Document Samples

SMSF Derivatives Risk Statement

If you, as the trustee of a DIY / Self Managed Superannuation fund are going to trade derivatives (defined in SISA as an options or futures contract) where that derivatives contract requires a margin requirement for the trade (to meet the obligations of the exchange for collateral), then the fund must prepare a Derivatives Risk Statement (DRS) (*it used to be called a Risk Management Statement) in accordance with Regulation 13.15A of the SIS act.

The statement must set out:

 

- The policies for the use of derivatives, along with an analysis of the risks involved within the Fund's investment strategy.

 

- The restrictions and controls on the use of derivatives which takes into account the expertise of those involved.

 

- The compliance processes that ensure the controls are effective

 

Once again, you the trustee are responsible for this, and the ATO have informed auditors that " a DRS should be subject to an annual sign off by the auditor: that the DRS existed; the procedures laid down in the DRS had been followed, and that any changes to the DRS had been approved by the trustees".

 

A comprehensive SMSF derivatives risk statement sample template

The SMSF Review  has a comprehensive, detailed SMSF Derivatives Risk Statement sample template that members can use to get you started. It covers each of the above-mentioned areas that need to be addressed.

 

Note however, that this is only a sample document and that it is your responsibility as trustee to formulate and implement your own DRS. We are not advising you to specifically use this one, however you are welcome to use it as a starting point template from which you can add your own details. 

 

Our sample SMSF derivatives risk statement template is a downloadable Word document to use as you wish.

 

Note that this document is reserved for our members.

 

If your not a member, its FREE to join. Click here for more information. Once your a member, you'll be provided with the page link to download this document.