SMSFs are required under the SIS Operating Standards (SIS Regulation 4.09, under SIS Act 31(1)) to ‘formulate, review regularly and give effect’ an Investment Strategy. Under s34 of the SIS Act contravening the Operating Standards can result in a fine of 100 penalty units, currently $ 17,000.
Under the Regulations the Investment Strategy must consider at least the following (para-phrased):
- Risk and Return
- Liquidity and Solvency
- Insurance cover for members