ASIC has clarified how it will apply the wholesale investor test to selfmanaged superannuation funds (SMSFs). ASIC now considers that any SMSF holding assets worth at least $2.5 million (rather than $10 million), as certified by a qualified accountant, would be considered to be a “wholesale client” for the purposes of Corporations Act, section 761G.
Given that many SMSF members may have invested up to $1 million in non-concessional contributions in the 2007 Financial Year (probably via the transfer of commercial property) on top of any other contributions over the years, it is likely that many SMSFs could fall within the meaning of “wholesale client”.
Thomson Geer comment: It is important for service providers to remember that they must obtain evidence, via a qualified accountant’s certificate, that the SMSF trustee would be a wholesale client before treating such a client as a wholesale client (i.e. by failing to provide some of the statutory protections afforded to retail clients) and ASIC states that it will take regulatory action where financial service providers miscategorise their clients.