Australia: Superannuation, Funds Management & Financial Services News – 27 August 2018

Last Updated: 31 August 2018
Article by Chris Lovell, Paul Faure, Bill Glover and Kylie Wilson

Most Read Contributor in Australia, September 2018

In the media

The Hon Kelly O'Dwyer MP launches the 2018 National Financial Capability Strategy
The Minister for Revenue and Financial Services has launched the 2018 National Financial Capability Strategy at an event at Parliament House in Canberra. The 2018 National Financial Capability Strategy was formed from a consultation process that included over 145 submissions from stakeholders and replaces the 2014-2017 National Financial Literacy Strategy (21 August 2018). More...

The great super swindle: How your savings helped boost bank bonuses
The main theme to emerge from the banking royal commission is the flagrant disregard with which clients are held by the industry, manifested in the fee gouging that has become standard industry practice (20 August 2018). More...

Senators back super reforms
A Senate committee reviewing the Government's planned reform of life cover in superannuation has backed the measures. Phasing out exit fees on super accounts and removing default cover for under-25s and members with low balances are among key measures in the Treasury Laws Amendment Bill (20 August 2018). More...

ASIC defends enforceable undertakings at Royal Commission
ASIC's favourite method of tackling misconduct came under fire as the Royal Commission capped off its round of superannuation hearings on Friday (17 August 2018). More...

Banks face criminal charges and $1b bill in fee-for-no-service scandal
A bad week for the big banks and AMP got a whole lot worse, with confirmation ASIC is likely to pursue them through the courts over the fee-for-no-service scandal and demand they refund around $1 billion worth of fees already charged (17 August 2018). More...

Federal Court rules partly in favour of DomaCom
A Federal Court ruling on a potential breach of the Sole Purpose Test has been termed a "milestone" for the SMSF industry, however there are still hurdles to clear before sub-funds are not considered in-house assets or related trusts under the SIS (Superannuation Industry Supervision) Act (14 August 2018). More...

Royal Commission accuses IOOF of making members pay compensation for a fund error
The banking Royal Commission ended the week by turning its attention to whether conflicts of interest caused IOOF to put profits before its super members' interests, potentially including making them pay part of their own compensation (10 August 2018). More...

ASIC's latest enforcement report highlights outcomes from the first half of 2018
ASIC has released its enforcement outcomes report for the period 1 January 2018 to 30 June 2018. These matters relate to several ongoing areas of focus, presented by the areas ASIC enforces: corporate governance, financial services, market integrity and small business (9 August 2018). More...

Governance Institute highlights importance of ASIC dealing with the risk of regulatory capture
The corporate regulator needs to spell out in more detail how its proposal to embed its staff as governance watchdogs inside banks will work in practice, says the Governance Institute of Australia (9 August 2018). More...

In practice and courts

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.

AIST Submissions
Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Power) Bill 2018
The proposed product intervention power and identification of target markets cannot work unless systemic gaps in the disclosure and reporting framework are fixed. The proposals should apply to product manufacturers, and not just those entities issuing PDSs: this would ensure all stages of intermediated product and distribution are included (15 August 2018).

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 website.

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 released are available on APRA's website. More...


Narumon Pty Ltd, Re [2018] QSC 185
SUPERANNUATION – PRIVATE SECTOR FUNDS – INTERPRETATION AND CONSTRUCTION – where a deed of variation of the terms of a self-managed superannuation fund was not properly executed by the trustee company, in accordance with s 127 of the Corporations Act 2001 (Cth) – whether a subsequent deed of variation is nevertheless valid and effective.
SUPERANNUATION – PRIVATE SECTOR FUNDS – TRUSTEES – POWERS AND DUTIES – where there is evidence supporting the establishment of a lifetime complying pension, and nomination of a reversionary beneficiary of that pension, but the actual documents cannot be located – whether it is appropriate to grant declaratory relief directing the trustee to give effect to the reversionary pension.
SUPERANNUATION – BENEFITS – MATTERS AFFECTING ENTITLEMENT TO AND PAYMENT OF – OTHER MATTERS – where the member of a self-managed superannuation fund had made a binding death benefit nomination which had lapsed prior to the member losing capacity – where the member had appointed attorneys to act for him in relation to financial matters under an enduring power of attorney – whether it is within the scope of the power of the attorneys to execute for the member a document extending the binding death benefit nomination made personally by the member – whether it is within the scope of the power of the attorneys to execute for the member a new binding death benefit nomination.

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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