Question of the week – CFDs and SMSFs

Executive Manager, SMSF Technical & Private Wealth, SuperConcepts
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Question: Can a self managed superfund trade contracts for difference (CFDS)?

Answer (By Graeme Colley): As a general rule, you need to have a look at the CFD and how it is structured before the superannuation fund can invest in it.  The ATO published a couple of ATO Interpretive Decisions (ATOIDs) some years ago on CFDs and their main concern was the gearing that was linked with them and any potential recourse back to the superannuation fund.

Here are the links to the ATOIDs:

Trading in CFDs in the fund is possible, however, it would need to consider the investment strategy of the fund and how a particular CFD satisfied the requirements of the SIS Act, which takes into account the risk associated with the fund’s overall investments.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.

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