Superannuation New Investment Rules: Application To Instalment Receipts And Similar Arrangements

Concerns have been expressed that, under the new investment rules contained in the Superannuation Legislation Amendment Bill (No 4) 1999, the definition of related trust could have an unintended effect of applying to shares held under a trust arrangement as part of an instalment receipt, such as those used in the first sale of Telstra shares, or similar arrangements.

To address these concerns, the Government will ensure that the definition of related trust will not include a trust that arises because the trustee of a fund makes an investment under which a listed security is held in trust until the purchase price of the security is paid and where the underlying security and the property derived from the underlying security is the only property of the trust. This exception from the definition of a related trust will not apply if an investment in the underlying security would be an in-house asset of the fund.

The Government will introduce a legislative amendment to achieve this outcome.

CANBERRA
1 September 1999