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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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