In the media
ASIC warns trustees about protecting your super laws and
provides guidance for consumers
ASIC has called on superannuation trustees to provide
helpful and balanced communications to their members regarding the
Protecting Your Super package (PYSP) of reforms,
which are due to take effect on 1 July 2019 (17 April 2019).
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Super fund mergers to define 2019
A new report into the superannuation industry from KPMG
suggests that 2019 will be defined by mergers and consolidation
between super funds as they seek to deliver improved member
outcomes (16 April 2019).
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APRA releases new enforcement approach
The APRA has released details on the future role and use
of enforcement activities in achieving its prudential objectives.
The APRA Members formally commissioned the Enforcement Review last
November in response to a range of developments, including the
evidence presented to the Royal Commission into Misconduct in the
Banking, Superannuation and Financial Services Industry, and
proposals to give APRA expanded enforcement powers, particularly in
superannuation (16 April 2019).
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Citigroup to refund over $3m to clients
Following an ASIC investigation, Citigroup will refund
over $3 million to 114 retail customers for losses arising out of
structured product investments offered between 2013 and 2017. ASIC
was concerned that while Citigroup considered its financial
advisers to be providing general advice, elements of its practice
may have led some customers to believe that Citigroup was providing
personal advice (15 April 2019).
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ASIC warns on overseas derivatives
ASIC has warned Australian financial services licensees
that offer over-the-counter derivatives to retail investors located
overseas could be breaking laws abroad, with Chinese authorities
having alerted the watchdog that some online platforms have engaged
in illegal activity (15 April 2019).
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AIST research shows just how poor banking-owned super
products are
The Fee and Performance Analysis 2019 by leading
superannuation research house SuperRatings, commissioned by AIST,
drills down into the differences between fees and returns across
the many super products on offer and finds significant disparities
between the fees charged by for-profit retail funds and
profit-to-member funds (14 April 2019).
More...
Some AFS licensees may be breaking overseas laws
AFS licensees are on notice that in addition to overseas
consequences of potential breaches of overseas law, ASIC will
consider whether breaching overseas law is consistent with
obligations under Australian law to provide services
'efficiently, honestly and fairly (11 April 2019).
More...
Consumer disclosure delay to hurt super outcomes
The Australian Institute of Superannuation Trustees has
warned that ASIC's delay on consumer disclosure requirements
will damage retirement outcomes. The requirement would mandate a
standardised disclosure of fees and performance, called product
dashboards, for all their super products, which funds only
currently have to provide for their default
(MySuper) products (10 April 2019).
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FASEA welcomes new directors
The Financial Adviser Standards and Ethics Authority
(FASEA) notes the Government's announcement of
the appointment of Elissa Freeman and Louise Lakomy to the Board
effective 11 April 2019 (11 April 2019). More...
ASIC releases final report on CBA's compliance with
financial advice licence conditions
ASIC released KordaMentha Forensic's final report on
CBA's advice compensation program under its additional licence
conditions. ASIC took this action because the licensees did not
apply review and remediation processes consistently to customers of
15 financial advisers, disadvantaging some customers (10 April
2019).
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ASIC winds up abandoned companies owing more than
$410,000 in employee entitlements
ASIC has assisted employees gain access to the Fair
Entitlements Guarantee scheme (FEG) by exercising
its wind-up powers and appointing liquidators to five abandoned
companies (10 April 2019).
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AICD responds to ALRC review of corporate criminal
responsibility regime
The announcement of an Australian Law Reform Commission
(ALRC) review of Australia's corporate
criminal responsibility regime provides a further opportunity to
assess the full accountability framework for corporate misconduct
(10 April 2019).
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Review into Australia's corporate criminal
responsibility regime
The Morrison Government has commissioned the Australian
Law Reform Commission (ALRC) to undertake a
comprehensive review of the corporate criminal responsibility
regime (10 April 2019).
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ASIC welcomes FRC report on audit enforcement
ASIC has welcomed the release of the report by
Australia's Financial Reporting Council (FRC)
Auditor Disciplinary Processes: Review and the Federal
Government's response to that report. ASIC will re-evaluate its
criteria for taking auditor enforcement actions, and the types of
outcomes that it may seek, including the use of enforceable
undertakings and referrals of matters to the CADB (09 April 2019).
More...
ASIC enforcement update July to December 2018
ASIC has released its enforcement update report for the
period 1 July 2018 to 30 December 2018.The report also covers
ongoing areas for particular focus, including criminal sanctions
against banks, their executives and others who have breached
corporate and financial services law. See the report
here (09 April 2019).
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In practice and courts
Australian Law Reform Commission (ALRC): Review into
Australia's corporate criminal responsibility regime
The reports which the ALRC should consider should include
but not be limited to the: 2019 Final report of the Royal
Commission into Misconduct in the Banking, Superannuation and
Financial Services Industry; and 2017 report of the ASIC
Enforcement Review Taskforce.
The ALRC should provide its report to the Attorney-General by 30
April 2020.
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ASIC report 615: enforcement update 1 July to 30
December 2018
A copy of the report - outlining key actions taken over
the past six months to enforce the law and support our enforcement
objectives - can be found
here. The report also covers ongoing areas for particular
focus, including recent reforms enabling ASIC to pursue harsher
civil penalties and criminal sanctions against banks, their
executives and others who have breached corporate and financial
services law (09 April 2019).
More...
Resolution of disputes with financial service providers
within the justice system
Senate Legal and Constitutional Affairs Committee;
Parliament of Australia: 08 April 2019
This inquiry explored the ability of consumers and small businesses
to exercise their legal rights through the justice system, and
whether there are fair, affordable and appropriate resolution
processes to resolve disputes with financial service providers. More...
APRA consultation: The Financial Sector (Shareholdings)
Rules 2019 (the Rules)
In particular, APRA has proposed Rules setting out the
matters that must be considered in determining if a person is
"fit and proper" for the purposes of the FSSA. The
consultation period on the proposed Rules has now commenced, with
APRA accepting submissions until 27 May 2019. Copies of the draft
Rules and explanatory material are available
here.
ASFA reminder: Recovering your unclaimed money
From the 27th June 2019 applications for unclaimed monies
under s254 of the Bankruptcy Act can be made directly to Australian
Financial Security Authority (AFSA) replacing the
current Court application process. An application form and further
information about the new process will be published closer to the
commencement date.
More...
IFAC: Global consultation on quality management for
firms and engagements now open
The International Auditing and Assurance Standards Board
(IAASB) seeks public comment by July 1, 2019 on three interrelated
standards that address quality management. The proposals bring
important changes to the way professional accountancy firms are
expected to manage quality—for audits, reviews, and other
assurance and related services engagements.
APRA and ASIC publish joint letter on superannuation
fees
See the
Letter: Oversight of fees charged to members' superannuation
accounts (10 April 2019).
AIST research: Fee and performance analysis
AIST has commissioned SuperRatings to examine the
differences in fees and returns of profit-to-member funds compared
with for-profit funds run mainly by banks. The report shows that
the median profit-to-member MySuper has delivered 6.47% pa to
members over 3 years – well in excess of the 4.94% per annum
by bank and retail-owned super funds (10 April 2019).
More...
AIST submissions
12 April 2019 - Enforceability of financial services industry
codes - Code enforcement should generally be the responsibility
of an independent body(such as a regulator) rather than a code
owner.
10 Apr 2019 - APRA capability review - AIST recommends a new superannuation mandate to better reflect APRA's role; an integrated governmental superannuation data framework to support improved data collection, reporting and analysis; and makes numerous recommendations to improve supervisory arrangements.
10 Apr 2019 - Consultation paper 308: Review of RG 97 disclosing fees and costs in PDSs and periodic statements - This submission raises concerns that the latest fee and cost disclosure proposals from the Australian Securities and Investments Commission (ASIC) will deny consumers who invest their super through platforms and managed investment schemes (MIS) important consumer protection measures.
ASFA submissions
10 April 2019 submission to the treasury - APRA capability
review
FSC submissions
FSC submission - APRA capability review - 10 April 2019
AFCA newsletter
AFCA News, contains case studies, articles and
information that is relevant to members and consumers. See edition
2, 10 April 2019
Cases
Howard v Batistich [2019] FCA
525
SUPERANNUATION – appeal on a question of law from
decision of the Superannuation Complaints Tribunal – whether
Tribunal wrongly identified the question it had to answer –
whether Tribunal failed to give the term 'de facto partner'
its proper statutory construction – whether Tribunal failed
to give adequate reasons.
Acts Interpretation Act 1901 (Cth) s 25D;
Superannuation (Resolution of Complaints) Act 1993 (Cth)
ss 37(6), 40, 46; Interpretation Act 1987 (NSW) s 21C;
Superannuation Act 1916 (NSW) s 3
Legislation
Commonwealth
Acts
Treasury Laws Amendment (2019 Measures No. 1) Act
2019
10/04/2019 - Act No. 49 of 2019 as made - An Act to amend
the law relating to superannuation, taxation, corporations,
financial services, consumers, competition and statistics. Date of
Assent 05 April 2019.
Corporations Amendment (Strengthening Protections for Employee
Entitlements) Act 2019
10/04/2019 - Act No. 44 of 2019 as made -An Act to amend
the law relating to protecting employee entitlements, Date of
Assent 05 April 2019.
Treasury Laws Amendment (Mutual Reforms) Act 2019
10/04/2019 - Act No. 37 of 2019 as made. An Act amending
the: Corporations Act 2001 to: introduce a definition of
'mutual entity'; clarify for transferring financial
institutions and friendly societies that the demutualisation
provisions apply only if an entity no longer meets the new
definition of a mutual entity. Date of Assent 05 April 2019.
Bills
Treasury
Laws Amendment (Design and Distribution Obligation and Product
Intervention Powers) Bill 2019
Finally passed both Houses - 03 April 2019 - The new law
requires financial service providers to design and sell products
with a target market in mind. While the vast majority of
Australians benefit from quality products, this new regime offers
an extra layer of protection.
More...
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.