Superannuation Industry (Supervision) Act 1993

PART 10 - PROVISIONS APPLYING ONLY TO APPROVED DEPOSIT FUNDS  

SECTION 95   BORROWING  

95(1)   [Prohibition]  

Except with the approval of APRA under subsection (2) or except as provided by subsection (3), the trustee of an approved deposit fund must not borrow money.

95(2)   [APRA may approve borrowing]  

APRA may approve a borrowing by the trustee of an approved deposit fund if the trustee satisfies APRA that special circumstances exist that justify the borrowing.

95(3)   [Circumstances where borrowing allowed]  

Subsection (1) does not prohibit the trustee of an approved deposit fund from borrowing money if:

(a) the purpose of the borrowing is to enable the trustee to cover settlement of a transaction for the acquisition of any of the following:

(i) bonds, debentures, stock, bills of exchange or other securities;

(ii) shares in a company;

(iii) units in a unit trust;

(iv) futures contracts;

(v) forward contracts;

(vi) interest rates swap contracts;

(vii) currency swap contracts;

(viii) forward exchange rate contracts;

(ix) forward interest rate contracts;

(x) a right or option in respect of such a security, share, unit, contract or policy;

(xi) any similar financial instrument;

(xii) foreign currency; and

(b) both:

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

(ii) the borrowing is not taken, under a determination made, by legislative instrument, by APRA, to be exempt from this paragraph; and

(c) the period of the borrowing does not exceed 7 days; and

(d) if the borrowing were to take place, the total amount borrowed by the trustee would not exceed 10% of the value of the assets of the fund.

95(4)    
(Repealed by No 154 of 2007)

95(5)   [Civil penalty]  

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.