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).
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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).
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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).
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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).
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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).
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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).
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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).
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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).
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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).
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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.
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Cases
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.