COMPLIANCE
SMSFs by the letters Two new compliance requirements have recently been introduced into the Australian corporation and financial services landscape. Bryan Ashenden highlights how it is currently unclear as to the effect they will have on the operation of SMSFs.
BRYAN ASHENDEN is head of financial literacy and advocacy at BT Financial Group.
With NALI (non-arm’s-length income), NALE (nonarm’s-length expenditure), BRP (business real property) and LRBAs (limited recourse borrowing arrangements) already part of the SMSF vernacular, it would seem the world of SMSFs is already one full of acronyms. But now we have another two to add to the list of considerations – DDO (design and distribution obligations) and DIN (director identification number). From 5 October 2021, product issuers and distributors have broadly been required to comply with the new DDO regime. Furthermore, from 1 November 2021, the new DIN requirements commence with some transitional arrangements.
Both of these new regimes have the potential to impact on the world of SMSFs, although their application may be a little difficult to navigate. Despite this, it is important for professional advisers to be aware of these changes to ensure their SMSF clients continue to meet their regulatory obligations. Not meeting these requirements, where they apply, could have consequences.
Application of the DDO regime to SMSFs Let’s start with the application of the DDO regime to the world of SMSFs. The genesis of the DDO regime Continued on next page
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