Issue
Has a contravention of section 66 of the Superannuation Industry (Supervision) Act 1993 (SISA) occurred where the superannuation fund purchased unlisted shares from a member?
Decision
Yes. A contravention of section 66 of SISA has occurred.
Facts
The trustee of a superannuation fund purchased shares in a company from a member of the fund.
The company's shares were unlisted.
Reasons for Decision
Section 66 of the SISA generally prohibits acquisitions of assets from members of regulated superannuation funds. Listed securities are one exception to this general prohibition.
Listed security is defined in section 66(5) of the SISA as: '(a) a share; (b) a unit; (c) a bond or debenture; (d) a right or option; or (e) any other security; listed in the official list of a stock exchange in Australia, an approved stock exchange within the meaning of section 470 of the Income Tax Assessment Act 1936 or an exempt stock market within the meaning of section 771 of the Corporations Act 2001 .'
The company shares do not meet the definition of 'listed security' under section 66(5) of the SISA. Therefore, the purchase of the member's shares in the company by the fund is a contravention of section 66 of the SISA.