Australia has very complex superannuation laws. Experts warn that people who set up self-managed super funds (SMSFs) have to be very cautious about what they invest in. The trustees of SMSFs who cannot raise the cash to meet contract for difference (CFD) margin calls face a nightmare. Thus, experts warn trustees to be very prudent about cash flow, because cash flow management is part of running a super fund. Stuart Forsyth, of the Australian Taxation Office (ATO), says trustees must plan for a cash flow squeeze if they invest in CFDs. There are several factors to consider if a trustee of a SFSF wants to raise cash. It is not easy to sell assets such as houses quickly, and it is not good to sell blue-chip shares in a poor market. Under super laws, fund trustees must have a written investment strategy that deals with cash flow, among other things.
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