In the media
APRA responds to court decision on IOOF action
The court has dismissed APRA's application for a
finding that IOOF entities, directors and executives had
contravened their obligations under the Superannuation Industry
Supervision Act 1993. Accordingly, the case cannot proceed to
a hearing on penalties, including disqualification (20 September
2019).
More...
ASIC remakes instrument about departed former temporary
residents' unclaimed superannuation disclosure
ASIC has remade Class Order [CO 09/437] Departed former
temporary residents superannuation – Disclosure relief, which
was due to expire on 1 October 2019. The new instrument, will
continue to provide relief for trustees of regulated superannuation
funds from certain obligations in the Corporations Act
2001 (19 September 2019).
More...
Government passes legislation to protect low balance and
young superannuation members
The retirement savings of Australians will be protected
from inappropriate insurance with the passage of legislation
through the Parliament. The Treasury Laws Amendment (Putting
Members' Interests First) Act 2019 will require insurance
in superannuation for new members under 25 and members with low
balance accounts to only be offered on an opt-in basis from 1 April
2020 (19 September 2019).
More...
Extending the superannuation guarantee amnesty to
reunite members with unpaid super
The Government reintroduced legislation to establish a
one-off amnesty for historical underpayment of superannuation
guarantee. The Bill incentivises employers to come forward and do
the right thing by their employees by paying any unpaid
superannuation in full (18 September 2019).
More...
Unpaid super amnesty extended
Senator Jane Hume, announced a Bill to help incentivise
employers to come forward and pay any unpaid super in full,
including interest, therefore avoiding late payment penalties.
However, those who did not take part in the amnesty, faced higher
penalties when they were subsequently caught (18 September 2019).
More...
AFCA makes submissions to two ASIC consultations
AFCA has made submissions in response to ASIC
consultations, as part of our commitment to be a fair, ethical and
trusted service (18 September 2019).
More...
ClearView compliance review results in $730,000
compensation to clients
Australian financial services licence holder ClearView
Financial Advice Pty Ltd (ClearView) has completed
a review and remediation program for over 200 clients who received
poor life insurance advice. A sample review of ClearView's
advice files highlighted broad areas of concern such as inadequate
needs analysis for client, insufficient explanation about the pros
and cons of using superannuation to fund insurance premiums (18
September 2019).
More...
Online fraud syndicate dismantled after allegedly
siphoning millions from shares and superannuation accounts
A 21-year-old Melbourne woman is due to appear before
Court as part of investigations into a major fraud and identity
theft syndicate, which resulted in alleged thefts from the
superannuation and share trading accounts of innocent victims worth
of millions of dollars (17 September 2019).
More...
Consultation begins on new ASIC powers
Treasury is seeking feedback on its draft legislation that
would expand the supervisory powers of the ASIC. The exposure draft
legislation is further evidence of the government's commitment
to strengthening financial regulators like ASIC and restoring trust
in the financial system as part of our plan to build a stronger
economy (16 September 2019).
More...
FSC supports no hawking of insurance
CEO Sally Loane said it is important to note that the
industry has already made significant improvements through better
use of monitoring and oversight, through remuneration practices,
appropriate incentives, culture, training and the FSC Life
Insurance Code of Practice. These anti-hawking measures ensure the
conduct on all calls is at the highest standards (17 September
2019).
More...
AFCA targets insurers in national tour
The Australian Financial Complaints Authority is kicking
off a six-month roadshow aimed at addressing Australians' lack
of awareness on how to resolve a dispute with insurers and other
financial firms (16 September 2019). More...
Financial Institutions Supervisory Levy
Methodology
AIST supports focussed and properly resourced regulators
however recommends that the raising of any levies on the industry
to cover this should be on a risk-weighted basis (13 September
2019).
More...
Taking action on the Banking, Superannuation and
Financial Services Royal Commission – Consultation on new
financial product design and distribution obligations
The Coalition Government has released for consultation
exposure draft regulations to support the operation of updated
Design and Distribution Obligations for financial products, which
will further improve consumer outcomes requiring issuers and
distributors of financial products to ensure products are only sold
to customers for whom they are likely to be suitable (12 September
2019).
More...
Inquiry into FinTech a boon for Australian consumers
The Financial Planning Association of Australia welcomes the creation of a Senate Select Committee on Financial Technology and Regulatory Technology as recognition of the critical roles Fintech and RegTech play in delivering affordable, high-quality financial advice to Australian consumers (12 September 2019). More...
ASIC prepares to be primary super conduct
regulator
ASIC commissioner Sean Hughes has made it clear the
regulator is already positioning itself to be the primary conduct
regulator in superannuation (12 September 2019).
More...
Super funds also exposed to ASIC search warrant
powers
Superannuation funds face the same likelihood as financial
advice firms of being subject to an ASIC search warrant under new
exposure draft legislation revealed by the Government. The draft
legislation makes clear that ASIC would be able to seek a search
warrant under the Superannuation Industry (Supervision)
Act as well as the Consumer Credit Protection Act and
the Retirement Savings Account Act (12 September 2019 ).
More...
AFCA updates Rules to name financial firms
AFCA has announced its latest Rule change allowing the
authority to identify financial firms in published determinations
updated and published on the AFCA website (11 September 2019).
More...
ASIC suspends the AFS licence of Financial Options Pty
Ltd
ASIC has suspended the Australian financial services
(AFS) licence of Queensland-based financial
services provider Financial Options Pty Ltd until 26 February 2020.
The licence was suspended because ASIC was concerned that Financial
Options was not meeting its obligations as an AFS licensee (10
September 2019).
More...
ASIC extends relief for foreign financial services
providers
ASIC has extended to 31 March 2020 licensing relief for
foreign financial services providers to allow them to provide
certain financial services to Australian wholesale clients without
needing to hold an Australian financial services licence (10
September 2019).
More...
Taking action on the Banking, Superannuation and
Financial Services Royal Commission - Recommendation 2.4:
Grandfathered Commissions
The Coalition Government passed legislation through the
House of Representatives to end the payment of grandfathered
conflicted remuneration to financial advisers. Under the Bill,
conflicted remuneration paid to financial advisers will be banned
from 1 January 2021 (11 September 2019).
More...
Westpac facing class action for allegedly short-changing
members
Westpac has received a class action against two of its
subsidiary companies in the latest legal action against the big
bank. The action relates to aspects of BTFM's BT Super for Life
cash investment option with the damages sought by the claim
unspecified at the time (09 September 2019).
More...
ATO unpaid super action welcome but 99 per cent of
workers still short-changed
Moves by the Australian Tax Office to go after those
employers not paying their workers super are welcome but barely
scratch the surface of the problem Industry Super Australia says
(09 September 2019).
More...
In practice and courts
Does higher superannuation reduce workers'
wages?
Kyle Taylor; The McKell Institute: 16 September 2019
Despite many claims to the contrary, this paper finds there is
scant empirical evidence of a causal relationship between
superannuation increases and low wage growth and it suggests that
increasing the Superannuation Guarantee 2.5 percentage points will
give workers a share of productivity. More...
Consultation begins on new ASIC powers
Consultation dates: 11 September 2019 - 09 October
2019
Treasury is seeking feedback on its draft legislation that would
expand the supervisory powers of the ASIC. The draft legislation
also strengthens ASIC's licensing powers by increasing the
standards required of an Australian Financial Services Licence
holder, at both the time of application and on an ongoing basis,
and extends ASIC's powers so it may ban a person from
performing functions in a financial services or credit business. More...
Corporations Amendment (Design and Distribution
Obligations) Regulations 2019
Consultation dates: 12 September 2019 - 11 October 2019 -
The Government has released for public consultation exposure draft
regulations to support the Treasury
Laws Amendment (Design and Distribution Obligations and Product
Intervention Powers) Act 2019 and an explanatory
statement. More...
Reminder: AFCA naming and shaming from
October
The Australian Financial Complaints Authority
(AFCA) has confirmed a starting date for it to
name firms in its determinations, with the watchdog to start
exposing perpetrators from 1 October. The rules which were approved
by ASIC in August will allow AFCA to publish the names of financial
firms in all determinations.
More...
AFCA updates Rules to name financial firms
The updates to the Rules allow AFCA to name financial
firms in determinations that are issued and published from 1
October 2019. The Operational Guidelines explain in more detail how
AFCA will apply the Rules. See the Rules
and Operational Guidelines (11 September 2019).
FASEA releases additional practice questions
FASEA has released additional practice questions to help
advisers prepare for the Exam (11 September 2019).
More...
Exposure Draft and comment letters—Amendments to
IFRS 17
Comments due by 25 September 2019.
More...
Exposure Draft and comment letters—Reference to
the conceptual framework (Amendments to IFRS 3)
Comments due by 27 September 2019.
More...
Proposal to remove special purpose financial statements
for certain for-profit private sector entities (AASB ED 297)
– Have your say!
ED 297 Removal of Special Purpose Financial Statements for Certain
For-Profit Private Sector Entities is proposing to
remove the ability of for-profit large proprietary, unlisted public
(other than companies limited by guarantee) and small
foreign-controlled companies to publicly lodge special purpose
financial statements (SPFS) with ASIC. Comments
close 15 November 2019
More...
ASIC consultation: New guidance for companies on
whistleblower policies
ASIC is calling for public input on its proposed guidance
on the new legal obligation on companies to implement a
whistleblower policy, which must be made available to their
officers and employees by 1 January 2020. The Proposed Regulatory
Guide Whistleblower policies explain how companies can establish,
implement and maintain a policy.
More...
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 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. ASIC has
extended licensing relief for foreign financial services providers
to 31 March 2020 to allow them to provide certain financial
services to Australian wholesale clients without needing to hold an
Australian financial services licence (10 September 2019).
More...
ASIC CP 300 approval and oversight of compliance schemes
for financial advisers
The proposals in CP 300 Approval and oversight of
compliance schemes for financial advisers have been outlined
outlined, with an intention to release a regulatory guide setting
out our final policy by the end of September 2010.
More...
ASFA submissions
Submission to The Treasury - Consultation on Financial
Institutions Supervisory Levies methodology.
More...
FSC submissions
17 September 2019 -
FSC SUBMISSION - Putting Members Interest First
AIST policy news - 13 September 2019
Policy News - Regulators set to "name names" on
poor insurance handling; ASIC not responsible for your ethical
behaviour: Danielle Press; Seniors advocacy group joins calls for
changes to Age Pension taper rate; Treasury taskforce to address
regulatory barriers to infrastructure investing and Royal
Commission implementation a priority says Treasury.
More...
AIST policy news - 19 September 2019
19 September 2019 - Coming soon.
More...
Current AFCA matters
Sterling
Group investors (Updated September 2019).
Gazette - Superannuation Industry (Supervision) Act 1993
16/09/2019
Notice of Disqualification – Lee-Anne Tricia
Schoonens; Kane Schoonens
13/09/2019
Notice of Disqualification – Luke John Schoonens;
Garry J Jaques; Sally-Ann J Robertson; Tamer Avsar
10/09/2019
Notice of Disqualification – Ronald Peel; Tohuia
Tupou; Tevita Tupou
09/09/2019
Notice of Disqualification - Jennifer Harrison
Cases
Aslami v Board of Trustees of the State Public Sector
Superannuation Scheme as Trustee for the QSuper Fund
[2019] FCA 1560
SUPERANNUATION – appeal from a judgment of the
Superannuation Complaints Tribunal (Tribunal) to affirm a decision
of the Board of Trustees of the State Public Sector Superannuation
Scheme for the QSuper Superannuation Fund to decline the
appellant's claim for a total and permanent disablement benefit
– construction of the phrase "education, training or
experience" – whether the Tribunal adopted the correct
approach – whether the Tribunal applied the correct test
– appeal dismissed
Administrative Appeals Tribunal Act 1975 (Cth);
Superannuation (Resolution of Complaints) Act 1993
(Cth).
Australian Securities and Investments Commission v Gallop
International Group Pty Ltd, in the matter of Gallop International
Group Pty Ltd [2019] FCA
1514
CORPORATIONS –allegations that two companies
contravened s 911A and s 1041H of the Corporations Act
2001 (Cth) and s 12DA and s 12DB(1)(e) of the Australian
Securities and Investments Commission Act 2001 (Cth) –
whether the companies conducted a business in this jurisdiction
without holding an Australian Financial Services Licence –
where financial services business promoted on two websites
accessible in this jurisdiction – where websites remained
accessible following the cancellation of each company's licence
– whether conduct of uploading accessible conduct to each
website was attributable to both companies – whether
representations accessible on website were false or misleading in
contravention of s 12DB(1)(e) of the Australian Securities and
Investments Commission Act 2001 (Cth) – whether
continued conduct of financial services business by first defendant
constituted misleading or deceptive conduct in contravention of s
12DA of the Australian Securities and Investments Commission
Act 2001 (Cth) and s 1041H of the Corporations Act
2001 (Cth) – contraventions established against first
defendant – no contraventions established against second
defendant.
CORPORATIONS – whether third defendant aided, abetted,
counselled, procured or was otherwise knowingly concerned in the
first defendants' contraventions of s 12DB(1)(e) of the
Australian Securities and Investments Commission Act 2001
(Cth) – nature and extent of involvement – assessment
of pecuniary penalty.
CORPORATIONS – whether second and fourth defendants should be
wound up on just and equitable grounds where no contraventions
established against them.
CORPORATIONS – whether third defendant should be disqualified
from managing corporations – whether third defendant should
be permanently restrained from involvement in a financial services
business in this jurisdiction.
EVIDENCE – where defendants fail to appear at trial –
where court satisfied the defendants are aware of the proceedings
the orders sought against them – consideration of the
inferences that may be drawn from the defendants' failure to
adduce evidence in respect of matters within their knowledge.
Australian Securities and Investments Commission Act 2001
(Cth) ss 5, 12AC, 12BA, 12BB, 12DA, 12DB, 12GBA, 12GD, 12GH, 12GJ,
12GLD, 19, 77
Corporations Act 2001 (Cth) ss 9, 79, 206E, 461, 462, 464,
465A, 761A, 763A, 763B, 766A, 766C, 769B, 911A, 911D, 912A, 912D,
913B, 915B, 1041H, 1317QD, 1324
Trade Practices Act 1974 (Cth) s 86, Pt VI
Treasury Laws Amendment (Strengthening Corporate and Financial
Sector Penalties) Act 2019 (Cth) Schs 1, 2
Federal Court (Corporations) Rules 2000 (Cth) r 5.11.
Australian Prudential Regulation Authority v Kelaher
[2019] FCA 1521
SUPERANNUATION – whether two entities and their
directors contravened s 52 and s 52A of the Superannuation
Industry (Supervision) Act 1993 (Cth) (SIS Act) –
trustee's duties – duties of trustee directors –
alleged contraventions of statutory covenants – care, skill
and diligence – best interests of the beneficiaries –
conflicts of interest – whether the governing rules of the
trusts exclude liability for the alleged contraventions –
prudent person and prudent superannuation trustee standards of care
– inadequate proof of contraventions – application
dismissed.
Inabu Pty Ltd as trustee for the Alidas Superannuation Fund
v CIMIC Group Ltd [2019] FCA
1480
CORPORATIONS – interlocutory application to strike
out paragraphs of the applicant's further amended statement of
claim –– pleadings in paragraphs 33, 34, 37 and 38
insufficiently clear – whether paragraph 41 consistent with
the deficiency found in Zonia Holdings Pty Ltd v Commonwealth
Bank of Australia Ltd [2018] FCA 659 – paragraph 41
sufficiently clear – orders sought in interlocutory
application made in part.
MetLife Insurance Limited v MX
[2019] NSWCA 228
SUPERANNUATION – accident and sickness insurance
– benefits for disablement – where benefits insured
under group life policy – benefit for "total and
permanent disability" – where insurer declined claim
twice – where the insurer's second decision took into
account its first decision – whether insurer took into
account irrelevant consideration – whether insurer in breach
of its contractual duty – whether insurer acted reasonably
and fairly in its consideration of the claim.
Legislation
Commonwealth
Treasury Laws Amendment (2019 Measures No. 2) Bill
2019
Introduced HR 18/09/2019
A Bill for an Act to amend the law relating to taxation,
competition, energy and superannuation, and for related
purposes.
Treasury Laws Amendment (Recovering Unpaid Superannuation)
Bill 2019
Introduced HR 18/09/2019
The Superannuation guarantee amnesty provides for a one-off amnesty
to encourage employers to self-correct historical SG
non-compliance. The amendments also limit the Commissioner's
ability to remit penalties for historical SG non-compliance, where
an employer fails to disclose information relevant to their
historical SG shortfall.
Treasury Laws Amendment (Putting Members' Interests
First) Bill 2019
Finally passed both Houses 19/09/2019
Amends the: Superannuation Industry (Supervision) Act 1993
to prevent trustees from providing insurance on an opt out basis to
members who are under 25 years old and begin to hold a new product
on or after 1 October 2019, and to members who hold products with
balances below $6000; and Superannuation (Unclaimed Money and
Lost Members) Act 1999 to make consequential amendments.
Treasury Laws Amendment (2018 Superannuation Measures No.
1) Bill 2019
Senate Introduced and read a first time 12/09/2019
Amends the: Superannuation Guarantee (Administration) Act
1992 to enable certain employees with multiple employers to
apply for an employer shortfall exemption certificate which
prevents their employer from having a superannuation guarantee
shortfall if they do not make contributions for a period;
Administrative Decisions (Judicial Review) Act 1977 to
make consequential amendments; Income Tax Assessment Act
1997 to ensure that a superannuation entity's
non-arm's length income includes income where expenditure in
gaining or producing it was not an arm's length expense; and
Income Tax Assessment Act 1997, Taxation
Administration Act 1953 and Income Tax (Transitional
Provisions) Act 1997 to ensure that, in certain circumstances
involving limited recourse borrowing arrangements, the total value
of a superannuation fund's assets is taken into account in
working out individual members' total superannuation
balances.
Regulation
ASIC
Corporations (Repeal) Instrument
2019/874
18/09/2019 - This instrument repeals the ASIC [CO 09/437]
(Departed former temporary residents superannuation –
Disclosure relief) and ASIC [CO 09/210] (Intra-fund superannuation
advice) which have become redundant and are/ or no longer
necessary.
ASIC
Corporations (Unclaimed Superannuation—Former Temporary
Residents) Instrument 2019/873
18/09/2019 - This instrument continues the relief given by
[CO 09/437] with a minor policy change.
ASIC
Corporations (Changing Scheme Constitutions) Instrument
2019/700
12/09/2019 - This instrument continues the relief under
ASIC Class Order [CO 09/552], which deals with changing the
constitution of a registered scheme, with minor changes only.
ASIC
Corporations (Product Intervention Order—Short Term Credit)
Instrument 2019/917
12/09/2019 - This instrument prohibits the provision of
short term credit except in accordance with conditions which limit
the total fees that can be charged.
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.