Anti Money Laundering Act - How it affects SMSF Trustees

You may have already heard of the new Anti Money Laundering Act. This act was passed in 2006, however does not come into effect until 12^th December 2007, you are about to hear and read a lot more about the consequences of these new regulations.

The new laws require businesses that provide certain financial or gambling services, or those involved in bullion dealing, to:

• identify their customers before providing a service
• report certain transactions, and
• report suspicious matters.

As a customer you will be affected in a range of circumstances, including:

• opening an account with a bank or other financial institution
• obtaining a loan
• buying traveller's cheques
• sending, receiving or transferring funds electronically
• undertaking a gambling cash transaction of $10,000 or more
• buying or selling bullion, and
• withdrawing superannuation benefits.

As trustee of a SMSF you may be asked to provide different forms of identification. The level of identification required will depend on the risk level of the transaction. A low risk transaction may involve as little as producing a driver's licence. However, a higher risk transaction might require more customer information. The identification obligat

ions come into force on 12th December 2007.

Most fund managers will be bringing out new Product Disclosure Statements (PDS's) / Prospectuses over the next month to provide details to investors about these new rules and the steps that are required to make an investment.

You will be able to get an "Acceptable Referee" such as a teacher, doctor, lawyer or JP to provide an identification check.

We are noticing many buy-backs / consolidation entities using these provisions of the new act to reduce their risk.

We suggest that trustees of SMSF's should contact their accountants and arrange a letter of identification for trustees on their letterhead listing all the associated entities of the SMSF.

Rudd Govt. inherits 360,000 Self Managed Superannuation Funds - some interesting figures

Some Interesting Statistics

In the July 2007 quarter alone, contributions of around $42.2 billion made to super accounts across Australia.

Total superannuation assets in Australia now stand at $1.15 trillion and self managed super funds hold close to a quarter of those assets, around $287.7 billion.

At the end of June 2007, there were around 360,000 self managed super funds representing the interests of around 690,000 people.

47,825 self managed super funds were registered between October 2006 and September 2007. That's an average of 3,600 each month.

In June 2007, new SMSF registered 11,432 (attributed to the new super environment and the one-off opportunity to make an after-tax (or non-concessional) contribution of up to $1 million into super.)

Average self managed super fund balance is $362,000 for 2005-06.

There will be a significant increase in ATO audits and reviews with 10,975 planned for 2007-08 year.

54 auditing firms (entities) are responsible for the completion of over 25,000 self managed super fund audits in 2005 -06.

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