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SUPERANNUATION INDUSTRY (SUPERVISION) ACT 1993 - SECT 65

Lending to members of regulated superannuation fund prohibited

Prohibition

  (1)   A trustee or an investment manager of a regulated superannuation fund must not:

  (a)   lend money of the fund to:

  (i)   a member of the fund; or

  (ii)   a relative of a member of the fund; or

  (b)   give any other financial assistance using the resources of the fund to:

  (i)   a member of the fund; or

  (ii)   a relative of a member of the fund.

Note:   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

  (2)   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:

  (a)   had express power to lend money to members; or

  (b)   lent money to members and that lending was not expressly prohibited by the governing rules of the fund.

Exception--public sector funds

  (3)   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:

  (a)   had express power to lend money to members; or

  (b)   lent money to members and that lending was not expressly prohibited by the governing rules of the fund.

Variation of governing rules

  (4)   If:

  (a)   subsection   (2) or (3) applies to a regulated superannuation fund; and

  (b)   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:

  (c)   limits the power to lend the fund's money to members; or

  (d)   removes the power to lend the fund's money to members.

Civil penalty provision

  (5)   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

  (7)   Nothing in Part   8 limits the operation of this section.



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