Document ID: chunk:federal_register_of_legislation:F2025L00184:reg:19:p1
Version: federal_register_of_legislation:F2025L00184
Segment Type: reg
Provision Reference: reg 19 (pt 1/2)
Character Range: 26684–29364

19  Investment limitations

 (1) A community charity's investments must be made and maintained on an *arm's length basis, unless another provision of this instrument allows otherwise.
Penalty: 30 penalty units.

 (2) The trustee or corporate director of a community charity must not give, or otherwise authorise the giving of, a security over, or in relation to, an asset of the charity.
Penalty: 30 penalty units.

 (3) However, subsection (2) does not apply to:
 (a) a financial instrument excluded by the Commissioner from that subsection in relation to the charity; or
 (b) an agreement to guarantee the repayment of any money lent by an *arm's length creditor (including any related unpaid interest or fees) for the sole benefit of one or more *deductible gift recipients to which the charity may make a distribution.

 (4) A community charity:
 (a) must not acquire an asset (except by way of gift) from; and
 (b) must not make a loan or provide any other kind of financial assistance to:
a founder of the charity, a *relative of the founder, a donor to the charity, a *relative of the donor, the trustee or corporate director of the charity, a director of the trustee, an officer, agent, *member or employee of a trustee or a *community charity corporation, or an *associate of any of those entities, except:
 (c) by way of an *arm's length commercial transaction; or
 (d) on terms each of which is more favourable to the charity than would otherwise be expected under an arm's length transaction.
Penalty: 30 penalty units.

 (5) The trustee or corporate director must keep the assets of the community charity separate from all other assets.
Penalty: 30 penalty units.

 (6) However, subsection (5) does not prevent a licensed trustee company (within the meaning of the Corporations Act 2001) or the public trustee of a State or Territory from operating common funds for investment purposes.

 (7) A community charity may only acquire an asset that is a *collectable (or would be a collectable but for the asset not being used or kept mainly for an entity's personal use or enjoyment):
 (a) by way of gift; or
 (b) if the acquisition is in the direct course or furtherance of a purpose of the charity as covered by paragraph 30‑110(3)(c) or subsection 30-110(4) of the ITAA 1997.
Penalty: 30 penalty units.
 (8) If the charity acquires an asset mentioned in subsection (7) by way of gift, unless the asset is used or kept mainly for a purpose or activity of a fund, authority or institution mentioned in the table in subsection 30-100(1) of the ITAA 1997 (cultural organisations), the charity must sell or distribute the asset within 12 months after acquiring it.
Penalty: