In the media
Product dashboards 'essential', says KPMG
Super product dashboards should be a "priority"
for ASIC given the findings in the Productivity Commission's
draft report on superannuation, says KPMG (1 June 2018).
More...
Some SMSFs are also underperformers
The Productivity Commission's
(PC's) finding that many people have their
superannuation in underperforming funds also extends to
self-managed super funds (SMSFs), founder of SMSF
Benchmarks, Nick Shugg (31 May 2018).
More...
O'Dwyer emphasises jail terms for SG
underpayments
An SMSF accountant has been charged with multiple counts
of criminal conduct and fraud after misusing investor funds, and
making false and misleading statements to investors. The Minister
for Revenue and Financial Services, Kelly O'Dwyer has stressed
the likelihood of jail terms for employers who fail to meet their
superannuation guarantee (SG) obligations (31 May
2018).
More...
ASIC gives disclosure relief during transition to
AFCA
ASIC has announced it will give financial firms, including
superannuation trustees, transitional relief until 1 July 2019 to
allow them time to update mandatory disclosure documents and
periodic statements with the contact details of the Australian
Financial Complaints Authority (AFCA) (31 May
2018).
More...
Government to pause fines for unpaid super
The government is proposing to grant employers a 12-month
amnesty from the late fines associated with outstanding
superannuation, on the proviso that they are fully paid within the
period. The introduction of the Treasury Laws Amendment (2018
Superannuation Measures No. 1) Bill 2018 waives penalties
dealt to employers for failing to pay superannuation owed to
employees (31 May 2018).
More...
APRA seeks further improvements from superannuation
licensees to manage conflicts of interest
The Australian Prudential Regulation Authority
(APRA) has called for greater focus by
superannuation licensees on administering outsourcing arrangements
with related parties to effectively manage conflicts of interest.
View APRA's letter to RSE licensees on the related party
thematic review
here (29 May 2018).
More...
Federal government cracks down on criminals'
super
According to Minister for Revenue and Financial Services,
Kelly O'Dwyer, the first proposal is for a new claw-back
mechanism for "out of character" superannuation
contributions made by criminals to shield their assets from use in
compensating victims of their crimes (29 May 2018).
More...
PC's super report delivers on Government's
terms
Inadequate competition, governance and regulation have led to a
situation in which many Australians are not achieving an optimal
outcome from superannuation, including being signed up to
underperforming funds, holding unintended multiple accounts and
having their balances eroded by unsuitable insurance (29 May 2018).
More...
ASFA urges caution on PC report
Any changes to Australia's superannuation system
flowing from the Productivity Commission's latest draft report
need to acknowledge the world-leading nature of the existing regime
and the diverse needs of members, according to the Association of
Superannuation Funds of Australia (ASFA) (29 May
2018).
More...
Consumer interests best served by existing
industrial-based default super system: AIST responds to
Productivity Commission
The Australian Institute of Superannuation Trustees
(AIST) has reiterated its support for an
industrial-based default fund selection process, noting this model
had a strong track record of protecting consumer interests and
delivering superior returns (29 May 2018).
More...
ISA calls for Fair Work panel's reconvening
Industry Super Australia (ISA) has called
on the Government to immediately reconstitute the Fair Work
Commission's expert panel to shortlist the best performing
super funds, rejecting a suggestion from the Productivity
Commission (PC) that another agency be created to
do this work (29 May 2018).
More...
AAT affirms permanent ban of former Easy Capital
director
The Administrative Appeals Tribunal (AAT)
has affirmed ASIC's decision to permanently ban Mr Yingjie Wang
(also known as Jay Wang), a lawyer and accountant from Sydney, from
providing financial services (28 May 2018).
More...
Boosting financial capability across Australia
The Turnbull Government is establishing a new body to
boost the advancement of financial capability across Australia. The
new body, a not for profit public company, will administer grants
and improve capabilities amongst Australians of financial products
and services (28 May 2018).
More...
Corporate watchdog wants to put staff in the
nation's banks to clean up industry
After months of shocking revelations at the banking royal
commission, the corporate watchdog ASIC wants more money from the
Federal Government to supervise the industry (28 May 2018).
More...
New proposals to improve compensation for victims of
crime
The Turnbull Government is acting to ensure that the
superannuation accounts of criminals cannot be used as a safe haven
to protect their assets from the victims of their serious crimes.
The Minister for Revenue and Financial Services, the Hon Kelly
O'Dwyer MP, released for public consultation two draft
proposals on access to superannuation. Stakeholders are invited to
comment on the draft proposals, as set out in a consultation paper
accessible from the Treasury
website, by lodging a submission. Submissions are due by 15
June 2018. (28 May 2018).
More...
Government commences consultation to clamp down on large
cash payments
The Turnbull Government is committed to tackling the black
economy and has issued a consultation paper inviting comment on its
Budget announcement to introduce an economy-wide cash payment limit
of $10,000 (25 May 2018).
More...
Tackling non-payment of workers'
superannuation
The Turnbull Government is continuing to take action to
ensure Australian workers are paid the superannuation entitlements
that they are owed. The Turnbull Government has introduced
legislation to complement the sweeping superannuation guarantee
(SG) integrity package already before Parliament
by introducing a one-off, twelve month amnesty for historical
underpayment of SG (24 May 2018).
More...
Second and final phase of industry funding model - ASIC
fees-for-services
The Turnbull Government is committed to ensuring that the
ASIC has the resources and powers it needs to combat misconduct in
Australia's financial services industry and promote trust and
confidence in the financial sector. The Government has introduced
into Parliament legislation on the second phase of the ASIC
industry funding model – fees-for-service (24 May 2018).
More...
Turnbull Government acts to further strengthen
APRA
The Turnbull Government has introduced legislation that
will bolster the ability of the Australian Prudential Regulation
Authority (APRA) to ensure stability and
accountability in our critical financial sector through the
appointment of a second Deputy Chair (24 May 2018).
More...
Governance Institute: Shareholders pivotal role in
restoring trust and integrity in financial services
As the horror stories of unconscionable conduct continue
to unfold in the third round of the Hayne Royal Commission,
shareholders – institutional and retail – have a
pivotal role to play in restoring trust and confidence in the
financial services sector (24 May 2018).
More...
APRA reviews its superannuation prudential
framework
The Australian Prudential Regulation Authority
(APRA) has begun a post-implementation review of
the superannuation prudential framework introduced following the
2013 Stronger Super reforms (23 May 2018).
More...
Internal auditors urged 'to lift their game' in
raising red flags
ASX Corporate Governance Council chairman Elizabeth
Johnstone calls on the internal auditing profession to lift its
game to better weed out unethical or unlawful practices revealed in
the financial services royal commission (22 May 2018).
More...
Asset stewardship code unveiled by ACSI
The Australian Council of Superannuation Investors
(ACSI) has launched a stewardship code that lays
out principles for voting activity, company engagement and asset
manager monitoring (18 May 2018).
More...
Super board assessment a 'blind spot':
APRA
Not all superannuation funds are adequately monitoring
their directors' performance, an APRA review has found. In a
letter addressed to registrable superannuation entities
(RSEs), APRA released findings from its thematic
review into board governance practices that assessed how RSEs were
holding up against new prudential standards that were introduced in
July 2013 (18 May 2018).
More...
In practice and courts
APRA update on new accounting standards AASB 16 and AASB
17
(31 May 2018)
More...
Applying the IASB's Revised Conceptual Framework and
Solving the Reporting Entity and Special Purpose Financial
Statement Problems
Hot Topic released –This Hot Topic provides an
overview of the work the AASB has undertaken – including a
series of research reports – with regard to the issues faced
in introducing the IASB's revised Conceptual Framework for
Financial Reporting into Australia, and improving the consistency,
comparability and transparency of financial reports prepared in
accordance with Australian Accounting Standards (23 May 2018).
More...
ASIC CP 300 Approval and oversight of compliance schemes
for financial advisers
The proposals in CP 300 Approval and oversight of
compliance schemes for financial advisers are outlined
here. ASIC is consulting for six weeks on the proposals in the
paper and responses are invited by 28 June 2018. ASIC intends to
release a regulatory guide setting out our final policy by the end
of September 2018.
APRA: Review of the superannuation prudential
framework
The aim of the review is to ensure the prudential and
reporting standards, and related guidance, have achieved their
objectives and continue to remain fit for purpose. To commence this
review, APRA has released the first of a series of consultation
papers on aspects of the prudential framework. APRA invites written
submissions on all consultation papers by 26 September 2018. Copies
of the consultation papers are available
here (23 May 2018).
More...
APRA superannuation statistics March 2018
The Australian Prudential Regulation Authority
(APRA) has released its Quarterly Superannuation
Performance publication and the Quarterly MySuper Statistics report
for the March 2018 quarter (29 May 2018).
More...
Australian Council of Superannuation Investors (ACSI)
Australian Asset Owner Stewardship Code
The stewardship code sets out six principles which
signatories must commit to on an 'if not, why not' basis.
Signatories will be required to publish a 'Stewardship
Statement' describing how they apply the principles, with a
list of signatories maintained on the ACSI website (18 May 2018).
More...
AIST Submissions
Protecting Your Super Package
AIST generally supports the package, but changes are
needed to better meet members' best interests. The fee cap
calculation needs review and sell spreads need to be included in
the calculation of exit fees in order to prevent gaming (29 May
2018).
ASFA Submission
Submission to The Treasury - ASFA response to the exposure
draft Treasury Laws Amendment (Protecting Superannuation)
– Bill 2018 (Draft Bill) and the related draft
Explanatory Materials (29 May 2018).
More...
Submission to Australian Securities and Investments
Commission (ASIC) - Response to the draft Cost
Recovery Implementation Statement for ASIC's Fees-for-service
regime (23 May 2018).
More...
The regulatory capital framework - Impairment,
provisioning and enforcing security: background paper 13
In response to a request from the royal commission, APRA
has prepared this paper on the effect on an authorised
deposit-taking institution's (ADI) Tier 1
capital, where a loan is classified as impaired, a provision is
raised and enforcement action against the loan's security is
taken (18 May 2018). More...
Retirement Income Covenant Position Paper:
Consultation
The retirement phase of the superannuation system is
currently under-developed and needs to be better aligned with the
overall objective of the superannuation system of providing income
in retirement to substitute or supplement the Age Pension. The new
covenant will form the cornerstone of the new framework. It will be
added to the Superannuation Industry (Supervision) Act
1993. The position paper is available here.
Interested parties are encouraged to provide submissions on the
proposed covenant principles by 15 June 2018.
ASIC CP 300 Approval and oversight of compliance schemes
for financial advisers
The proposals in CP 300 Approval and oversight of
compliance schemes for financial advisers are outlined
here. ASIC is consulting for six weeks on the proposals in the
paper and invite responses by 28 June 2018. ASIC intends to release
a regulatory guide setting out our final policy by the end of
September 2018.
Financial Adviser Standards and Ethics Authority
(FASEA): draft guidance on education pathways for existing
financial advisers
Under the professional standards reforms, existing
financial advisers have until 1 January 2024 to meet the
degree-equivalent requirements set by the Standards Authority. The
draft guidance is available on the Standards Authority's website. Consultation will
close on 29 June 2018.
More...
Current Inquiries - Economics Legislation
Committee
Consumer protection in the banking, insurance and financial
sector
On 14 February 2018, the Senate granted an extension of time to
report by 26 June 2018.
Gazette -Superannuation Industry
(Supervision) Act 1993
Notice of Disqualification - Steven Larkin; Steven Noske
(31 May 2018).
Notice of Disqualification - Anastasia Bonython; Gregory
Prouse; Nui Harris (22 June 2018).
Cases
Hart and Commissioner of Taxation (Taxation)
[2018] AATA 1267
SUPERANNUATION – self managed superannuation fund
– whether breach by trustee of Trust Deed – whether
breach by trustee of covenants – whether fit and proper
person – disqualification – failure to lodge annual
returns – breach of in-house asset rule – condition of
release not met – breach of related entity provisions –
acquisition of superannuation fund assets – arm's length
investments – acquisition of real property –
acquisition of shares in a foreign company – failure to
comply with benefit payment standards – falsifying signatures
on superannuation fund documents – payment of benefits due to
terminal illness – loans and financial assistance to members
– sole purpose test – forfeiture of benefit of members
- Superannuation Industry (Supervision) Act 1993.
Cam & Bear Pty Ltd v McGoldrick
[2018] NSWCA 110
NEGLIGENCE – breach of duty by auditor of
self-managed superannuation fund – negligence in failing to
identify and report doubts as to recoverability of assets described
in financial statements as cash – primary judge erred in
failing to have regard to the breadth of the appellant's case
– breach of duty caused loss.
NEGLIGENCE – contributory negligence –
appellant lacked financial sophistication – respondent
auditor engaged to prevent the kind of loss that occurred –
appellant's damages reduced by 10% for its contributory
negligence.
NEGLIGENCE – proportionate liability – claim
against superannuation fund's auditor – damages of
appellant not reduced by reason of directors' concurrent
liability to the appellant – the same acts of the directors
resulted in the appellant's damages being reduced for its
contributory negligence – to permit both reductions would
result in a double deduction for the same acts.
NEGLIGENCE – proportionate liability – claim
against superannuation fund's auditor – company which
compiled the fund's financial statements not proved to be also
liable to appellant – no evidence as to the basis on which
the company was engaged.
Australian Securities and Investments Commission v Westpac
Banking Corporation (No 2) [2018] FCA
751
CORPORATIONS – non-disclosure of rate set trading
practice – misleading or deceptive conduct – false or
misleading representations – contraventions of s.1041H of
Corporations Act – contraventions of ss.12DA and
12DF of Australian Securities and Investments Commission Act
2001 (Cth) – unconscionable conduct – financial
instruments referencing BBSW – non-disclosure of rate set
trading practice to counterparties – unconscionable conduct
within the meaning of the unwritten law – statutory
unconscionability – contraventions of ss.12CA, 12CB and 12CC
of Australian Securities and Investments Commission
Act.
CORPORATIONS – financial services licence –
licence obligations – whether financial services provided
efficiently, honestly and fairly – conflict of interest
– training of representatives – contraventions of
s.912A(1) of Corporations Act.
Wang and Australian Securities and Investments
Commission [2018] AATA 1405
CORPORATIONS ACT – banning order – permanent
ban – where applicant involved in multiple business
enterprises – applicant held position as director of multiple
companies – Australian Financial Services Licence –
whether applicant breached a financial services law – whether
applicant was dishonest – whether applicant is of good fame
and character – decision under review affirmed.
On 3 February 2017, a Delegate of the Respondent
(ASIC) decided to permanently ban the Applicant
(Mr Wang) from providing financial services under s.920A of the
Corporations Act 2001 (Cth)
(CA).
Section 920A(1) empowers ASIC to make a banning Order
against a person. The Delegate found that each of s.920A(1)(d), (e)
and (f) was satisfied in the case of Mr Wang.
Legislation
Commonwealth
Treasury Laws Amendment (Release of Superannuation on Compassionate
Grounds) Regulations 2018
These regulations amend the Retirement Savings
Accounts Regulations 1997 and Superannuation Industry
(Supervision) Regulations 1994 to improve the integrity of the
processes under which benefits are released on compassionate
grounds by superannuation entities or retirement savings account
providers to their members (30 May 2018).
Superannuation (PSS) Maximum Benefits (2018-2019) Determination
2018
This instrument sets new maximum benefits for the Public Sector
Superannuation (PSS) scheme to apply for the
financial year starting on 1 July 2018 (22 May 2018).
Superannuation (CSS) Productivity Contribution (2018-2019)
Declaration 2018
This instrument sets the new productivity
contribution rates to apply with effect from 1 July 2018 (22 May
2018).
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.