Australia: Inside track: Superannuation, Funds Management & Financial Services - 24 October 2018

Last Updated: 27 October 2018
Article by Chris Lovell, Paul Faure, Bill Glover and Kylie Wilson

Most Read Contributor in Australia, October 2018

In the media

Calls for APRA, ASIC to answer to mega regulator to end the banking scandals
The corporate and prudential regulators have become culturally and intellectually captured by the banks and should be made to answer to a UK-style financial oversight committee, a forthcoming Federal Law Review paper argues (21 October 2018). More...

Australians are now paying a massive $32 billion a year in super fund fees
The latest numbers show Australians are still being hit by increasingly painful costs to have their retirement savings looked after. The fees paid to superannuation funds have risen by 10% over the last year to $32 billion, according to data from Rainmaker Information (18 October 2018). More...

New financial ombudsman reveals strategy ahead of launch
AFCA, the new dispute resolution body which brings together the Financial Ombudsman Service, the Credit and Investments Ombudsman, and the Superannuation Complaints Tribunal, have unveiled its strategy and new brand ahead of being open to taking complaints from consumers and small business on 1 November 2018 (18 October 2018). More...

ASIC cancels AFS licence of retail OTC derivative issuer Direct FX Trading Pty Ltd* for serious compliance failures
Direct FX was in breach of multiple conditions of its AFS licence, which are aimed at protecting investors from the higher operational and credit risks posed by the retail OTC derivative sector. Direct FX ignored key conditions of the notice of suspension by continuing to open new trading positions and failed to comply with its client money reporting obligations whilst suspended (18 October 2018). More...

ASIC cancels AFS licence of Red Summit
ASIC has cancelled the Australian financial services (AFS) licence of WA-based Red Summit Trading Partners Pty Ltd (Red Summit), after it was found that the licensee was not carrying on its financial services business due to staffing changes (17 October 2018). More...

ASIC action on compliance breaches with fees disclosure and renewal notices
ASIC is announcing a review of compliance with requirements for Fee Disclosure Statements and Renewal Notices in the financial advice sector. ASIC's ongoing work on fee for no service failings in the advice industry has highlighted the importance of FDSs and Renewal Notices (12 October 2018). More...

ANZ fires 200 staff for misconduct
The big four bank has revealed that a number of senior executives are included in up to 200 staff whose employment has been terminated as a direct result of misconduct (12 October 2018). More...

Good culture 'can't be left to regulators alone': APRA
In a speech at the Financial Services Institute of Australasia (FINSIA) Summit, APRA chairman Wayne Byres acknowledged regulatory initiative in the pipeline – accountability statements, remuneration restrictions, strengthened governance requirements, greater attention to organisational culture, and more forceful enforcement – will drive change (12 October 2018). More...

Super funds baulk at operational risk reserving
Major superannuation funds have questioned why they should have to retain at least 0.25 per cent of their funds under management to meet Australian Prudential Regulation Authority (APRA) operational risk financial requirements (ORFR) (11 October 2018). More...

ASIC tidies up FASEA regime
The Australian Securities and Investments Commission (ASIC) has tidied up a number of legislative and regulatory anomalies contained within the legislation covering the Financial Adviser Standards and Ethics Authority regime (10 October 2018). More... More...

APRA told not to act ahead of RC/PC findings
The APRA should postpone finalising its post-implementation review of the new superannuation prudential framework until after the Royal Commission and the findings of the Productivity Commission (PC), according to the Australian Institute of Superannuation Trustees (AIST) (9 October 2018). More...

In practice and courts

Credit and financial services targeted at Australians at risk of financial hardship
On 17 October 2018, the Senate referred an inquiry into the Credit and financial services targeted at Australians at risk of financial hardship to the Senate Economics References Committee for inquiry and report by 22 February 2019. Submissions Close: 09 November 2018. More...

Reminder: the Australian Financial Complaints Authority
AFCA is the new one-stop-shop for financial complaints, and will replace the Superannuation Complaints Tribunal (SCT), the Financial Ombudsman Service and the Credit and Investments Ombudsman. SCT set to continue accepting complaints until 31 October 2018. AFCA will commence accepting complaints on 1 November 2018.

ASIC Corporations (Professional Standards—Transitional) Instrument 2018/894 and the explanatory statement
The instrument makes changes to the reporting dates for a number of disclosure obligations in the transition to the new financial adviser professional standards reforms. The reporting changes will simplify licensees' notification obligations and enable ASIC to implement the required systems changes more effectively. These changes do not affect advisers' and licensees' substantive obligations under the professional standards reforms (10 October 2018). More...

Royal Commission update
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was established by the Government in December 2017, with the first of seven public hearings held in March 2018, and the final round to be held in November 2018. More...

Should superannuation funds do more direct lending?
Stephen Anthony; Industry Super Australia
In the right circumstances, superannuation funds could provide capital for growth to SME's and business more generally, complementing more traditional capital sources such as banks, according to this discussion paper (02 October 2018). More...

Reforms to strengthen penalties for corporate and financial sector misconduct – Draft Legislation
The Government consultation on draft legislation to strengthen penalties for corporate and financial sector misconduct has now been completed. The proposed changes would double maximum imprisonment penalties and significantly increase financial penalties for some of the most serious 'white-collar' criminal offences. More...

Parliamentary Joint Committee on Corporations and Financial Services: Opening Statement
Opening statement by James Shipton, Chair, Australian Securities and Investments Commission, Parliamentary Joint Committee on Corporations and Financial Services (19 October 2018). More...

Gazette - Superannuation Industry (Supervision) Act 1993
18/10/2018
Notice of Disqualification - Linda Caines
17/10/2018
Notice of Disqualification - Corie Derrick
16/10/2018
Notice of Disqualification - Tubs M Reti
15/10/2018
Notice of Disqualification - Scott C Darcy

Cases

Folmer v VicSuper Pty Ltd & Anor [2018] NSWSC 1503
INSURANCE — TPD insurance — Plaintiff was member of superannuation fund — Trustee of fund (first Defendant) effected Group policy insurance — Insurance policy with Insurer (second Defendant) — Insurance providing benefits upon total and permanent disablement of member — Plaintiff claims she is totally and permanently disabled after being off work for six months — Trustee declined the Plaintiff's claim — Duty on a trustee of a superannuation fund in determining a claim for a total and permanent disablement benefit — Whether Trustee breached obligations to Insured — Plaintiff not pursuing claim against Trustee by end of the hearing, accepting claim against Trustee to be dismissed.
INSURANCE — Where contract of insurance — Where Plaintiff claimed that she had suffered total and permanent disablement — Whether totally and permanently disabled benefit payable if Insured proved to the satisfaction of Insurer that she was so incapacitated as to be 'unable ever again to work for reward in any business, occupation, or regular duties for which she is reasonably qualified by education, training or experience' — Where insurer denied claim on the basis the claim did not satisfy the definition of TPD — Whether Insurer acted reasonably in considering the claim — Utmost good faith — Whether Insurer breached duty of utmost good faith and fair dealing — Whether Plaintiff totally and permanently disabled within the meaning of the relevant insurance policy — Plaintiff challenges decisions of the Insurer.
INSURANCE — Standard of review adopted by Court — Whether Insurer could reasonably have reached the conclusions it did on the evidence available to it — Whether opinion open to Insurer acting reasonably and fairly on the material before it — Whether Plaintiff was totally and permanently disabled at the assessment date.
Civil Procedure Act 2005 (NSW); Life Insurance Act 1995 (Cth); Superannuation Industry (Supervision) Act 1993 (Cth)

Susan Buswell v TAL Life Limited [2018] NSWSC 1507
INSURANCE – construction of policy – income protection insurance – whether sum given in settlement of a claim for damages for psychological injury constituted Other Disability Income for purposes of policy – where Other Disability Income was deducted from monthly benefits – whether settlement sum was income or capital – whether settlement sum was a benefit under workers' compensation legislation. First State Superannuation Scheme.

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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