Exposure Draft - Corporations Amendment Regulations 2010 (No. ) - Limited Recourse Borrowings by Superannuation Funds (Instalment Warrants)

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Abstract:

On 10 March 2010, the Minister for Financial Services, Superannuation and Corporate Law announced that the Government proposes to amend the Corporations Regulations 2001 to provide that certain borrowing arrangements by superannuation fund trustees permitted by the Superannuation Industry (Supervision) Act 1993 (the SIS Act) are financial products under the Corporations Act 2001 (Principal Act).

Generally, superannuation funds are not permitted to borrow funds except in limited circumstances. Superannuation funds are regulated under the SIS Act. Limited recourse borrowing arrangements, such as instalment warrants, are one of the exceptions permitted under the SIS Act, under subsection 67(4A).

The proposed Corporations Amendment Regulations 2010 (No.)(proposed Regulations) would make limited recourse borrowing arrangements financial products under the Principal Act when entered into by regulated superannuation funds.

The proposed Regulations amend the Corporations Regulations 2001 to provide that:

• limited recourse borrowing arrangements are financial products under the Principal Act when acquired by superannuation funds;
• limited recourse borrowing arrangements are not a credit facility under the Principal Act when acquired by superannuation funds; and
• an Australian Financial Services Licence covering derivatives is taken to also cover limited recourse borrowing arrangements.

Making a submission

Interested parties are invited to comment on the proposed Regulations. While submissions may be lodged electronically or by post, electronic lodgement is preferred. For accessibility reasons, please submit responses sent via email in a Word or RTF format. An additional PDF version may also be submitted.

All information (including name and address details) contained in submissions will be made available to the public on the Treasury website unless you indicate that you would like all or part of your submission to remain in confidence. Automatically generated confidentiality statements in emails do not suffice for this purpose. Respondents who would like part of their submission to remain in confidence should provide this information marked as such in a separate attachment. Legal requirements, such as those imposed by the Freedom of Information Act 1982, may affect the confidentiality of your submission.

Closing date for submissions: Friday, 25 June 2010

Address written submissions to:
Manager
Investor Protection Unit
Corporations and Financial Services Division
The Treasury
Langton Crescent
PARKES ACT 2600

Email: instalmentwarrantcorpregs@treasury.gov.au

For enquiries please call (02) 6263 3125.

Documents Available:

 Acrobat (PDF)

 Microsoft Word (RTF)

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