What is it?
This is a unit trust which complies with the requirements of regulation 13.22C of the regulations under the Supervision Industry (Supervision) act 1993. The investment by a SMSF into one of these trusts is an exception to what is known as the in-house asset rule. An SMSF can invest into 100% of the units within one of these trusts and it does not breach the in-house asset rule.
The trust deed however must have restrictions built into it which complies with SIS regs 13.22C and 13.22D. With these restrictions, the trustee cannot borrow money or invest in any other trust or company or carry on a business. They can only be used as entirely passive entities. These trusts should only be purchased after having the benefit of professional advice as they are special purpose trusts.