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ARTICLE · 16 SEPTEMBER 2020

SMSFs and derivatives - a potential diversification option

Townsends Business & Corporate Lawyers
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SMSF trustees should carefully observe the relevant compliance requirements for investing in derivatives.

AustraliaFinance and Banking
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Investing in derivatives has been one of the popular investment options for savvy investors. As the ATO has been posing the question to some SMSF trustees whether their investments are appropriately diversified, do derivatives provide legitimate diversification opportunities for SMSFs?

In a nutshell, superannuation laws do not prohibit this type of investment, however SMSF trustees should carefully observe the relevant compliance requirements.

Are you investing in derivatives?

Derivatives transactions include a broad assortment of instruments such as options, futures, warrants, swaps or Contracts for Difference (CFDs). A derivative is fundamentally a contract between parties where the value of the contract is 'derived' from that of the particular asset(s) the contract is linked to.

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