Australia: Superannuation, Funds Management & Financial Services News – 23 April 2018

Last Updated: 5 May 2018
Article by Chris Lovell, Paul Faure and Bill Glover

Most Read Contributor in Australia, September 2018

In the media

Boosting penalties to protect Australian consumers from corporate and financial misconduct
TREASURY – 20 April 2018 - The Turnbull Government is strengthening criminal and civil penalties for corporate misconduct and boosting the powers of the ASIC to protect Australian consumers from corporate and financial misconduct. Today's reforms to ASIC's powers and penalties follow recommendations made by the ASIC Enforcement Review Taskforce (The Taskforce). More...

Morrison references jail option for Royal Commission miscreants
MEDIA - 19 April 2018 - The prospect of jail time for miscreant financial services executives has been raised by the Federal Treasurer, Scott Morrison, in the wake of Royal Commission revelations with respect to AMP Limited. More...

Consultation on regulations to protect client money in the financial sector
TREASURY – 17 April 2018 - The Turnbull Government has today released exposure draft regulations (the Regulations) to support and improve the powers of the Australian Securities and Investments Commission (ASIC) to enforce the new client money regime which commenced on 4 April 2018. More...

ASIC bans former Suncorp Financial Services financial adviser for four years
ASIC – 17 April 2018 - ASIC found that Mr Grubwinkler failed to act in his clients' best interests when providing advice on superannuation and insurance. More...

Former financial adviser permanently banned for dishonest conduct
ASIC – 17 April 2018 - ASIC has permanently banned Mr Grant Desmond Taylor, of Montmorency, Victoria from providing financial services after finding he engaged in dishonest and deceptive conduct towards his clients. ASIC also found that Mr Taylor was not of good fame or character. More...

RBA warns about superannuation risks
MEDIA - 16 April 2018 - Superannuation continues to pose a limited risk to Australia's financial stability, says the RBA – but its large size means it could exacerbate a market shock. More...

Financial planning 'doesn't have professional standards', resisting reform
MEDIA – 16 April 2018 - Probably the biggest reason the banking royal commission exists is because of the litany of financial planning scandals which have cost many thousands of people their life savings. More...

Banking royal commission told 90% of financial advisers ignored
MEDIA – 16 April 2018 - Australia's corporate regulator has revealed 90% of financial advisers who provide advice to self-managed super funds have failed to comply with the best interests of their clients. The startlingly high figure was revealed during the financial services royal commission. More...

The royal commission was told $383 million in compensation has been paid out due to dodgy financial planner advice
MEDIA – 16 April 2018 - The number of financial advisers is now 25,000, up from 18,000 in 2009, but only a third have a university degree. In this second round of hearings, the Royal Commission is looking at fees for no service, investment platform fees, inappropriate financial advice, improper conduct by financial advisers, improper conduct by financial advisers. More...

Reform of the Financial Sector (Shareholdings) Act 1998
TREASURY – 16 April 2018 - The Turnbull Government is today releasing exposure draft legislation to relax the restriction on ownership of banks and insurers as well as introducing a new streamlined approval path under the Financial Sector (Shareholdings) Act 1998 (FSSA) as part of this Government's commitment to improving competition in the financial sector). More...

ASIC accepts enforceable undertaking from Commonwealth Bank subsidiaries for Fees for No Service conduct
ASIC – 13 April 2018 - ASIC has accepted an enforceable undertaking (EU) from Commonwealth Financial Planning Limited (CFPL) and BW Financial Advice Limited (BWFA), both wholly owned subsidiaries of the Commonwealth Bank of Australia (CBA). ASIC found that CFPL and BWFA failed to provide, or failed to locate evidence regarding the provision of, annual reviews to approximately 31,500 'Ongoing Service' customers. More...

ISA seeks to debunk retail fund claims
MEDIA - 12 April 2018 - Industry Super Australia (ISA) has told the Productivity Commission (PC) that retail funds should not be allowed to hide behind their older member demographic or greater levels of choice because no empirical evidence exists to support such claims. More...

Consultation on ASIC fees-for-service draft legislation
TREASURY – 11 April 2018 - The Turnbull Government is committed to ensuring that ASIC has the resources and powers it needs to combat misconduct in Australia's financial services industry and bolster consumer confidence in the sector. The Government has today released draft legislation on the second phase of the ASIC industry funding model - the introduction of ASIC fees-for-service. More...

AIST announces new president
AIST – 11 April 2018 - The Australian Institute of Superannuation Trustees (AIST) has announced the appointment of Catherine Bolger as its new President. More...

ASIC reveals 6 key aspects of a 'good' financial system
MEDIA – 10 April 2018 - The financial services regulator has outlined what it believes are the six "key components of a good financial system". More...

AMP admits it misled ASIC over financial advice fee-for-no-service
MEDIA – 10 April 2018 - AMP says it deceived the corporate regulator over fees charged to thousands of customers who were not provided with the financial advice they were being charged for. More...

ASIC maintains scrutiny of SMSF auditors
MEDIA – 10 April 2018 - The Australian Securities & Investments Commission (ASIC) has disqualified two self-managed super fund (SMSF) auditors for a failure to report legislative contraventions and breaches of various requirements. More...

Millennial super fund Spaceship fined for misleading claims
MEDIA – 10 April 2018 - Spaceship, a superannuation fund targeting millennial investors, has been fined by the corporate regulator over misleading claims in its marketing. ASIC has penalised super fund Spaceship for statements made about the investment strategy of one of its portfolios, 'GrowthX', on its website in 2017. More...

In practice and courts

Recommendations made by the ASIC Enforcement Review Taskforce (The Taskforce), 20 April 2018
The Government has agreed, or agreed in principle, to all 50 of the Taskforce recommendations and will prioritise the implementation of 30 of the recommendations. The remaining 20 recommendations relate to self-reporting of breaches, industry codes and ASIC's directions powers, which will be considered alongside the final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The Government's full response to the Taskforce Report can be found on the Treasury website.

Consultation: Financial Sector (Shareholdings) Amendment (Relaxing Ownership Restrictions) Bill 2018
This consultation seeks stakeholder views on the exposure draft of the Financial Sector (Shareholdings) Amendment (Relaxing Ownership Restrictions) Bill 2018 and related explanatory statement. Submissions are due by 4 May 2018. The exposure draft of the legislation is available on the Treasury website (16 April 2018).

ASFA Submissions
Submission Australian Securities and Investments Commission (ASIC)
Response to Consultation Paper 298: Oversight of the Australian Financial Complaints Authority – update to RG 139. 06 April 2018: Full Submission

Current Inquiries - Economics Legislation Committee
Consumer protection in the banking, insurance and financial sector
Status: Referred: 29 November 2016. Reporting Date: 28 March 2018.
On 14 February 2018, the Senate granted an extension of time to report by 26 June 2018.


SAS Trustee Corporation v Rossetti [2018] NSWCA 68
Appeal allowed JURISDICTION – whether Supreme Court has jurisdiction to review STC decisions under the Police Regulation (Superannuation) Act 1906 (NSW), s10B pursuant to Superannuation Administration Act 1996 (NSW), s88 – whether jurisdiction vested in District Court pursuant to Police Regulation (Superannuation) Act, s21(1).

Board of Trustees of the State Public Sector Superannuation Scheme v Gomez [2018] QCA 67
The Board's appeal is dismissed. Mr Gomez's cross-appeal is dismissed.
EQUITY – TRUSTS AND TRUSTEES – PROCEEDINGS BETWEEN TRUSTEES AND BENEFICIARIES OR THIRD PARTIES – where the respondent/cross-appellant claimed a total and permanent disablement (TPD) benefit under the superannuation scheme administered by the appellant/cross-respondent – where the claim for a TPD benefit under the superannuation scheme was rejected on the basis the claim did not satisfy the definition of TPD – where the trial judge ordered a reconsideration of the Board's decision to decline payment – whether the decisions made by the Board and the Board's delegate were open on the evidence – whether the Trustee's duty to give properly informed consideration was met – whether the delegation to the Board's delegate was effective.
APPEAL – PRACTICE AND PROCEDURE – QUEENSLAND – POWERS OF COURT – COSTS – where costs were awarded on the basis that the best outcome the respondent/cross-appellant could achieve was remitter back to the Trustee – where the trial judge considered costs were unnecessarily incurred in preparation for trial.

Williams v IS Industry Fund Pty Ltd [2018] FCA 529
SUPERANNUATION – appeal against the Superannuation Complaints Tribunal – whether there was an 'interdependent' relationship – whether there was jurisdictional error – no such error – appeal dismissed. Superannuation (Resolution of Complaints) Act 1993 (Cth) ss37(6), 46. Superannuation Industry (Supervision) Act 1993 (Cth) ss10, 10A. Superannuation Industry (Supervision) Regulations 1994 =(Cth) reg 1.04AAAA(1).

Corkhill v Commonwealth of Australia (No 3) [2018] ACTSC 87
There be judgment for the defendant. SUPERANNUATION – PUBLIC SERVICE SCHEMES – Availability of public service schemes to temporary Commonwealth employees – no statutory duty to inform every potentially affected employee as to their eligibility – Superannuation Act 1922 (Cth) – Superannuation Act 1976 (Cth) – Superannuation Act 1990 (Cth).
TORTS – NEGLIGENCE – Duty of care – claim of negligent misrepresentation – whether alleged misrepresentation and negligence arose from representations about operation of superannuation schemes – claim not made out.



Bills assented

ASIC Supervisory Cost Recovery Levy Amendment Bill 2017
Assent Act No: 24 11 April 2018 - Introduced with the Treasury Laws Amendment (2017 Measures No. 5) Bill 2017, the bill amends the ASIC Supervisory Cost Recovery Levy Act 2017 to add benchmark administrator licensees to the list of entities from which the Australian Securities and Investments Commission may recover its regulatory costs.


Superannuation (prudential standard) determination No. 1 of 2018
19 April 2018 - This instrument determines Superannuation (prudential standard) determination No. 1 of 2018, and revokes Superannuation (prudential standard) determination No. 3 of 2013 - Prudential Standard SPS 310 - Audit and Related Matters.

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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