Tax Laws Amendment (2007 Measures No. 4) Act 2007 (143 of 2007)

Schedule 3   Investment by superannuation funds in instalment warrants

Superannuation Industry (Supervision) Act 1993

1   Before subsection 67(5)

Insert:

Exception - instalment warrants

(4A) Subsection (1) does not prohibit a trustee (the RSF trustee ) of a regulated superannuation fund from borrowing money, or maintaining a borrowing of money, under an arrangement under which:

(a) the money is or has been applied for the acquisition of an asset (the original asset ) other than one the RSF trustee is prohibited by this Act or any other law from acquiring; and

(b) the original asset, or another asset (the replacement ) that:

(i) is an asset replacing the original asset or any other asset that met the conditions in this subparagraph and subparagraph (ii); and

(ii) is not an asset the RSF trustee is prohibited by this Act or any other law from acquiring;

is held on trust so that the RSF trustee acquires a beneficial interest in the original asset or the replacement; and

(c) the RSF trustee has a right to acquire legal ownership of the original asset or the replacement by making one or more payments after acquiring the beneficial interest; and

(d) the rights of the lender against the RSF trustee for default on the borrowing, or on the sum of the borrowing and charges related to the borrowing, are limited to rights relating to the original asset or the replacement; and

(e) if, under the arrangement, the RSF trustee has a right relating to the original asset or the replacement (other than a right described in paragraph (c)) - the rights of the lender against the RSF trustee for the RSF trustee's exercise of the RSF trustee's right are limited to rights relating to the original asset or replacement.