Document ID: chunk:federal_register_of_legislation:C2025C00134:section:67:p1
Version: federal_register_of_legislation:C2025C00134
Segment Type: section
Provision Reference: s 67 (pt 1/2)
Character Range: 450456–453201

67  Borrowing

Prohibition
 (1) Subject to this section and section 67A, a trustee of a regulated superannuation fund must not:
 (a) borrow money; or
 (b) maintain an existing borrowing of money.
Note 1: Section 67A contains an exception for certain limited recourse borrowing arrangements.
Note 2: Section 166 imposes an administrative penalty for a contravention of subsection (1) in relation to a self managed superannuation fund.

Exception—temporary borrowing to pay beneficiary
 (2) Subsection (1) does not prohibit a trustee of a regulated superannuation fund from borrowing money if:
 (a) the purpose of the borrowing is to enable the trustee to make a payment to a beneficiary which the trustee is required to make by law or by the governing rules and which, apart from the borrowing, the trustee would not be able to make; and
 (b) the period of the borrowing does not exceed 90 days; and
 (c) if the borrowing were to take place, the total amount borrowed by the trustee would not exceed 10% of the value of the assets of the fund.
 (2A) Subsection (1) does not prohibit a trustee of a regulated superannuation fund from borrowing money if:
 (a) the purpose of the borrowing is to enable the trustee to make a payment of surcharge or advance instalment which the trustee is required to make under the Superannuation Contributions Tax (Assessment and Collection) Act 1997 and which, apart from the borrowing, the trustee would not be able to make; and
 (b) the period of the borrowing does not exceed 90 days; and
 (c) if the borrowing were to take place, the total amount borrowed by the trustee would not exceed 10% of the value of the assets of the fund.

Exception—temporary borrowing to cover settlement of securities transactions
 (3) Subsection (1) does not prohibit a trustee of a regulated superannuation fund from borrowing money if:
 (a) the purpose of the borrowing is to enable the trustee to cover settlement of a transaction for the acquisition of any of the following:
 (i) bonds, debentures, stock, bills of exchange or other securities;
 (ii) shares in a company;
 (iii) units in a unit trust;
 (iv) futures contracts;
 (v) forward contracts;
 (vi) interest rates swap contracts;
 (vii) currency swap contracts;
 (viii) forward exchange rate contracts;
 (ix) forward interest rate contracts;
 (x) a right or option in respect of such a security, share, unit, contract or policy;
 (xi) any similar financial instrument;
 (xii) foreign currency; and
 (b) both:
 (i) at the time the relevant investment decision was made, it was likely that the borrowing would not be needed; and
 (ii) the borrowing is not taken, under a determination made, by legislative instrument, by the Regulator, to be exempt from this paragraph;