In the media
RC focuses on vertical integration and super
Vertically-integrated structures and their impact on
bank-owned superannuation structures have been heavily scrutinised
in hearings of the Royal Commission into Misconduct in the Banking,
Superannuation and Financial Services Industry (09 August 2018).
More...
ASIC sees weakness in super insurance code
ASIC notes that, at present, there are significant
weaknesses in the current Insurance in Superannuation Voluntary
Code of Practice, including around its monitoring and enforcement,
that limit is potential effectiveness (09 August 2018).
More...
ASIC raises absence of 'best interests'
obligation for employers
Employers are not required to act in employees' best
interests when selecting a default superannuation fund and this
creates an environment where conflicts arise, according to the ASIC
(09 August 2018).
More...
Turnbull Government expands ASIC's armoury
The Turnbull Government is injecting a further $70.1
million into the ASIC to ensure the corporate regulator has the
resources and powers it needs to combat misconduct in the financial
services industry and across all corporations for the protection of
Australian consumers (07 August 2018).
More...
Update on financial advice institutions' fees for no
service refund programs
AMP, ANZ, CBA, NAB and Westpac have now paid or offered
customers $222.3 million in refunds and interest for failing to
provide advice to customers while charging them ongoing advice
fees. In addition, ASIC is overseeing FFNS remediation programs by
other Australian financial services (AFS)
licensees that have identified potential FFNS failings (07 August
2018).
More...
APRA releases submission to the Productivity
Commission's draft report into superannuation
APRA – APRA releases submission
to the Productivity Commission's draft report into
superannuation (03 August 2018).
Give the ACCC a competition mandate: Productivity
Commission
The Productivity Commission has released its final inquiry
report into Competition in the Australian Financial System,
recommending the ACCC be given an explicit mandate to monitor
competition in the financial system (06 August 2018).
More...
Royal commission shows no need to water down company
laws, say lawyers
The banking royal commission has shown that Australia
should not water down its continuous disclosure regime to make it
easier for listed companies to avoid class actions, according to
the country's biggest class action outfit (01 August 2018).
More...
Professional standards reforms for financial advisers -
ASIC update
ASIC has announced changes to reporting dates for a number
of required notifications in the transition to the new financial
adviser professional standards reforms. The revised schedule is
intended to simplify licensees' disclosure obligations (01
August 2018).
More...
ASIC updates guidance for funds management
industry
ASIC has released a suite of seven new and updated
regulatory guides to provide comprehensive guidance to the funds
management industry. The guidance has been updated for changes
arising from the Asia Region Funds Passport (31 July 2018).
More...
In practice and courts
New financial adviser professional standards
reforms
The revised schedule is intended to simplify
licensees' disclosure obligations. ASIC is also clarifying the
process for recognising advisers as 'existing providers'.
Existing providers
Financial advisers who are listed on the Financial Advisers
Register (FAR) between 1 January 2016 and 1
January 2019 will be recognised as an 'existing provider'
under the new professional standards. If a person is an
'existing provider', they have until 1 January 2021 to pass
the exam, and 1 January 2024 to complete an approved qualification.
In the meantime, they can continue to work as a financial
adviser.
Changes to FAR notifications
A key change is that ASIC will push back the timing for
licensees to notify of new advisers who are joining the industry
for the first time after 1 January 2019. As a result, new
'provisional relevant providers' can only be added to FAR
from 15 November 2019. Further information about the changes to
notification dates can be found on ASIC's
Professional standards for financial advisers – reforms
website (01 August 2018).
Treasury Laws Amendment (Protecting Your Superannuation
Package) Bill 2018 [Provisions]
Status: Submissions Closed. Date Referred: 21 June 2018
Reporting Date: 13 August 2018.
More...
APRA proposes updates to related parties framework for
ADIs
APRA's proposals to modernise the framework include:
explicitly addressing 'step-in risk' by incorporating
guidance from the Basel Committee on Banking Supervision. A
three-month consultation period on the proposed revisions to APS
222 and ARS 222.0 has now commenced, with APRA accepting
submissions until 28 September 2018. Copies of the discussion paper
are available
here.
Draft amendments to Chapters 4 and 15 of the AML/CTF
Rules
These amendments exempt reporting entities from certain
identification requirements in Chapter 4 and Chapter 15 of the
AML/CTF Rules, for customers that are 'custodians'. The
definition of 'custodian' in new paragraph 4.4.19(1) limits
the exemption to corporate custodians, rather than individuals who
provide custodial or depository services. The second public
consultation period for these amendments closed on 31 July 2018. More...
ASIC consultation: foreign financial services providers
relief proposals
CP 301 sets out a proposal to enable foreign providers to apply
for a modified form of Australian financial services
(AFS) licence (foreign AFS licence). This follows
ASIC's review of the regulatory settings behind our foreign
providers relief. The current foreign provider licensing relief due
to sunset on 27 September 2018, will be extended until 30 September
2019 while we consult with stakeholders.
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 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 on APRA's
website.
AIST Statement on the Royal Commission
The Royal Commission into Misconduct in the Banking,
Superannuation and Financial Services Industry begins its Round
Five hearings (6 August 2018).
More...
ASFA Submissions
Submission to the Australian Financial Complaints
Authority (AFCA)
ASFA response to the AFCA Funding Consultation Paper (31
July 2018).
More...
Cases
Australian Securities and Investments Commission v Linchpin
Capital Group Ltd [2018] FCA
1104
CORPORATIONS – managed investment scheme –
ASIC application to appoint receivers – nature and extent of
contraventions – scope of assets over which receiver
appointed.
Australian Financial Services Reform Act 2001 (Cth);
Australian Securities and Investments Commission Act 2001
(Cth); Corporations Act 2001 (Cth); Personal Property
and Securities Act 2009 (Cth).
Held: Again, save for ASIC's concession which I apprehend is
appropriately given so as to prevent loss being suffered by other
persons, I would have been prepared to grant the injunctions
preventing Endeavour from engaging in the provision of all
financial services.
Aussiegolfa Pty Ltd (Trustee) v Commissioner of
Taxation [2018] FCAFC 122
SUPERANNUATION – in-house asset rules –
self-managed superannuation fund – where a self-managed
superannuation fund acquired units of a particular class in a
managed investment scheme – where the units were referred to
as units in a sub-fund – where a particular property was
acquired by the responsible entity of the managed investment scheme
on behalf of the class of unit holders – whether the units
held by the trustee of the self-managed superannuation fund
constituted an investment in a "related trust" so as to
constitute an in-house asset – whether there was a distinct
trust associated with the class of units.
TRUSTS – definition of a trust – managed investment
scheme – where the constitution of a managed investment
scheme conferred on the responsible entity a power to create
classes of units and to determine the rights, obligations and
restrictions attaching to units in the class – where the
responsible entity created a class of units associated with (what
was referred to as) a sub-fund – where a particular property
was acquired by the responsible entity on behalf of the class of
unit holders – where the product disclosure statement stated
that the assets of one sub-fund were not available to satisfy
liabilities of another sub-fund and that an investor would acquire
a beneficial interest in the underlying property held by the
sub-fund – whether statements in product disclosure statement
could be relied on as secondary evidence of a determination by the
responsible entity – whether there was a distinct trust
associated with the class of units.
SUPERANNUATION – sole purpose test – self-managed
superannuation fund – where self-managed superannuation fund
acquired units of a particular class in a managed investment scheme
– where the responsible entity acquired a property, being an
apartment in a student accommodation complex, on behalf of the
class of unit holders – where the custodian of the managed
investment scheme entered into a leasing and managing authority
with a student housing entity – whether leasing the apartment
to the daughter of the sole member of the self-managed
superannuation fund at market rent would cause the fund to breach
the sole purpose test.
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.