimes Authority;
(g) New South Wales Financial Institutions Commission;
(h) New South Wales Independent Commission against Corruption;
(i) Northern Territory Supervisory Authority—Registrar of Financial Institutions;
(j) Queensland Criminal Justice Commission;
(k) Queensland Office of Financial Supervision;
(l) Reserve Bank of Australia;
(m) South Australian Office of Financial Supervision;
(n) Tasmanian Office of Financial Supervision;
(o) Victorian Financial Institutions Commission;
(p) Western Australian Financial Institutions Authority;
(q) an authority of a State or Territory having functions and powers similar to those of the Director of Public Prosecutions;
(r) the police force of a State or Territory.
13.22 Statements made at an examination—manner of authentication
For the purposes of subsection 290(7) of the Act, it is a prescribed manner of authentication of a written record of an examination mentioned in the subsection if:
(a) the written record is produced as soon as practicable after the conclusion of the examination; and
(b) the written record is endorsed by a person (the endorser) other than the person examined at the examination; and
(c) the endorser:
(i) was present throughout the examination; and
(ii) reads and endorses the written record as soon as practicable after it is produced; and
(d) the endorsement:
(i) is to the effect that the record is a true record of what was said in the examination; and
(ii) is signed and dated by the endorser.
Division 13.3A—In‑house assets of superannuation funds
13.22A Definitions for Division 13.3A
In this Division:
business real property has the meaning given in subsection 66(5) of the Act.
lease arrangement means any agreement, arrangement or understanding in the nature of a lease (except a lease) under which one party is to use, or control the use of, property of another party, whether or not the agreement, arrangement or understanding is enforceable, or intended to be enforceable, by legal proceedings.
trustee, of a unit trust, means a trustee acting in the capacity of trustee.
13.22B Assets held at commencement of Division 13.3A (Act s 71)
(1) This regulation applies to an asset of a superannuation fund that:
(a) is an investment in a company or unit trust; and
(b) was acquired by the fund before the commencement of this Division; and
(c) is not affected by subregulation 13.22D(3).
(2) For subparagraph 71(1)(j)(ii) of the Act, the asset is not an in‑house asset of the superannuation fund if, when this Division commences:
(a) the superannuation fund has fewer than 5 members; and
(b) the company, or a trustee of the unit trust, is not a party to a lease with a related party of the superannuation fund, unless the lease relates to business real property; and
(c) the company, or a trustee of the unit trust, is not a party to a lease arrangement with a related party of the superannuation fund, unless the lease arrangement:
(i) is legally binding; and
(ii) relates to business real property; and
(d) the company, or a trustee of the unit trust, is not a party to a lease, or lease arrangement, with another party in relation to an asset that is the subject of another lease or lease arrangement between any party and a related party of the superannuation fund (unless the asset is business real property); and
(e) the company, or a trustee of the unit trust, does not have outstanding borrowings; and
(f) the assets of the company or unit trust do not include:
(i) an interest in another entity; or
(ii) a loan to another entity, unless the loan is a deposit with an authorised deposit‑taking institution within the meaning of the Banking Act 1959; or
(iii) an asset over, or in relation to, which there is a charge; or
(iv) an asset that was acquired from a related party of the superannuation fund after 11 August 1999, unless the asset was business real property acquired at market value; or
(v) an asset that had been, at any time (unless it was business real property acquired by the company, or a trustee of the unit trust, at market value) in the period from the end of 11 August 1999 to the commencement of this Division, an asset of a related party of the superannuation fund.
(3) In subparagraphs (2)(f)(iv) and (v):
asset does not include:
(a) money; or
(b) in relation to a company, a share in the company.
13.22C Assets acquired after commencement of Division 13.3A (Act s 71)
(1) This regulation applies to an asset of a superannuation fund that:
(a) is an investment in a company or unit trust; and
(b) was acquired by the fund on or after the commencement of this Division; and
(c) is not affected by subregulation 13.22D(3).
(2) For subparagraph 71(1)(j)(ii) of the Act, the asset is not an in‑house asset of the superannuation fund if, when the asset is acquired:
(a) the superannuation fund has no more than 6 members; and
(b) the company, or a trustee of the unit trust, is not a party to a lease with a related party of the superannuation fund, unless the lease relates to business real property; and
(c) the company, or a trustee of the unit trust, is not a party to a lease arrangement with a related party of the superannuation fund, unless the lease arrangement:
(i) is legally binding; and
(ii) relates to business real property; and
(d) the company, or a trustee of the unit trust, is not a party to a lease, or lease arrangement, with another party in relation to an asset that is the subject of another lease or lease arrangement between any party and a related party of the superannuation fund (unless the asset is business real property); and
(e) the company, or a trustee of the unit trust, does not have outstanding borrowings; and
(f) the assets of the company or unit trust do not include:
(i) an interest in another entity; or
(ii) a loan to another entity, unless the loan is a deposit with an authorised deposit‑taking institution within the meaning of the Banking Act 1959; or
(iii) an asset over, or in relation to, which there is a charge; or
(iv) an asset that was acquired from a related party of the superannuation fund after 11 August 1999, unless the asset was business real property acquired at market value; or
(v) an asset that had been at any time (unless it was business real property acquired by the company, or a trustee of the unit trust, at market value) an asset of a related party of the superannuation fund since the later of:
(A) the end of 11 August 1999; and
(B) the day 3 years before the day on which the fund first acquired an interest in the company or unit trust.
(3) In subparagraphs (2)(f)(iv) and (v):
asset does not include:
(a) money; or
(b) in relation to a company, a share in the company.
13.22D When regulations 13.22B and 13.22C cease to apply to assets
(1) If regulation 13.22B or 13.22C applies to an asset, that regulation ceases to apply to the asset if any of the following events happens:
(a) the number of members of the superannuation fund increases to more than 6;
(b) either of the following becomes an asset of the company or unit trust:
(i) an interest in another entity;
(ii) a loan to another entity, unless the loan is a deposit with an authorised deposit‑taking institution within the meaning of the Banking Act 1959;
(c) the company, or a trustee of the unit trust:
(i) borrows money; or
(ii) gives, or allows to be given, a charge over, or in relation to, an asset of the company or unit trust;
(d) the company, or a trustee of the unit trust, conducts a business;
(e) the company, or a trustee of the unit trust, becomes a party to a lease with a related party of the superannuation fund, unless the lease relates to business real property;
(f) the company, or a trustee of the unit trust, becomes a party to a lease arrangement with a related party of the superannuation fund, unless the lease arrangement:
(i) is legally binding; and
(ii) relates to business real property;
(g) if the company, or a trustee of the unit trust, is a party to a lease, or legally binding lease arrangement, with a related party of the superannuation fund in relation to business real property, the property ceases to be business real property;
(h) if the company, or a trustee of the unit trust, is a party to a lease arrangement with a related party of the superannuation fund in relation to business real property, the lease arrangement ceases to be legally binding;
(i) the company, or a trustee of the unit trust, becomes a party to a lease, or lease arrangement, with another party in relation to an asset (unless it is business real property) that is the subject of another lease or lease arrangement between any party and a related party of the superannuation fund;
(j) a related party of the superannuation fund becomes a party to a lease, or lease arrangement, with another party in relation to an asset (other than business real property) that is the subject of another lease or lease arrangement between any party and:
(i) the company; or
(ii) a trustee of the unit trust;
(k) if the company, or a trustee of the unit trust, is a party to a lease, or lease arrangement, with another party in relation to business real property that is the subject of another lease or lease arrangement between any party and a related party of the superannuation fund, the property ceases to be business real property;
(l) the company, or a trustee of the unit trust, conducts a transaction otherwise than on an arm’s length basis;
(m) the company, or a trustee of the unit trust, acquires an asset of a related party of the superannuation fund, unless the asset is business real property acquired at market value;