Lending to members of regulated superannuation fund prohibited
65 Lending to members of regulated superannuation fund prohibited
Prohibition
A trustee or an investment manager of a regulated superannuation fund must not:
lend money of the fund to:
a member of the fund; or
a relative of a member of the fund; or
give any other financial assistance using the resources of the fund to:
a member of the fund; or
a relative of a member of the fund.
Section 166 imposes an administrative penalty for a contravention of subsection (1) by a trustee in relation to a self managed superannuation fund.
Exception—private sector funds
Subsection (1) does not prohibit the lending of money of a private sector fund established before 16 December 1985 to a member if the trustee of the fund, on or before that date:
had express power to lend money to members; or
lent money to members and that lending was not expressly prohibited by the governing rules of the fund.
Exception—public sector funds
Subsection (1) does not prohibit the lending of money of a public sector fund established before 25 May 1988 to a member if the trustee of the fund, on or before that date:
had express power to lend money to members; or
lent money to members and that lending was not expressly prohibited by the governing rules of the fund.
Variation of governing rules
If:
subsection (2) or (3) applies to a regulated superannuation fund; and
at the beginning of the fund’s 1994‑95 year of income, a provision included in the governing rules of the fund authorised the lending of the fund’s money to members;
a variation of that provision is void unless the variation:
limits the power to lend the fund’s money to members; or
removes the power to lend the fund’s money to members.
Civil penalty provision
Subsection (1) is a civil penalty provision as defined by section 193, and Part 21 therefore provides for civil and criminal consequences of contravening, or of being involved in a contravention of, that subsection.
Effect of Part 8
Nothing in Part 8 limits the operation of this section.
This Act’s bill:Second reading speech
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