Govt validates instalment warrants within super
The Federal Government has moved to validate the investment scope of self-managed superannuation funds by legislating to allow them to continue investing in instalment warrants.
The Assistant Treasurer, Peter Dutton, said the Government had decided to legislate to allow such investments following consultation with the industry.
He said the Government had sought comment on the underlying assets over which instalment warrants might be written, the risk to which a superannuation fund was exposed, the suitability of instalment warrants as a retirement savings investment product and the gearing levels, contractual terms and liquidity of instalment warrants.
Dutton said following this consultation it had been decided to legislate to allow superannuation funds to invest in instalment warrants of a limited recourse nature over any asset a fund would be permitted to invest in directly.
The Minister said the Government’s move would effectively restore the situation that existed before the Australian Taxation Office and the Australian Prudential Regulation Authority determined that instalment warrants entailed a borrowing.
AUTHOR
Mike Taylor
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