Super and accounting bodies have applauded the Australian Securities and Investments Commission’s (ASIC’s) guidelines on art and collectibles in self-managed super funds (SMSFs) released this week.
However, they would prefer amendments to the proposals that would provide more clarity around the scope of the rules.
ASIC released draft regulations on how an SMSF can make, hold or sell investments in collectables and personal use assets. In stepping away from the Cooper Review’s proposed ban of such assets within SMSFs, the draft guidelines were welcomed by the Self-Managed Super Fund Professionals’ Association (SPAA), the Association of Superannuation Funds of Australia (ASFA) and the Institute of Public Accountants (IPA).
“The SPAA believes SMSFs should have freedom of investment choice and, as such, we are pleased that they will continue to be permitted to invest in collectables, such as artwork,” said SPAA chief executive, Andrea Slattery.
She said the draft regulations provided much needed clarity for SMSF members. However, she said while the proposed draft regulations will allow items to be stored on the premises of a related party as long as it was not the private residence of a fund member, the SPAA proposed a blanket ban on related party transactions.
ASFA was conscious that the regulatory framework around SMSFs must be appropriate, said ASFA chief executive, Pauline Vamos. She said ASFA was concerned that there was scope for abuse where there was the ability to store assets on the premises of a related party.
“This will need to be monitored properly. The public policy is such that this is about putting away for retirement and not getting an immediate benefit,” said Vamos. “The last thing we want is the reputation of the SMSF sector to be tarnished, so the more the rules are objective, aligned with public policy and retirement outcomes, the better the sector.”
She added that the association believed that some of the regulations were quite broad, “particularly the listing of memberships of sporting or socials clubs”.
IPA head of superannuation and financial services Reece Agland said the institute was happy with the release of the guidelines, although it appeared that some assets were covered while others were not. He said there needed to be more clarity around the scope of assets that can be held in SMSFs.
Vamos said the regulators needed to get it right now so that an “over-the-top” reaction was not necessary a few years down the line to stop a major consumer issue.
