Property 101: SMSFs and APRA’s regulatory umbrella

Property 101: SMSFs and APRA’s regulatory umbrella
Property 101: SMSFs and APRA’s regulatory umbrella

The idea the SMSF sector is largely unregulated is a myth according to SMSF Association head of policy Jordan George, who said the fact self-managed super funds (SMSFs) don’t come under APRA’s regulatory umbrella often gives this false impression.

He said the SMSF sector is rigorously regulated by two key Government agencies: the Australian Taxation Office (ATO), which administers the relevant superannuation laws for SMSFs, and the Australian Securities & Investments Commission (ASIC), which regulates financial services to protect consumers and registers SMSF auditors. 

The ATO is the key regulator for the SMSF sector. Its role includes: 

·       Verifying that a fund’s primary purpose is to pay retirement benefits to members;

·       Providing information and forms to assist trustees set up and manage a fund;

·       Checking that funds are compliant with the superannuation laws;

·       Taking enforcement action when the laws are breached;

·       Ensuring SMSF auditors perform their duties to the required standard.

"The ATO has proved a highly effective regulator," he said. 

"The evidence for this is the high compliance rate among SMSFs, with 98 percent of funds annually meeting their obligations under the superannuation laws.

"ASIC’s prime responsibility is to ensure that all SMSFauditors are registered, as well as meeting other eligibility requirements, including holding a tertiary accounting qualification or equivalent, meeting a fit and proper test, and holding professional indemnity insurance.

"The “unregulated or lack of regulation” myth that continues to pervade SMSFs flies in the face of the findings of the Cooper and Murray inquiries, both of which gave the sector a clean bill of health.

“Leaving aside Murray’s recommendation to ban LRBAs, neither inquiry found there was any systemic issue threatening the viability of the SMSF sector – further evidence that the regulatory regime is working effectively.”


 
Tags: 
Smsfs APRA

Community Discussion

Be the first one to comment on this article
What would you like to say about this project?