Those looking to access the stock market through SMSF investing need to follow a range of rules and requirements to ensure they remain compliant, this guide shares insights and resources to help you stay safe as a trustee.
Self-Managed Super Funds (SMSFs) give Australians the ability to take direct control over their retirement savings. One of the most common strategies is to use your SMSF to invest in ASX-listed shares, exchange-traded funds (ETFs), and international securities, including the US market.
While this control can offer flexibility and possible tax incentives, it also brings legal and administrative responsibilities that many trustees overlook, especially when it comes to trading listed securities.
This guide will help SMSF trustees understand:
- How to invest in shares through an SMSF
- What the Australian Taxation Office (ATO) and Superannuation Industry (Supervision) Act require
- What risks to consider
- Why choose an execution-only broker
- Where to get professional assistance from accountants, administrators, and auditors
What Does It Mean to use Securities by SMSF Investing?
Investing in securities means your SMSF is purchasing financial products such as shares, ETFs, listed investment companies (LICs), or international equities.
Under Australian law, SMSFs can invest in these assets as long as:
- The trust deed allows it
- The investment strategy clearly includes listed securities
- All decisions meet the sole purpose test (i.e. to provide retirement benefits to members)
SMSF investing may include these depending on their setup:
- ASX blue-chip stocks
- Sector or thematic ETFs
- US-listed companies
- Government bonds
- LICs and REITs
Each of these has different characteristics, risks, and administrative needs, especially when dealing with foreign exchange, tax treatment, and recordkeeping.
What Are the Risks of Share Trading in an SMSF?
Although trading shares and ETFs is a common strategy, it is not without risk. Trustees should be aware of:
1. Compliance Risk
Investing outside of your written investment strategy or failing to document decision-making may result in regulatory breaches, penalties, or disqualification of trustees. The ATO has increased its focus on non-compliant SMSFs in recent years.
2. Liquidity Risk when SMSF Investing
Unlike large super funds, an SMSF must maintain enough liquidity to pay member benefits (e.g. pensions) and meet ongoing tax liabilities. Overexposure to volatile or illiquid shares can impact this.
3. Trustee Duties
All decisions must be made in the best financial interests of members. High-risk trading, frequent speculative positions, or short-term holding patterns may raise questions about the fund’s compliance.
4. Overseas Trading Complexity for SMSF Investing
Investing in US stocks introduces FX conversion, withholding tax considerations, and sometimes higher brokerage or settlement costs. Trustees must understand the legal and tax implications.
What Are the Legal and Documentation Requirements?
To invest in shares and other securities, your SMSF must meet the following legal and administrative requirements:
A. A Compliant SMSF Structure
- ABN and TFN registered
- Valid trust deed that permits listed investments
- Separate SMSF bank account
- Corporate trustee (preferred for easier admin)
B. A Written Investment Strategy
This must include:
- Target asset allocation ranges (e.g. 60–80% in listed shares)
- Liquidity requirements
- Consideration of insurance
- Risk management strategy
- Explanation of diversification
Trustees are required to review this strategy annually, or when circumstances change (e.g. a new member, pension phase, or strategy change).
Head here for more on how to make a written investment strategy.
C. Recordkeeping and Decision Logs for your SMSF Investing
All SMSF investing activity must be supported by:
- Meeting minutes
- Transaction logs
- Research or rationale documents
- Broker statements
This becomes critical during audit season or an ATO review.
Get some templates for your SMSF records here.
Who Can Help Trustees Stay Compliant?
Trustees are not expected to do everything themselves. You can engage the following professionals to help manage your fund’s trading activities compliantly:
SMSF Accountants
They prepare annual financial statements and lodge the SMSF annual return. They also help reconcile share portfolios and tax implications from share sales or dividends.
SMSF Auditors
A registered SMSF auditor must independently review the fund every year. Their role includes verifying shareholdings, assessing investment strategy alignment, and detecting compliance breaches.
SMSF Administrators
Some trustees choose a specialist administrator to handle recordkeeping, corporate actions, and compliance documentation, especially useful for frequent share traders. Keeping records of your SMSF investing from day one will make it far easier to process your accounts and annual audits.
See our list of SMSF service providers → (Link to future resource or partner directory page)
Choosing an SMSF-Compatible Broker
Your SMSF should only use a licensed, execution-only broker that supports:
- Trade records
- Access to both ASX and international markets
Macro Global Markets is an Australian-owned, execution-only broker operating under AFSL 363972, built specifically for investors who value direct control and compliance alignment.
We offer:
- Access to ASX and US securities
- Platform walkthroughs for trustees
- 100% execution-only, no advice, no hype
FAQs
Can my SMSF day trade shares?
SMSFs can engage in frequent trading, but only if it aligns with a documented investment strategy and serves the sole purpose of retirement benefits. Excessive short-term trading may raise concerns during an audit.
Do I need to declare US share dividends?
Yes. Trustees must report foreign income and may be subject to withholding tax, depending on treaty arrangements. Your accountant can help with tax offsets and correct reporting.
Do I need a broker who offers advice?
No. Many SMSF trustees prefer execution-only brokers to maintain independence and reduce costs. If you want personal advice, speak to a licensed financial adviser separately.
Can I use automated or algorithmic strategies?
Yes, provided these strategies are consistent with your fund’s investment objectives and risks are clearly understood. You must still retain ultimate control and accountability as a trustee.
How to Trade Shares in Your SMSF with Confidence
Trading ASX or US securities inside your SMSF can be a powerful tool for growth, diversification, and long-term wealth building. But it must be approached with discipline, clear documentation, and an understanding of your responsibilities as a trustee.
At Macro Global Markets, we help SMSF trustees trade with confidence by offering:
- An ASIC-regulated platform
- Full access to listed equities and ETFs
- Execution-only trading, no advice, no conflict
- Tools to support SMSF compliance and recordkeeping
Download our SMSF Share Trading Checklist →
Start your SMSF trading account now →