Superannuation Alert 13.04.17

Financial Services eBulletin - 13 April 2017

The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.

Type Subject matter Source Description
Legislative updates ASIC Cost Recovery Bills

On 30 March 2017, the Federal Government introduced a number of bills into the House of Representatives to give effect to its proposed industry funding model for ASIC.

According to Treasury's explanatory memorandum, under the proposed legislation "[e]ntities that are regulated by the Australian Securities and Investments Commission will be required to pay a levy that will recover ASIC’s regulatory costs for a financial year from entities that were regulated in that financial year.  The levy will be payable by entities in the following financial year once ASIC has issued them a notice setting out their liability to levy".
The legislation is expected to be debated in May when parliament resumes.
Treasury updates Consultation paper for self-reporting of contraventions by AFSL holders Consultation paper

On 11 April 2017, Treasury released a consultation paper on the self-reporting of contraventions by AFSL holders.  The proposed reforms have been developed by the ASIC Enforcement Review Taskforce, formed in October 2016 by the Minister for Revenue and Financial Services.

According to a media release by the Minister for Revenue and Financial Services, the proposed reforms would:

  • "reduce ambiguity around whether a breach is significant and must be reported to ASIC by introducing an objective ‘reasonableness’ test, making it easier for businesses to make decisions about reporting and strengthening ASIC’s position when it takes enforcement action for failure to report;
  • enhance accountability for licensees, and their employees and representatives, by expanding the class of reports that must be made to expressly include misconduct by individual advisers and employees;
  • introduce new and heightened penalties for non-reporting, giving ASIC greater flexibility to impose a range of penalties in response to a failure to report;
  • require ASIC to publish data on breach reports for major licensees; and
  • introduce an equivalent reporting regime  for credit licensees (who are currently subject only to annual compliance reporting)".

Submissions to the Taskforce are due by 12 May 2017.

ASIC Consultation paper for ASIC Financial Services Panel Consultation paper

On 11 April 2017, ASIC published a consultation paper on its proposed implementation of a Financial Services Panel.

According to ASIC, "The Panel would comprise financial services and credit industry participants and/or non-industry participants with relevant expertise (e.g. lawyers and academics) and at least one ASIC staff member.  The Panel would make administrative decisions on certain matters relating to financial services and credit activities."

The paper indicates that ASIC intends for the panel to initially have responsibility for determining whether banning orders should be made against individuals who have engaged in misconduct in the industry.  These responsibilities may be further expanded over time.

Submissions to ASIC about the proposal are due by 23 May 2017.

AUSTRAC Draft AML/CTF Rules for customers which are custodians Draft AML/CTF Rules

On 3 April 2017, AUSTRAC released draft rules proposing a number of changes to the Anti-Money Laundering and Counter-Terrorism Financing AML/CTF Rules relating to customers who act as custodians.

According to the Explanatory Note release by AUSTRAC, the amendments would "exempt reporting entities from certain identification requirements" for custodians which:

  • "act in the capacity of a trustee;
  • are providing a custodial or depository service;
  • hold an Australian financial services licence authorising them to provide custodial or depository services, or are exempt under the Corporations Act 2001 from the requirement to hold such a licence; and
  • have their name and enrolment details entered on the AUSTRAC Reporting Entities Roll".

The public consultation period on the proposed amendments closes on 1 May 2017.

APRA APRA Insight Issue One 2017 APRA Insight

APRA recently released its first Insight issue for 2017. In relation to superannuation, it notes that "APRA is actively involved in the Government’s proposals to introduce a legislative framework to facilitate post-retirement products, likely to be known as ‘MyRetirement’ products".  Further, APRA notes its expectations for RSE licensees "relating to business planning practices and compliance with the legislative ‘scale test’ for MySuper products [which] is likely to be an area of increased focus for APRA in 2017".  It also notes that "APRA is currently considering responses to its consultation on draft prudential guidance released in October 2016 relating to fund transfers and wind-ups".


Further information

All information on this site is of a general nature only and is not intended to be relied upon as, nor to be a substitute for, specific legal professional advice. No responsibility for the loss occasioned to any person acting on or refraining from action as a result of any material published can be accepted.