Media release provides enlightening on new regulations
A joint "Campaign Media Release" was issued on Friday July 30th by the Minister for Financial Services; Superannuation and Corporate Law (Chris Bowen) and the Minister for Environment Protection, Heritage and the Arts (Peter Garrett).
The media release stated that "from 1 July 2011 collectables and personal use assets owned by self managed superannuation funds (SMSFs) must be stored according to new rules to prevent them from giving rise to a personal benefit."
On the face of things, it's odd that thousands of Australians would actively welcome new regulations being introduced by the Commonwealth Government, however that is indeed the case with this announcement.
The resounding response of those with some interest in the topic is that these new regulations are not a restriction of personal freedom, nor an additional layer of red tape that SMSF trustees will need to tangle with, but rather a prudent series of practical steps that, when followed, will satisfy certain members of Australia's regulatory framework that tangible assets acquired through an SMSF are indeed being bought and sold solely to provide for retirement benefits, rather than for reasons of personal use.
This announcement now confirms that that the status quo of SMSF's being permitted to hold and trade tangible assets will remain, despite the rather large scare that the Cooper Review put through the numismatic, art, wine, philatelic and collectible communities.
This news complements earlier written commitments from the Federal Liberal Party and the Greens Party (also issued via press release) that Mr Cooper's recommendations would not be enacted should they obtain power via the election on August 21st.
This is welcome news for those of us that hold tangible assets as part of our SMSF portfolios, and should herald a slightly more structured approach to investment in these areas in future.
That there has been such a resounding response to Mr Cooper's suggestion that SMSF trustees be banned from investing in tangible assets is surely validation of tangible assets as an investment class, which is a solid step forward.
The fact that new regulations governing storage and access are being introduced leads me to believe that we'll be seeing SMSF trustees approaching their investments in these fields in a more structured way. This has the potential to remove or at least emotion, impulse and outright stupidity when it comes to decision making on asset allocation by SMSF trustees, which has to be an excellent outcome.