Superannuation Industry (Supervision) Act 1993

PART 8 - IN-HOUSE ASSET RULES APPLYING TO REGULATED SUPERANNUATION FUNDS  

Division 1 - Object and interpretation  

Subdivision C - In-house assets  

SECTION 71   MEANING OF IN-HOUSE ASSET  


Basic meaning

71(1)    


For the purposes of this Part, an in-house asset of a superannuation fund is an asset of the fund that is a loan to, or an investment in, a related party of the fund, an investment in a related trust of the fund, or an asset of the fund subject to a lease or lease arrangement between a trustee of the fund and a related party of the fund, but does not include:

(a)    a life policy issued by a life insurance company; or

(b)    a deposit with an ADI; or


(ba) (Repealed by No 160 of 2000)

(c)    

an investment in a pooled superannuation trust, where a trustee of the fund and the trustee of the pooled superannuation trust acted at arm ' s length in relation to the making of that investment; or

(d)    an asset of a public sector fund, where the asset consists of an investment in securities issued under the authority of:


(i) the Commonwealth or a government of a State or a Territory; or

(ii) a public authority constituted by or under a law of the Commonwealth, a State or a Territory, where the public authority is neither a standard employer-sponsor, nor an associate of a standard employer-sponsor, of the fund; or

(e)    

an asset which the Regulator, by written notice given to a trustee of the fund, determines is not an in-house asset of the fund; or

(f)    

an asset which the Regulator, by legislative instrument, determines is not an in-house asset of:

(i) any fund; or

(ii) a class of funds in which the fund is included; or

(g)    

if the superannuation fund has no more than 6 members - real property subject to a lease, or to a lease arrangement enforceable by legal proceedings, between a trustee of the fund and a related party of the fund, if, throughout the term of the lease or lease arrangement, the property is business real property (within the meaning of subsection 66(5) ) of the fund; or

(h)    

an investment in a widely held unit trust; or

(i)    

property owned by the superannuation fund and a related party as tenants in common, other than property subject to a lease or lease arrangement between a trustee of the fund and a related party; or

(j)    

an asset included in a class of assets specified in the regulations:

(i) not to be in-house assets of any fund; or

(ii) not to be in-house assets of a class of funds to which the fund belongs.
For this purpose, a class of assets may consist of, but is not limited to, assets that are investments in entities that undertake, or do not undertake, specified activities.

Widely held trust

71(1A)    


For the purposes of paragraph (1)(h) , a trust is a widely held unit trust if:

(a)    it is a unit trust in which entities have fixed entitlements to all of the income and capital of the trust; and

(b)    it is not a trust in which fewer than 20 entities between them have:


(i) fixed entitlements to 75% or more of the income of the trust; or

(ii) fixed entitlements to 75% or more of the capital of the trust.

For this purpose, an entity and the Part 8 associates of the entity are taken to be a single entity.



Agreements

71(2)    


If:

(a)    apart from this subsection, an asset of a fund consists of a loan, an investment or an asset that is subject to a lease or lease arrangement, other than an in-house asset; and

(b)    the loan, investment, lease or lease arrangement was made as a result of entering into or carrying out an agreement; and

(c)    any of the persons who entered into or carried out the agreement was aware that the result of carrying out the agreement would be that:


(i) a loan would be made to, an investment would be made in, or an asset would be subject to a lease or lease arrangement with, a related party of the fund; or

(ii) an investment would be made in a related trust of the fund;

then the asset is taken, for the purposes of this Part, to be a loan to, an investment in, or an asset subject to a lease or lease arrangement with, that related party or related trust, as the case requires.



Definition

71(2A)    


In subsection (2) :

agreement
includes any arrangement, understanding, promise or undertaking whether express or implied, and whether or not enforceable, or intended to be enforceable, by legal proceedings.



Exceptions

71(2B)    


Subsection (2) does not apply to an investment referred to in paragraph 71(1)(a) , (b) , (c) or (h) .

2 or more persons

71(3)    


Subsection (2) does not stop the same asset from being treated as if it were a loan to, an investment in, or an asset subject to a lease or lease arrangement with, 2 or more persons.

The Regulator ' s determination

71(4)    


If:

(a)    

apart from this subsection, an asset of a fund consists of a loan, an investment, or an asset subject to a lease or lease arrangement, other than an in-house asset; and

(b)    

the Regulator, by written notice given to a trustee of the fund, determines that the asset is to be treated, with effect from the day on which the notice is given, as if the asset were a loan to, an investment in, or an asset subject to a lease or lease arrangement with, a specified related party or related trust of the fund, including a person taken to be a standard employer-sponsor of the fund under section 70A ;

then, despite paragraphs (1)(a) to (j) , the asset is taken, for the purposes of this Part, to be a loan to or an investment in the related party or related trust, or an asset subject to a lease or lease agreement between a trustee of the fund and the related party.



Paragraph (1)(e) determinations or paragraph (1)(j) regulations may be retrospective

71(5)    


A determination under paragraph (1)(e) or regulations under paragraph (1)(j) may be expressed to have taken effect at a time earlier than the time when the determination or regulations were made.

71(6)    
(Repealed by No 154 of 2007)



Public sector superannuation funds

71(7)    


For the purposes of applying this section to determine what is an in-house asset of a public sector superannuation fund, a reference to a Part 8 associate of an employer-sponsor of the fund is a reference to a body corporate in respect of which either of the following conditions is satisfied:

(a)    the body corporate is sufficiently influenced by, or a majority voting interest in the body corporate is held by, the employer-sponsor;

(b)    the employer-sponsor is sufficiently influenced by, or a majority voting interest in the employer-sponsor is held by, the body corporate.



Limit on when investments in related trusts are in-house assets

71(8)    


If, at a time:

(a)    an asset (the investment asset ) of a superannuation fund is an investment in a related trust of the fund; and

(b)    

the related trust is one described in paragraph 67A(1)(b) in connection with a borrowing, by the trustee of the fund, that is covered by subsection 67A(1) ; and

(c)    

the only property of the related trust is the acquirable asset mentioned in that paragraph;

the investment asset is an in-house asset of the fund at the time only if the acquirable asset mentioned in that paragraph would be an in-house asset of the fund if it were an asset of the fund at the time.


71(9)    


Subsections (1) , (2) and (4) have effect subject to subsection (8) .



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