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SUPERANNUATION INDUSTRY (SUPERVISION) (APPROVAL OF TRUSTEES) REGULATIONS 1993 NO. 373

SUPERANNUATION INDUSTRY (SUPERVISION) (APPROVAL OF TRUSTEES) REGULATIONS 1993 NO. 373

EXPLANATORY STATEMENT

STATUTORY RULES 1993 No. 373

ISSUED BY THE AUTHORITY OF THE TREASURER

Superannuation Industry (Supervision) Act 1993

Superannuation Industry (Supervision) (Approval of Trustees) Regulations

The Superannuation Industry (Supervision) Act 1993 (the Act) provides for the prudent management of certain superannuation funds, approved deposit funds and pooled superannuation trusts and for their supervision by the Insurance and Superannuation Commissioner. The basis for supervision is that those funds and trusts are subject to regulation under the Commonwealth's powers with respect to corporations or pensions (for example, because the trustee is a corporation). In return, the supervised funds and trusts may become eligible for concessional taxation treatment under the Income Tax Assessment Act 1936.

Section 353 of the Act provides that the Governor-General may make Regulations for the purposes of the Act.

All approved deposit funds, and public offer entities that wish to accept new members, must have an approved trustee. Section 23 of the Act provides that a constitutional corporation may apply to the Commissioner for approval as a trustee. An application must be in the approved form, contain the information required by the form, and be accompanied by an application fee of the prescribed amount. The regulations would prescribe a $500 application fee. This amount is calculated to recover the costs associated with processing the applications.

The regulations would also prescribe, for the purposes of subparagraphs 26(1)(b)(i) and (ii) of the Act, $5 million as the minimum net tangible assets (NTA) that the applicant should have, or a bank guarantee or equivalent Government commitment for this amount.

The regulations have been developed in consultation with representatives of the superannuation industry and related professional organisations.

The regulations are described in detail in the attachment.

The regulations commence on gazettal.

ATTACHMENT

Superannuation Industry (Supervision) (Approval of Trustees) Regulations

Regulation 1 - Citation

Regulation 1 provides that the regulations may be cited as the Superannuation Industry (Supervision) (Approval of Trustees) Regulations. The proposed regulations commence on gazettal.

Regulation 2 - Interpretation

Regulation 2 provides that the term 'the Act' in the regulations means the Superannuation Industry (Supervision) Act 1993.

Regulation 3 - Application for approval of trustee

Regulation 3 provides, for the purposes of paragraph 23(2)(c) of the Act, that the prescribed application fee is $500.

Background

Pursuant to section 23 of the Act, an application for approval as a trustee for the purposes of the Act must be in the approved form contain the information required by the form and be accompanied by an application fee of the prescribed amount.

The regulation specifies a fee of $500.

Regulation 4 - Deciding an application for approval as a trustee

Regulation 4 provides, for the purposes of subparagraphs 26(1)(b)(i) and (ii) of the Act, the amount of $5,000,000 is prescribed.

Background

The Act, requires all approved deposit funds, and public offer entities that wish to accept new members, to have an approved trustee.

The Treasurer announced in his 'Strengthening Super Security' statement that trustees of approved deposit funds would be required to have minimum net tangible assets (NTA) of $5 million, or a bank guarantee or equivalent Government commitment for this amount.

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