Derivative Risk Statement for SMSF

What is a derivative?

A derivative is defined as a “financial contract whose value depends on, or is derived from assets, liabilities or indices (‘the underlying asset’)”. Derivative Transactions include a broad assortment of instruments such as forwards, futures, options, share ratios, warrants, swaps and other composites.

Can my Self Managed Superannuation Fund invest in derivatives?

The Law Central Self Managed Superannuation Fund Trust Deed allows this type of investment. Ensure that your Investment Strategy also permits this.

Do I need a Derivatives Risk Statement for Derivatives?

The Derivate Risk Statement (DRS) for Derivatives is used by Self Managed Superannuation Funds (SMSF) in conjunction with their Investment Strategy. Where SMSF trustees want to invest in derivatives, the DRS will assist formalising and formulating control processes. However, if a SMSF wants to undertake a derivative transaction on an Australian or international exchange, and in doing so creates a charge over the assets of the Fund, then it is a Superannuation Industry Supervision (SIS) Regulations requirement that a DRS is prepared.

A DRS assists to document the Trustee’s proper consideration of risk and risk management in relation to SMSF investment in derivatives.

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Fund Details
• What is the name of the Self Managed Superannuation Fund?
• When was my Deed signed?
Trustee Details
• Who is the Trustee?
• Who do I find out the Trustees names?
• What if one of the original Trustees has been removed?
• What if a Trustee has been added?
Corporate Trustee
• What if I have a human trustee?
Human Trustee
• What if I have a Corporate Trustee?

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Fund Details

• What is the name of the Self Managed Superannuation Fund?

  This is the name that is on your original Self Managed Superannuation Fund Deed.
  
  If you have amended the name of your Self Managed Superannuation Fund then it is the amended name of the Fund.

  This hint is provided by Peter Bobbin (Argyle Lawyers).

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• When was my Deed signed?

  The date that your Self Managed Superannuation Fund Deed was signed is the date in the original Deed when the Trustees signed the document. This date is usually near the Trustees' signatures at the back of the Deed. However, sometimes the date is on the first page of the document.

  This hint is provided by Peter Bobbin (Argyle Lawyers).

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Trustee Details

• Who is the Trustee?

  Either the individual fund members or a company of which the fund members are directors.

  This hint is provided by Peter Bobbin (Argyle Lawyers).

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• Who do I find out the Trustees names?

  An easy way to determine who the Trustees are is to look at the signing clause at the back of the original Deed of the Superannuation Fund. All the Trustees have to sign the original Superannuation Fund Deed. This assumes the Trustees have not changed since the date of the original deed.
  
  If the Trustee is a company then the Directors of the company should have signed the original Superannuation Fund Deed.

  This hint is provided by Peter Bobbin (Argyle Lawyers).

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• What if one of the original Trustees has been removed?

  If you have at any time have removed Trustees from your Self Managed Superannuation Fund then you include only the current Trustees of the Superannuation Fund.

  This hint is provided by Peter Bobbin (Argyle Lawyers).

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• What if a Trustee has been added?

  Then you include all original trustees and the new trustee.

  This hint is provided by Peter Bobbin (Argyle Lawyers).

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Corporate Trustee

• What if I have a human trustee?

  You will need to click on "back" and change the trustee to human.

  This hint is provided by Peter Bobbin (Argyle Lawyers).

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Human Trustee

• What if I have a Corporate Trustee?

  If you have a corporate trustee you will need to click on "back" and change the trustee to corporate.

  This hint is provided by Peter Bobbin (Argyle Lawyers).

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This document has been prepared by Peter Bobbin (Argyle Lawyers)