According to a statement from SPAA, the association's submission to the FSI stated that it supports the Australian Taxation Office's role as primary regulator of the SMSF sector.
In the submission, SPAA also raised the possibility of SMSFs participating in the financing of housing via instruments such as shared appreciation mortgages and shared equity arrangements.
The submission also stated that the SMSF sector plays a "significant role" in diversifying assets held in the superannuation sector, reducing systemtic risk in the broader Australian financial system.
SPAA said there is "no risk" to the financial system posed by SMSF borrowing and property investment, noting a "very low level" of limited recourse borrowing arrangements are held by trustees.
SPAA's Jordan George said the SMSF sector should be viewed as an important source of capital for future Australian investment, both public and private.
"Opening up direct infrastructure investment to SMSFs could assist SMSFs in managing longevity risks, while also funding Australia's future investment needs," Mr George said.
"Infrastructure investments act as an important investment class that offers a risk-return point between cash/fixed-interest and equity investments.
"SMSFs are currently limited in investing in infrastructure due to [a] high dollar threshold and the illiquid nature of investment.
"Unitising investment in infrastructure projects to small investments - say, for example, $25,000 - and developing secondary markets could overcome current barriers to investment by SMSFs in the sector," he said.