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What is the practical effect of this change?
10/02/2010
Newly registered SMSFs can still accept contributions and rollovers. They will still qualify as complying super funds retrospectively from the date of their establishment (assuming of course that they are registered within the required time, there are no serious contraventions of the SIS operating standards, and the annual return is lodged).
However, transfers from retail and industry funds will take longer, more information will have to be provided, and the whole process is likely to be more tedious.
The Australian Prudential Regulation Authority will soon release guidelines for retail and industry funds as to how they should process transfer requests to newly established SMSFs.
We suspect that the guidelines will require the transferring fund:
- not to implement a transfer request until the SMSF appears on the Super Lookup register, and
- to obtain more information in relation to the member requesting the transfer and the SMSF so as to ensure the request is legitimate (ie the request is not from someone posing as the member), and that the SMSF is not being used as a device for illegal early release schemes.
