STATUTORY RULES
1973 No.
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REGULATION UNDER THE SUPERANNUATION ACT 1922-1971.*
I, THE GOVERNOR-GENERAL in and over the Commonwealth of Australia, acting with the advice of the Federal Executive Council and on the recommendation of the Superannuation Board, hereby make the following Regulation under the Superannuation Act 1922-1971.
Dated this fifth day of April, 1973.
Paul Hasluck
Governor-General
By His Excellency’s Command,
Treasurer.
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Amendment of the Superannuation Regulations†
After regulation 4 of the Superannuation Regulations the following regulation, is inserted:—
Investment of moneys of the Fund in debentures.
“ 4a. (1) For the purposes of paragraph (a) of sub-section (4) of section 12 of the Act, an investment of moneys of the Fund in debenture of a kind referred to in paragraph (d) of sub-section (2) of that section is permitted if, before making the investment, the Board obtains and considers advice from an expert adviser as to the suitability for the Fund, having regard to the purposes of the Fund, of the proposed investment.
“ (2) In sub-regulation (1), ‘ expert adviser ’, in relation to a proposed investment, means a person (including a body corporate) whom the Board, having regard to the competence and experience in financial matters of the person, chooses to give advice to the Board in relation to that proposed investment, but does not include a person who is a member, or a deputy of a member, of the Board or a member of the staff of the Board.”.
* Notified in the Commonwealth Gazette on 1973.
† Statutory Rules 1960, No. 68 as amended by Statutory Rules 1962, No. 14; 1963. Nos. 51 and 118; 1964, No. 73; 1965, Nos. 5, 136 and 182; 1966, Nos. 38, 67, 96 and 113; 1967, Nos. 15, 23, 83 and 147; 1968, Nos. 48, 71 and 135; 1969, Nos. 105 and 204; 1970, Nos. 4, 112. 173 and 211; 1971, Nos. 5 and 115; and 1972, Nos. 73 and 120.
Printed by Authority by the Government Printer of the Commonwealth of Australia
10728/73—Price 5c 9/1.2.1973
Overview
The Superannuation Regulations 1973, made under the Superannuation Act 1922-1971, were enacted to address specific gaps in the regulatory framework governing the investment of funds within the Superannuation system. The Superannuation Board, acting with the advice of the Federal Executive Council and on the recommendation of the Governor-General, introduced these regulations to ensure that investments made by the Fund, particularly in debentures, were suitable and aligned with the purposes of the Fund. By requiring the Board to obtain and consider advice from an expert adviser before making such investments, the regulations aimed to safeguard the financial stability and integrity of the Superannuation Fund. This legislative instrument underscores the importance of informed decision-making in financial investments to protect the interests of superannuation beneficiaries.
Scope and Application
The Superannuation Regulations, as amended in 1973, pertain to the management of funds within the superannuation framework in Australia. These regulations apply to the Board responsible for administering the Superannuation Fund, specifically in relation to the investment of the Fund’s moneys in debentures. The Board is required to obtain expert advice before making any such investments, ensuring that they align with the purposes of the Fund. The expert adviser must be selected based on their competence and experience in financial matters, and they must not be a member of the Board, a deputy of a Board member, or a member of the Board’s staff. This regulation ensures that investment decisions are made prudently and in the best interest of the Fund’s beneficiaries. The jurisdictional reach of these regulations is national, applying across the Commonwealth of Australia, and they extend the application of the Superannuation Act by providing detailed rules on how investments in debentures can be made.
Key Provisions
The key operative sections of this legislation, found under the Superannuation Regulations, are particularly focused on the investment of superannuation funds. Regulation 4a, introduced in this statutory rule, mandates that before the Superannuation Board invests in debentures of a specific kind, they must obtain and consider advice from an expert adviser (subsection (1)). The term "expert adviser" is defined in subsection (2) as a person chosen by the Board for their competence and experience in financial matters, excluding any Board members, their deputies, or Board staff. This regulation is designed to ensure that investments made with superannuation funds are suitable and aligned with the purposes of the Fund.
The obligations and requirements imposed by this Act on the Superannuation Board include the necessity to seek expert advice before making certain investments. The Board must identify and consult an expert adviser, who must possess the requisite competence and experience in financial matters. This expert adviser must then provide advice on the suitability of the proposed investment, ensuring that the decision aligns with the objectives of the superannuation fund. Furthermore, the adviser must be independent of the Board to maintain the integrity of the advice provided.
There are no explicit offences, penalties, or consequences detailed in the text for non-compliance with this regulation. However, the potential for financial mismanagement or inappropriate investments could lead to broader legal and regulatory scrutiny. Failure to follow the stipulated process of seeking expert advice could result in the Fund being exposed to unsuitable investments, which might not meet the statutory objectives of the Superannuation Act. Such outcomes could lead to legal challenges, financial losses, or reputational damage for the Board, necessitating adherence to the prescribed guidelines.