One of the less controversial recommendations out of Cooper Phase Three is the recommendation that SIS legislation relating to acquisitions and disposals between related parties should be amended so that where an underlying market exists, all acquisitions and disposal of assets between SMSFs and related parties must be conducted through that market.
This recommendation would, however, modify the existing rule under s66(2) SIS that allows the trustee to acquire a listed security directly from a related party where the security was acquired at market value.
And when you think about it, unless the market is very thinly traded, it will be very unusual for a particular buyer and a particular seller - in this case the SMSF and related party - who otherwise want to deal with one another directly to in fact connect with one another in the market setting.
In a sense, the way the recommendation operates is to prohibit transfers of assets between SMSFs and related parties where a market exists, unless through some quirk of fate, the parties happen to be dealing with one another via the market.
The recommendation ends up imposing upon the parties the additional transaction costs - typically brokerage or commission - which they would not otherwise incur under the current arrangements
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