Australia: Superannuation, Funds Management and Financial Services - What's News - 29 November 2016

In the media

Productivity Commission efficiency review – ASFA concerned that framework complexity will drive up costs for members
ASFA – 25 November 2016 – The Association of Superannuation Funds of Australia (ASFA) today expressed concern regarding the scope of the proposed framework, released today by the Productivity Commission, for assessing the competitiveness and efficiency of the Australian superannuation system. The report, "How to Assess the Competitiveness and Efficiency of the Superannuation System", follows a Productivity Commission issues paper released on 16 March this year and a draft report released on 2 August.

ASIC consults on remaking class orders on application form requirements
ASIC – 25 November 2016 – ASIC today released a consultation paper proposing to remake four class orders that are due to expire ('sunset') in 2017 and to incorporate two related class orders into one new instrument. The class orders proposed to be remade are:

  • Class Order [CO 02/260] Product Disclosure Statements: Application forms created by licensee;
  • Class Order [CO 02/262] Applications to switch managed investments products;
  • Class Order [CO 07/10] Technical disclosure relief for reconstructions and capital reductions (paragraphs 4 and 8); and
  • Class Order [CO 02/437] Eligible applications: Relief from s1016A for managed investment products.

How to Assess the Competitiveness and Efficiency of the Superannuation System
GOVERNMENT – 25 November 2016 – This study is now complete and the report has been released. The commissioned study developed criteria to assess the efficiency and competitiveness of the superannuation system.

FPA announces impending Money & Life website launch
FPA – 24 November 2016 – The Financial Planning Association of Australia (FPA) has announced it will soon launch Money & Life, an online destination designed to help Australians improve their financial wellbeing. The site will offer regular content that empowers and educates Australians with up-to-date information.

FPA receives ASIC Professional Code approval
FPA – 24 November 2016 – The Financial Planning Association of Australia (FPA) announced today that ASIC has approved the FPA Professional Ongoing Fees Code, providing FPA members with an alternative to the opt-in laws when engaging clients in an Ongoing Fee Arrangement.

ABA welcomes higher standards for financial advisers
ABA – 24 November 2016 – New legislation to raise the competency and ethical conduct standards of financial advisers will turn financial advice into a trusted profession, the Australian Bankers' Association said today.

Reform passage heralds new era for super
MEDIA – 24 November 2016 – The Federal Government has achieved bipartisan support for the bulk of its reforms to superannuation, following the passing of its Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill through both houses.

Government processing agenda to strengthen the superannuation system and financial services
FSC – 24 November 2016 - The Financial Services Council (FSC) commends the Government for the successful passage through parliament of tax changes which will make the superannuation system more sustainable and flexible. The FSC also welcomes the Government's broader proposals to increase consumer protections in superannuation, financial advice and life insurance.

ASIC Consultation Paper 274: Remaking ASIC class orders on application form requirements
ASIC – 24 November 2016 – ASIC is seeking feedback on our proposals to incorporate ASIC Corporations (Options: Bonus Issues) Instrument 2016/77 and Class Order [CO 14/26] Personalised or Australian financial services licensee created application forms into the new instrument. Submissions on CP 274 are due on 2 January 2017.

APRA Consultation: draft guidance on successor fund transfers and wind-ups for superannuation trustees
APRA – 24 November 2016 – Australian Prudential Regulation Authority (APRA) today released for consultation draft guidance on successor fund transfers and wind-ups for APRA-regulated superannuation trustees (RSE licensees). A successor fund transfer is a transfer of the members in a superannuation fund to a different fund (successor fund). Draft Prudential Practice Guide SPG 227 Successor Fund Transfers and Wind-ups (draft SPG 227) replaces previous APRA guidance.

ASFA Submissions

ASFA – 24 November 2016 – The Association of Superannuation Funds of Australia (ASFA) provides the following submissions:

  • Submission to the Committee Secretary, Parliamentary Joint Committee on Corporations and Financial Services titled "Inquiry into the Life Insurance Industry". More...
  • Submission to the Senate Standing Committees on Economics titled "Treasury Laws Amendment (Fair and Stable Superannuation) Bill 2016 and the Superannuation (Excess Transfer Balance Tax) Imposition Bill 2016". More...

Turnbull government delivers on fairer, more sustainable superannuation
TREASURY – 23 November 2016 – The reforms include the introduction of a $1.6 million transfer balance cap, which places a limit on the amount an individual can transfer into the tax-free earnings retirement phase and the introduction of the Low Income Superannuation Tax Offset, which is expected to boost the retirement incomes of around 3.1 million low income earners.

New super changes will improve outcomes for low income earners, particularly women
AIST – 23 November 2016 – AIST today welcomed the passage of the Government's super tax reform package through both houses of Parliament.

Passing of Budget Super Tax Package provides equity, sustainability and certainty
ASFA – 23 November 2016 – The Association of Superannuation Funds of Australia (ASFA) today welcomed the passing of legislation enabling the Government's superannuation tax changes and called for no further changes to the tax treatment of super.

Super governance bill back on Government agenda
MEDIA – 23 November 2016 – The Federal Government would reintroduce its previously failed legislation mandating a minimum of one-third independent directors on not-for-profit superannuation fund boards, Revenue and Financial Services Minister Kelly O'Dwyer said yesterday.

FPA welcomes introduction of Professional and Education Standards Legislation into Parliament
FPA – 23 November 2016 – The Financial Planning Association of Australia (FPA) welcomes the Government's introduction of legislation on the Professional Standards and Education Framework into Parliament today. The legislation, if approved, will be effective from 1 July 2017 and involve the establishment of an independent standards setting body.

Professional Standards for Financial Advisors Introduced
TREASURY – 23 November 2016 – The Minister for Revenue and Financial Services, the Hon Kelly O'Dwyer MP, today introduced legislation into Parliament to mandate professional standards for financial advisers. The new professional standards regime will commence on 1 January 2019.

FSC welcomes the introduction of new professional standards framework for financial advisors
FSC – 23 November 2016 – The Financial Services Council welcomes today's introduction of legislation establishing a new professional standards and education framework for financial advisers.

ASIC approves the FPA Professional Ongoing Fees Code
ASIC – 23 November 2016 – ASIC has provided relief for members of the Financial Planning Association of Australia (FPA) who subscribe to the FPA Professional Ongoing Fees Code (the FPA Code) from compliance with the opt-in requirement. The relief is facilitated by ASIC's approval of the FPA Code.

AUSTRAC collaborates on risks in super sector
AUSTRAC – 22 November 2016 – The first ever risk assessment of money laundering and terrorism financing (ML/TF) in Australia's superannuation sector has identified significant risks of fraud and cybercrime.

AUSTRAC cleans up on money laundering
AUSTRAC – 22 November 2016 – The Australian Transaction Report and Analysis Centre (AUSTRAC) has achieved savings of $28.1 million for Australia's financial organisations by cutting red tape from the rules relating to anti–money-laundering and counterterrorism financing (AML/CTF).

Audit report reveals serious APRA action
MEDIA – 22 November 2016 – An audit report has revealed the degree to which the Australian Prudential Regulation Authority (APRA) has been engaged in serious enforcement action against superannuation funds.

ASIC: Relief for foreign financial service providers from Luxembourg
ASIC – 22 November 2016 – ASIC has extended its relief for foreign financial service providers (FFSPs) from the requirement to hold an Australian financial services (AFS) licence when providing financial services to Australian wholesale clients by Luxembourg fund managers. The relief in ASIC Corporations (CSSF-Regulated Financial Services Providers) Instrument 2016/1109 applies to Luxembourg fund managers. The relief applies until 28 September 2018.


APRA – 22 November 2016 – The Australian Prudential Regulation Authority (APRA) today released its Quarterly Superannuation Performance publication and the Quarterly MySuper Statistics report for the September quarter 2016

.

ASIC bans former Sentinel Private Wealth adviser for 5 years
ASIC – 17 November 2016 – ASIC has banned Stephen Michael Beckton, a financial adviser and former authorised representative of Sentinel Private Wealth Pty Ltd, from providing financial services for 5 years. An ASIC review of Mr Beckton's advice found that he had recommended clients change superannuation and insurance products in circumstances where there was little benefit, but significant cost.

ASIC remakes 'sunsetting' class orders on financial services disclosure
ASIC – 17 November 2016 – ASIC has remade the relief found in each of three class orders relating primarily to the disclosure requirements in Chapter 7 of the Corporations Act, where that relief is considered to still be both necessary and appropriate (2016/1054, 2016/1055, 2016/1056).

AIST submission: Senate Economics: Super reform package of bills
AIST – 16 November 2016 – This package of bills contain tax measures proposed in the 2016 Federal Budget. The Australian Institute of Superannuation Trustees (AIST) generally supports these measures, noting some practical difficulties to implementation. In this submission, AIST encourages prompt passing of the bills to ensure that sufficient time is given to enable implementation by 1 July 2017.

Fund manager capacity no predictor of returns
MEDIA – 15 November 2016 – A new CIFR research paper has cast doubt on the notion that fund manager scale is an important factor when it comes to performance. The study, titled "Capacity Management for Institutional Asset Owners", found that the size of funds under management (FUM) may not have a relationship with performance.

Legislation – Commonwealth

Bills

Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill 2016
Part of a package of four bills in relation to tax arrangements for working holiday makers, the bill amends the Superannuation (Departing Australia Superannuation Payments Tax) Act 2007 to increase the rate of the departing Australia superannuation payments tax to 95% for working holiday makers. Passed by both Houses: 24 November 2016.

Superannuation (Excess Transfer Balance Tax) Imposition Bill 2016
Introduced with the Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016, the bill imposes an excess transfer balance tax on the notional earnings of capital moved into a retirement phase superannuation account that is in excess of $1.6 million. Senate – Third reading agreed to: 23 November 2016.

Superannuation (Objective) Bill 2016
The Bill establishes a legislative framework to guide the development of future superannuation policy. It does this by enshrining the primary objective of the superannuation system in legislation and the subsidiary objectives of the superannuation system in regulation. It requires new bills and regulations relating to superannuation to be accompanied by a statement of compatibility with the objective of the superannuation system. The subsidiary objectives of the superannuation system will be prescribed by regulation. Senate – Second reading moved: 23 November 2016. Part 5 of Schedule 10 to the Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016 makes a consequential amendment to the Legislation Act 2003 to require a statement of compatibility with the objective of the superannuation explanatory statement for a regulation relating to superannuation.

Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016
A Bill for an Act to amend the law relating to taxation and superannuation. Introduced with the Superannuation (Excess Transfer Balance Tax) Imposition Bill 2016, the bill amends five Acts to impose a $1.6 million cap on the amount of capital that can be transferred to the tax-free earnings retirement phase of superannuation. Passed by both Houses: 23 November 2016.

Regulations

ASIC Corporations (Ongoing Fees Code) Instrument 2016/1129
This instrument approves the FPA Professional Ongoing Fees Code dated 28 September 2016 and issued by the FPA, as in force at the date of this instrument. This legislative instrument exempts a person who receives fees under an ongoing fee arrangement from giving the client a written renewal notice every 2 years which requires the client to opt-in to renew that agreement, on the conditions set out in the instrument. Registered: 24 November 2016. Tabled in House of Representative and Senate: 28 November 2016.

ASIC Corporations (Updated Product Disclosure Statements) Instrument 2016/1055
This instrument continues the substantive effect of the relief granted by CO 03/237 which grants relief from the requirements in section 1012J in certain circumstances. Registered: 16 November 2016. Tabled in House of Representatives and Senate: 21 November 2016.

ASIC Corporations (Repeal) Instrument 2016/1053
This instrument repeals the ASIC Class Order [CO 02/1072], ASIC Class Order [CO 03/1092], and ASIC Class Order [CO 03/237]. Registered: 16 November 2016. Tabled in House of Representatives and Senate: 21 November 2016.

ASIC Corporations (Top-up Product Disclosure Statements Relief) Instrument 2016/1054
This instrument continues the substantive effect of the relief granted by CO 02/1072 which grants an exemption from sections 1012A, 1012B and 1012C in certain circumstances. Registered: 16 November 2016. Tabled in House of Representatives and Senate: 21 November 2016.

ASIC Corporations (Joint Product Disclosure Statements) Instrument 2016/1056
This instrument continues the substantive effect of the relief granted by CO 03/1092 which modifies section 1013A of the Corporations Act and omits regulation 7.9.07J of the Corporations Regulations to permit joint Product Disclosure Statements in certain circumstances. Registered: 16 November 2016. Tabled in House of Representatives and Senate: 21 November 2016.

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.

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